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'Bloody Sunday' sees Gulf markets crumble
 Stock markets across the Gulf continued to tumble Monday after a 'Bloody Sunday' of trading saw huge losses and credit conditions tightened, sparking fears that the Arab peninsula would be hit by the fallout in Europe and the United States. In the Gulf's biggest stock market, Saudi Arabia, the leading TASI index plunged over 9 percent, while shares in big energy exporter Qatar fell 4.2 percent. In neighboring United Arab Emirates, Dubai's Financial Market crumbled almost 7percent, its lowest drop since March 14, 2006; while Abu Dhabi's index fell 5 percent. Analysts said despite the $700 billion U.S. economic rescue package, passed earlier this week, there is an air of uncertainty as fears mounted that it may not be enough. "Uncertainty prevails despite the U.S. government passing the package and there is this lingering fear that the $700 billion may not be enough," the UAE's Gulf News quoted head of Al Dhafra Brokerage, Vyas Jayabhanu, as saying. "Foreign institutions are heavily selling in the market. Some of them are exiting completely," says Amro Motasim, chief trader at Ahli Bank. As markets slumped, credit tensions intensified and interbank lending rates in key Gulf states climbed, hitting levels not seen since late 2007 or early 2008. UAE one-month rates rose to 4.51875 percent while Saudi Arabia one-month rates hit 4.11750 percent. In September, the UAE central bank said it would offer banks short-term funds through a 50 billion UAE dirham ($13.61 billion) facility in an emergency move to ease tensions in the money markets. Posted by: Fred 2008-10-07 |
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