| 04 Oct 2008 |
|
Saudi investors suffer losses due to US crisis
- Text size
JEDDAH: Many Saudi and Gulf investors suffered heavy losses after some American and Gulf banks used their funds to buy risky mortgage bonds just before the subprime mortgage crisis erupted in the US.
"At least 35 Saudi investors are facing semi-bankruptcy as a result of purchasing US mortgage bonds," Al-Riyadh Arabic daily said quoting business sources.
However, the paper said it was not yet clear how much would be the total losses caused by the US economic crisis to Gulf banks. It also said that some Gulf banks had played the role of intermediaries for US banks and companies to sell high-risk mortgage bonds to Gulf investors in lieu of attractive commissions.
Saudi Arabian Monetary Agency (SAMA)Saudi Arabian Monetary Agency (SAMA)
, the Kingdom's central bank, is silent about the losses suffered by commercial banks in the country, the paper said.
Fadl Saad Al-Bouainain, a Saudi economist, said many Gulf banks and investment companies had reached deals to purchase risky US bonds at the expense of their Saudi and other Gulf clients to realize their vested interests. He emphasized the important role being played by SAMASAMA
to protect local banks without being affected by regional and international crises.Abdul Aziz Al-Owaishek, an economist, wondered why the US crisis had greater effect on Saudi and other Gulf capital markets than American markets, especially their economies have made substantial growth.
"The Saudi stock marketSaudi stock market
lost 30 percent of its value in 2008 while Dow Jones lost only 22 percent," he pointed out.Ihsan Buhulaiga, a member of the Shoura Council, said the Saudi stock marketSaudi stock market has already been hit by the global crisis, adding that the Saudi banks are currently suffering from a lack of liquidity. "Gulf economies are liable to foreign influence," Buhulaiga said, adding that government investments abroad and banks were the worst affected. We'll know the extend of losses with the passage of time."
He expected a fall in oil demand as a result of global economic recession.
No Gulf countries have announced their link with US mortgage crisis, said Saud Al-Jelaidan, another economist.
measures to tackle inflation," he said.Meanwhile, economists predicted that the Saudi stock marketSaudi stock market index would decline further as a result of the effect of global economic crisis. They said the Eid Al-Fitr holidays had saved stock dealers from major losses.
By P. K. Abdul Ghafour
© Arab News 2008
Zawya is a distributor (and not a publisher) of content supplied by third parties and subscribers. Any opinions, advice, statements, services, offers, or other information or content expressed or made available by those third parties, including information providers, subscribers or other users of the Service, are those of the respective author(s) or distributor(s) and not of the Company. The Company neither endorses nor is responsible for the accuracy or reliability of any opinion, advice or statement made on the Service by anyone other than authorized Service employee spokespersons while acting in their official capacities. The Company is not responsible for any infringement of intellectual property rights or breach of any applicable law or regulation, including regulation in relation to financial services or the distribution of financial products, defamation, data protection, telecommunications (including regulations relating to excessive use, spamming or other abusive activities) or obscene, offensive or illegal content). Under no circumstances will the Company be liable for any loss or damage caused by a member's reliance on information obtained through the Service. It is the responsibility of member to evaluate the accuracy, completeness or usefulness of any information, opinion, advice or other content available through the Service. Please seek the advice of professionals, as appropriate, regarding the evaluation of any specific information, opinion, advice or other content.
Read the full Member Agreement
http://www.zawya.com/legal/NewsLetter.cfm?name=disclaimer
Loading ...
Post a Comment
1.1 Contain any material which is libelous or defamatory of any person, is obscene, offensive, hateful or inflammatory or causes damage to the reputation of any person or organisation.
1.2 Promote sexually explicit material, violence, discrimination based on race, sex, religion, nationality, disability, sexual orientation or age or any illegal activity.
1.3 Be made in breach of any legal duty owed to a third party, such as a contractual duty or a duty of confidence.
1.4 Be threatening, abuse or invade another's privacy, or cause annoyance, inconvenience or needless anxiety.
1.5 Be used to impersonate any person, to misrepresent your identity or affiliation with any person, or be likely to deceive any person.
1.6 Give the impression that they represent Zawya.
1.7 Advocate, promote or assist any unlawful act such as (by way of example only) copyright infringement or computer misuse.