Gulf stocks end the first month of 2009 weaker


All seven bourses in the six GCC states finished the first month lower, led by Doha market which shed 23.7%, after it was the least affected last year.
More than $ 50bn were wiped off of their market capitalisation which now stands at $ 549bn compared to 600bn last year.

The Gulf stock markets continued to slide after a severe battering due to the impact of the global economic downturn that strongly hit financial results of leading companies especially in the fourth quarter of last year.

Leading Saudi firm Sabic petrochemicals reported a 95.5% drop in its fourth quarter profits and Kuwait Finance House, the emirate’s leading Islamic bank, lost $ 221mn in the fourth quarter alone.

Economic forecasts expect that most listed firms will experience similarly dismal results for the final quarter of 2008.

The seven bourses dropped sharply in the first three weeks of January but most of them made a slight comeback in the current week, mainly on news of potential government intervention, especially in Kuwait.

The Saudi market, the largest in the region, made the best performance despite Sabic’s disappointing results.

The Tadawul All-Shares Index (Tasi) dropped just 0.3% to close the month at 4,789.49 points, down from last year’s 4,802.99 points. It ended last year down 56.5%.

Tasi dropped close to a five-year low at the start of the year, but then made a modest comeback. The Kuwait Stock Exchange, the second largest in the Arab world, shed 13.1% to close the first month at 6,764.50 points. The market dropped 38% last year.

KSE made important gains in the current week after reports that the government was considering a multi-billion-dollar stimulus package to bail out troubled investment firms which defaulted on their loans.

In the United Arab Emirates, the Dubai Financial Market, which slid 72.4% in 2008, finished January down 7% to close at 1,520.24 points after earlier dropping to levels not seen in more than four years.

Its sister bourse, the Abu Dhabi Securities Exchange, was 5.6% lower at 2,255.85 points. It had shed 47.5% in 2008.

The two markets reeled under a severe correction in the leading real estate market which had experienced spectacular growth in the past few years.

The Doha Securities Market was last year the least affected in the Gulf, shedding just 28.1%, but ended January down a massive 23.7% at 5,253.03 points despite government purchase of stakes in banks.

The tiny Muscat Securities Market dipped 11.5% at 4,813.51 points, while Bahrain Stock Exchange lost 8.3% to close at 1,654.96 points.

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