Arab bourses plummet on global financial crisis concerns

It was the second straight day of heavy losses for most of the regional markets, excluding the Saudi bourse which resumed trading on Monday.

The plunge reflected concerns among investors in the region that the financial crisis could drag on, particularly if the US 700- billion-dollar bail-out package could not realize its objectives, financial analysts said.

"Arab markets are coming more than any time before under the psychological impact of the global financial crisis," Wajdi Makhamreh, Chief Operating Officer at the Sanabel International Holding told Deutsche Presse-Agentur dpa.

"Investors apparently prefer to remain on the sidelines at this juncture as ambiguity continues to prevail regarding the extent to which Arab markets and financial institutions will be exposed to the fallouts of the financial crisis in the United States and Europe," he said.

The move of the recession concerns from the United States to Europe and the continuing fall of oil prices are putting fresh pressure on Arab markets, be added.

"Nobody can foretell the direction of markets in the region because of lack of vision and absence of studies," Makhamreh said.

The Arab world's largest bourse, the Saudi stock exchange, led the drastic decline with a 9.84-per-cent drop in the Tadawul All Share Index (TASI).

Investors in the Saudi stock market could be cautious as to the extent of Saudi investments in the United States and Europe and the degree of risks involved, Saudi financial analyst Rashed Fouzan said.

"The impact of the global financial crisis on the Saudi markets could be minimal, but lack of transparency in this respect has a negative effect," he added.

The all-share price index of the Kuwaiti stock market fell 3.45 on Monday as bankers said the Central Bank of Kuwait pumped money to the country's financial system to prop up confidence.

The all-share price index of the Amman Stock Exchange plummeted 4.28 per cent on Monday, bringing the total fall in two days of trading to 7.5 per cent.

The benchmarks of the United Arab Emirates stock exchanges of Dubai and Abu Dhabi shed 7.5 per cent and 5.2 per cent, respectively, on Monday.