Sunday, Nov 12, 2006


 
.Saudi SE           8019.07     -4.84% 
.Dubai FM           378.65      -0.10% 
.Abu Dhabi SM       3135.99     -0.09% 
.Kuwait SE          10321.2     -0.72% 
.Doha SM            6875.73     -1.39% 
.Muscat SM          5611.51     -0.05% 
.Bahrain SE         2181.12     -0.05% 
.Cairo SE           57003.29    +0.23% 
.Amman              5920.02     -0.38% 
 
.IPE Brent $/bbl    59.80        -2.24% 
.Gold $/troy oz     628.00       -0.84% 
.Euro-USD           1.2842       +0.08%

By Sarmad Khan

Of DOW JONES NEWSWIRES

DUBAI (Zawya Dow Jones)--Saturday's 4.8% plunge in Saudi shares will weigh heavily on Gulf financial markets, which are expected to further fall Sunday, an analyst say.

Majdi Mansour, head of Rasmala Brokerage, said investors need some breathing space, especially when the banks have started making margin calls and the market shows no signs of recovery.

"The government probably should interfere now asking banks to give investors at least three months to recover losses and pay their debts," he said, adding the new IPOs, should be scrapped for the rest of the year.

He said investors in both Saudi and Dubai markets are very wary of recent losses and will be happy if the index in Dubai stays at around the 380 level and doesn't plunge further.

"At 380, the market has some support and if this level is sustained for the remainder of the year, there is a chance of slow recovery after wards," he said.

Both the Saudi and Kuwaiti stock markets continued their recent negative performance Saturday, as investors shied away from trading.

At one point during the session, the Saudi All Share Index fell through the psychologically-important 8000-points barrier for the first time in 22 months, before inching back up to close down 4.8% at 8019 points.

"We can't see any specific reason for such decreases. The speculative-grade shares have seen the sharpest drops. Some of the leading shares have reached very attractive levels of dividend yield - Saudi Telecom Co. at 6.8%, Saudi Electricity at 4.9%, Southern Cement 5.8%," said Ibrahim Al Alwan, head of investment research in Bakheet Investment Group.

Mansour said if the Saudi bourse continues its downward trend, he wouldn't be surprised to see it trades close to 7000 points soon.

Saudi Capital Market Authority Chairman Abdulrahman Al-Tuwaijri in an interview with Al Arabiya TV Saturday said that the recent selloff in the local stock market has brought prices to levels that aren't justified, as the Saudi economy remains strong and growth expectations are optimistic.

The Kuwaiti market, meanwhile, ended 0.7% lower at 10,321.2 points, pushed down by strong selling of key stocks in the second half of the session.

Public Warehousing Co. (PWC Logistics) fell 2.9% to KWD2.040, after recording strong gains the previous week, while logistics rival Kuwait & Gulf Link Transport Co. fell 4.4% to KWD1.300.

In the news around the Gulf, Dubai Ports World said Saturday it is still going ahead with plans to invest GBP1.5 billion ($2.86 billion) in The London Gateway project, the company's Chairman Sultan Ahmed Bin Sulayem said.

Dubai International Capital aims to double its investments to US$10 billion from US$5 billion over the next two years, the government investment fund said.

-By Sarmad Khan; sarmad.khan@dowjones.com

Copyright (c) 2006 Dow Jones & Company, Inc.

(END) Dow Jones Newswires

11-12-06 0100ET