Gulf markets plunge on disclosure worries |
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JEDDAH - Most Gulf markets plunged to record lows as declining second-quarter profits dragged down regional property firms, banks slipped on disclosure worries and oil extended losses intraday.
Dubai's index was the biggest loser, dropping 3 percent to 1,630 points - its lowest finish since May 17, while the Abu Dhabi index fell 0.7 percent to 2,561 points.
Oman and Qatar also fell to 10-week lows.
In Kuwait, the index fell 1.7 percent to 7,369 points, its lowest close since April 15.
Saudi Arabia also dipped, with the Tadawul All-Share Index slipping 0.15 percent, but was the only regional index not to retreat to May levels or lower.
Islamic (Takaful) insurance operators in particular gained value: Al Ahli Takaful posted the largest gain, advancing by 9.89 percent at SR18.00. SABB Takaful which is part of the banking group HSBC, gained 3.85 percent, closing at SR3.50.
Alinma Bank and Saudi American (Samba) Financial Group remained unchanged as most of the banks did ahead of the earnings season for the second quarter 2009.
Financial stocks dragged Kuwait's index to a three-month low.
"Stocks could see a short-term rebound on a technical basis, but the market will continue its poor performance until we get some concrete news about bottom line growth to restore investor confidence," said Chamel Sahmy, Beltone Financial regional senior sales trader. "There are question marks over real estate companies' second-quarter performance and we're not seeing any positive news coming into the market," he added.
Bank shares are also in retreat as investors worry about potential write downs from troubled conglomerates Saad Group and Ahmad Hamad Al-Gosaibi & Bros, which are restructuring billions of dollars of debt.
"The banking sector will remain under pressure in the short- to medium-term," said Shakeel Sarwar, Sico investment bank head of asset management.
"This is mainly on concerns about exposure to Saad and Algosaibi, plus there are different rumors saying there will be other major family companies facing financial problems and therefore defaults are expected to rise," he added.
© The Saudi Gazette 2009
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