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Panicking Arab equity investors treaded into October poorer by nearly $84 billion (Dh176.64bn) as they continued to count amassing losses from an unprecedented haemorrhage in most regional markets shaken by the global financial crisis.
Defying expectations by dealers that an enormous bailout plan by the US to rescue its tottering financial system would stop that hemorrhage, the bulk of Arab stock markets continued to bleed and Gulf bourses remained the main victim.
Official figures showed the combined loss of the Arab world's 15 official stock exchanges totalled around $84bn during the first week of October and the seven bourses of the GCC accounted for nearly 90 per cent of the decline as they were savaged by nearly $74bn.
"There is panic in the region's markets," said Ahmed bin Abdul Nabi Makki, Oman's Minister of National Economy. "But it is caused by speculation about what could happen not about what is actually there."
In the UAE, an official from the Abu Dhabi Securities Exchange (ADX) called for government intervention to stop the decline in the Gulf markets.
"ADX cannot interfere because our role is confined to enforcing laws and ensuring transparency in dealings," said Rashid Al Balouchi, ADX deputy CEO.
"Government intervention could have positive effects…I think this measure will be beneficial in the short term as a reaction to abnormal situations in the market," Balouchi told the semi-official Arab language daily Al Ittihad yesterday.
In Morocco, the global financial crisis dominated the talks of Arab Central Bank governors, who began a two-day meeting on Tuesday.
Central Bank of Oman's Executive President Hamoud bin Sengour Al Zedjali, the current Chairman of the Arab Central Bank Governors' Council, said Arab states still do not know the real proportions of the US financial crisis.
"But the first lesson that we should derive from this crisis is that financial stability cannot be achieved without an efficient system of control and supervision … the second lesson is that ignoring basic principles in dealing with risks could have serious repercussions that must not be ignored," he told the meeting.
Figures by the Abu Dhabi-based Arab Monetary Fund (AMF) showed Saudi Arabia's Tadawul, the region's largest and most speculative bourse, was the main loser in the first week of October, plunging by nearly $30bn.
Kuwait, the second largest single exchange, dived by around $13bn while the losses stood at nearly $11bn in Dubai, $10bn in Abu Dhabi, $7bn in Qatar, $1bn in Bahrain and $1.7bn in Oman.
Outside the Gulf, Egypt's bourse reversed a sharp decline over the past weeks and recovered around $1bn while the markets of Jordan and Lebanon dipped by nearly $5bn and $1bn respectively. The AMF's Arab Stocks Data Base gave no market capitalisation figures for Morocco, the second largest Arab stock market after Egypt outside the six-nation GCC.
The figures showed the AMF indices for Arab markets, except Morocco, plunged in the first week of October, with the largest declines recorded in the bourses of Abu Dhabi and Dubai.
They dived by 10.94 and 10.24 per cent respectively while there was a fall by 9.32 per cent in Saudi Arabia, 7.76 per cent in Oman, 7.75 per cent in Kuwait, 3.27 per cent in Qatar and 0.18 per cent in Bahrain.
The composite AMF index, which measures the region's 15 stock exchanges, fell by 7.19 per cent in the first week of October and by around 29 per cent since the beginning of 2008
By
Nadim Kawach on Thursday, October 09, 2008
http://www.business24-7.ae
Defying expectations by dealers that an enormous bailout plan by the US to rescue its tottering financial system would stop that hemorrhage, the bulk of Arab stock markets continued to bleed and Gulf bourses remained the main victim.
Official figures showed the combined loss of the Arab world's 15 official stock exchanges totalled around $84bn during the first week of October and the seven bourses of the GCC accounted for nearly 90 per cent of the decline as they were savaged by nearly $74bn.
"There is panic in the region's markets," said Ahmed bin Abdul Nabi Makki, Oman's Minister of National Economy. "But it is caused by speculation about what could happen not about what is actually there."
In the UAE, an official from the Abu Dhabi Securities Exchange (ADX) called for government intervention to stop the decline in the Gulf markets.
"ADX cannot interfere because our role is confined to enforcing laws and ensuring transparency in dealings," said Rashid Al Balouchi, ADX deputy CEO.
"Government intervention could have positive effects…I think this measure will be beneficial in the short term as a reaction to abnormal situations in the market," Balouchi told the semi-official Arab language daily Al Ittihad yesterday.
In Morocco, the global financial crisis dominated the talks of Arab Central Bank governors, who began a two-day meeting on Tuesday.
Central Bank of Oman's Executive President Hamoud bin Sengour Al Zedjali, the current Chairman of the Arab Central Bank Governors' Council, said Arab states still do not know the real proportions of the US financial crisis.
"But the first lesson that we should derive from this crisis is that financial stability cannot be achieved without an efficient system of control and supervision … the second lesson is that ignoring basic principles in dealing with risks could have serious repercussions that must not be ignored," he told the meeting.
Figures by the Abu Dhabi-based Arab Monetary Fund (AMF) showed Saudi Arabia's Tadawul, the region's largest and most speculative bourse, was the main loser in the first week of October, plunging by nearly $30bn.
Kuwait, the second largest single exchange, dived by around $13bn while the losses stood at nearly $11bn in Dubai, $10bn in Abu Dhabi, $7bn in Qatar, $1bn in Bahrain and $1.7bn in Oman.
Outside the Gulf, Egypt's bourse reversed a sharp decline over the past weeks and recovered around $1bn while the markets of Jordan and Lebanon dipped by nearly $5bn and $1bn respectively. The AMF's Arab Stocks Data Base gave no market capitalisation figures for Morocco, the second largest Arab stock market after Egypt outside the six-nation GCC.
The figures showed the AMF indices for Arab markets, except Morocco, plunged in the first week of October, with the largest declines recorded in the bourses of Abu Dhabi and Dubai.
They dived by 10.94 and 10.24 per cent respectively while there was a fall by 9.32 per cent in Saudi Arabia, 7.76 per cent in Oman, 7.75 per cent in Kuwait, 3.27 per cent in Qatar and 0.18 per cent in Bahrain.
The composite AMF index, which measures the region's 15 stock exchanges, fell by 7.19 per cent in the first week of October and by around 29 per cent since the beginning of 2008
By
Nadim Kawach on Thursday, October 09, 2008
http://www.business24-7.ae
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