Oct 07 2011
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Arab bourses falter on euro zone debt ordeal
They pointed out that regional equities were further squeezed by reports indicating the possibility of the world economy sliding into a new downturn.
"The failure of European decision makers to come up with convincing solutions to the debt problems in Greece and other euro zone countries is putting growing pressure on Middle East markets," Wajdi Makhamreh, CEO of the Amman-based Noor Investments, told Arab News.
Makhamreh also contended that the global recession fears could find expression in lower oil prices, which mean shrinking income accruing to the Arab countries in the Gulf region. He said that investors were also keeping an eye on the third quarter earnings which started to come out in the first week of October.
The Tadawul All-Share Index (TASI) shed 1.8 percent on weekly basis, closing at 6,001.90 points.
Saudi analyst Mohammad Anqari believed that the Saudi stock exchange would continue to move sideways in the coming weeks until the Muslim pilgrimage season which is due to start in the first week of November.
"I believe the Saudi market will remain in this area, which is widely believed to be risk-free, until the pilgrimage season when we expect the bourse to take another turn," he said.
"Investors will also be watching the yearly earnings of listed firms, particularly the petrochemical conglomerate, the Saudi Basic Industries Corp. (SABIC)," he said.
Anqari expected SABIC and the Saudi petrochemical sector as a whole to be directly affected by developments on the global economic scene, because any fresh recession would mean weak demand and lower prices for petrochemical products.
Other Saudi analysts believed Saudi shares would remain captive of European and US developments even if listed firms reported good results in the third quarter.
Kuwait's KSE all-share index edged lower, closing week at 5,826 points, compared with last week's close at 5,833 points.
United Arab Emirates equities also extended losses last week under selling pressures from foreign investors. The benchmarks of the Dubai and Abu Dhabi stock exchanges lost 2.6 percent and 1.5 percent, closing week respectively at 1.395 points and 2,494 points.
Qatar's all-share price index dropped 1.8 percent on weekly basis, closing at 8,242 points, while Bahrain's benchmark closed week unchanged at 1,166 points.
Jordanian shares continued to suffer for the fourth week in a row under fallout from placing under custody of assets belonging to executives of some listed firms who were suspected of fraud practices, Makhamreh said.
The all-share index of the Amman Stock Exchange (ASE), shed 1.6 percent last week, closing at a seven-year low of 1,961 points.
Egypt's AGX 30 index, measuring the performance of the market's 30 most active stocks, plummeted 4.5 percent on weekly basis, closing at 3,952 points, mainly due to persist political wrangling, analysts said.
© Arab News 2011
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