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US Recession Concerns Prompt Heavy Selling on GCC Markets

Panic selling hit the region today as global markets continued to bleed on recession fears. Most of the regional bourses saw heavy selling pressure with many shares offered at their limit down prices. However according to analysts, the region will continue to see robust growth driven by higher oil prices and concerns about growth slowing down in the region amid rising probability of a US recession is unwarranted. The Saudi market posted its biggest drop on record falling 9.7% as Saudi stocks retreated in response to a global equity rout and concerns over future earnings. SABIC led the sell-off, dropping 9.9%, its sharpest drop since July 2006. The stock has fallen about 25% since its closing price on Jan. 19, when it missed 4Q earnings forecasts and said the US mortgage crisis had hurt demand for chemicals. Dubai's recorded its biggest one-day loss in more than 22 months closing down 6.2% at 5,210.6 points led by Emaar and DFM Co. Abu Dhabi index dropped 6.8%, its sharpest decline on record, to 4,302.6 points led by Etisalat and banking stocks. Kuwait bourse dropped 1.6% undermined by blue chip stocks like Zain and banks. Qatar market tumbled 7.8%, making its sharpest one-day decline on record and hitting a three-week low. Industrial and banking firms paced the losses in the market. Oman index fell 8.3% pulled down by sharp losses registered by heavyweights. The index posted its biggest decline on record, and hit a three-week low. Bahrain bourse closed down 1% dragged by banking shares.

- Zain denied it had reached an advanced stage in talks to acquire a 51% stake in SyriaTel Mobile Telecom . (Zawya)
- Qatar Navigation said it won QR 147 mn ($40.4 mn) deal from state owned Qatar Petroleum . (Zawya)
- UAE's Dana Gas said it now officially owns 10% of an oil and gas field in Africa's Gulf of Guinea. (Reuters)
- Qatar's United Dev Co . said its board has approved raising foreign ownership in the company to 49% from the current 25%. (Zawya)
- Kuwait's Global Inv House has applied to the authorities for approval to increase its capital by 35% to KD 116 mn ($424.43 mn). (Zawya)
- Investment group Dubai World sees unique opportunities in Africa and is eyeing a fresh deal for a port and a business park in Tanzania after signing a $800 mn contract in Senegal.(Reuters)
- Abu Dhabi Islamic insurer Mithaq Lil-Takaful plans to raise AED 82.5 mn ($22.46 mn) by selling a 55% stake in an IPO starting Saturday. (Reuters)

Banking stocks drove Bahrain index to a lower close by 1% today. Banader Hotels led the decliners chart falling 5.7% followed by Al Salam Bank, NBB, Bahrain Hotels Co and AUB. Ithmaar Bank bucked the negative trend in the market being the sole gainer by 3.4% as it continues to attract investor attention after its takeover of Shamel. Ithmaar led the activity with 3 mn shares followed by Al Salam with1.9 mn shares.

Kuwait bourse tumbled 1.6% today paced by blue chip stocks. Zain which denied it had reached an advanced stage in talks to acquire a 51%-stake in SyriaTel Mobile Telecom ended limit down 2.5% closing at KD 3.98. Banks like NBK, KFH, Gulf Bank and CBK all traded in the red with major losses of 2.7%, 1.3%, 2% and 3.6% respectively. Agility and NIG also closed down 2.7% and 4.2% respectively. Al Safwa Group led the activity in the bourse with volumes of 23.6 mn shares and gained 1.2%.

A dramatic fall was seen in Oman market today with all shares ending either in the red or flat. The index posted its biggest one day decline on record falling 8.3% at 8,916.9 points. Blue chips like Bank Muscat, Omantel and NBO registered major losses leading the losses in the bourse by 9.6%, 7.6% and 6.9% respectively. United Finance Co which dropped 7.7% was the most active scrip with volumes of 4.3 mn shares changing hands.

Qatar market faced a steep drop today as major losses in blue chips like Industries Qatar, CBQ and QTel dragged the index to a lower close by 7.8%. Qatar Ins Co topped the losers chart by 9.8% followed by CBQ which said its 4Q profits rose by 70%, down 9.8%. Medicare Group and Qatar Flour Mills managed to end in the green being the only two gainers in the market by 3.4% and 1.6% respectively. Al Rayyan Bank was the most active scrip with 8.8 mn shares but lost 8.3%.

Saudi blue chips registered major losses of more than 9% today pulling down the index by 9.7%, its biggest drop on record. Petrochemical and telecom shares led losses in the market. SABIC lost 9.9%, extending a 17% decline since it missed fourthquarter profit forecasts. The activity was relatively lower led by Saudi Kayan which plunged 9.9% with a volume of 47.7 mn shares.

Emaar and DFM Co led losses in Dubai bourse today, which lost 6.2% today to close at 5,210.6 points on heavy selling pressure. Agility led the losers chart falling15% followed by Al Mazaya Holding, Aramex and Dubai Inv Co. Air Arabia which closed lower by 8.7% led the activity with 231.7 mn shares followed by Deyaar, DFM and Emaar.

Heavy selling pressure also hit Abu Dhabi shares dragging the index down 6.8%. Etisalat fell 7.3%, banks like NBAD and ADCB closed lower by 8.8% and 4.1% respectively. Energy and property shares dominated the activity with Dana Gas being the most active scrip with 62 mn shares.

© SICO 2008