ID :
31532
Fri, 11/21/2008 - 22:31
Auther :
Shortlink :
https://oananews.org//node/31532
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STEEP FALL IN GCC MARKET CAPITALISATION, SAYS REPORT
DUBAI, Nov 21 (Bernama) -- Stock markets in the six-member Gulf Cooperation Council (GCC) have lost 47.5 percent since the start of 2008, wiping off US$538 billion from the market capitalisation while losing US$373 billion since the beginning of October, according to a report.
Saudi Arabia, the largest market in the region, lost US$254 billion of its
capitalisation since the start of the year, while the United Arab Emirates (UAE)
and Kuwait markets lost US$141 billion and US$101 billion of their
capitalisation respectively.
"The region's largest markets witnessed the bulk of the decline as slowing
world economic growth, falling crude oil prices and the prevailing financial
crisis have cast a bearish spell," said the Kuwait-based Global Investment House
(GIH) report.
In its analysis, GIH said although the subprime mortgage crisis came to the
fore in 2007, the real effect of the crisis was felt when Lehman Brothers filed
for bankruptcy in September 2008, followed by bailouts of other major financial
firms.
It said the uncertainty and intensifying of the credit crunch made
investors exit the equity markets, leading to large falls the world over.
The credit crunch, which was accompanied by fears of world economic
slowdown, a sharp decline in crude oil prices since reaching an all-time high
in July 2008 and panic selling by investors caught the GCC markets in the
cycle, losing US$373 billion since October this year, the report said.
The Saudi market stood at US$265 billion on Nov 16, 2008, compared to
US$519 billion at the start of the year, said GIH, adding that it lost US$122
billion (31.5 percent) of its capitalisation since October.
The Kuwait stock market, dominated by banks and investment companies, also
saw a massive decline, losing US$89 billion of its capitalisation since October.
In the UAE, the report said the Dubai and Abu Dhabi stock exchanges lost a
combined US$104 billion of their capitalisation since October.
The global financial crisis along with fears of a fall in tourism and
transit-related services in the wake of lower world economic growth and
apprehensions over the state of the property market in the UAE had taken its
toll on market capitalisations, it opined.
"Though a correction is taking place in the UAE real estate market, we
believe that the fundamentals remain strong. Real estate is an important part of
the UAE economy and the government is likely to support it in case of any major
downturn," said the report.
Qatar and Omani indices saw a decline of US$31 billion and US$7 billion of
their market capitalisation since the start of the year, while the Bahrain
market witnessed the least decline of US$3.6 billion.
Similar to other countries, the Qatar and Oman stock markets took a deep
plunge after October, wiping off US$45 billion and US$9 billion from their
capitalisation respectively, said the GIH report.
-- BERNAMA
Saudi Arabia, the largest market in the region, lost US$254 billion of its
capitalisation since the start of the year, while the United Arab Emirates (UAE)
and Kuwait markets lost US$141 billion and US$101 billion of their
capitalisation respectively.
"The region's largest markets witnessed the bulk of the decline as slowing
world economic growth, falling crude oil prices and the prevailing financial
crisis have cast a bearish spell," said the Kuwait-based Global Investment House
(GIH) report.
In its analysis, GIH said although the subprime mortgage crisis came to the
fore in 2007, the real effect of the crisis was felt when Lehman Brothers filed
for bankruptcy in September 2008, followed by bailouts of other major financial
firms.
It said the uncertainty and intensifying of the credit crunch made
investors exit the equity markets, leading to large falls the world over.
The credit crunch, which was accompanied by fears of world economic
slowdown, a sharp decline in crude oil prices since reaching an all-time high
in July 2008 and panic selling by investors caught the GCC markets in the
cycle, losing US$373 billion since October this year, the report said.
The Saudi market stood at US$265 billion on Nov 16, 2008, compared to
US$519 billion at the start of the year, said GIH, adding that it lost US$122
billion (31.5 percent) of its capitalisation since October.
The Kuwait stock market, dominated by banks and investment companies, also
saw a massive decline, losing US$89 billion of its capitalisation since October.
In the UAE, the report said the Dubai and Abu Dhabi stock exchanges lost a
combined US$104 billion of their capitalisation since October.
The global financial crisis along with fears of a fall in tourism and
transit-related services in the wake of lower world economic growth and
apprehensions over the state of the property market in the UAE had taken its
toll on market capitalisations, it opined.
"Though a correction is taking place in the UAE real estate market, we
believe that the fundamentals remain strong. Real estate is an important part of
the UAE economy and the government is likely to support it in case of any major
downturn," said the report.
Qatar and Omani indices saw a decline of US$31 billion and US$7 billion of
their market capitalisation since the start of the year, while the Bahrain
market witnessed the least decline of US$3.6 billion.
Similar to other countries, the Qatar and Oman stock markets took a deep
plunge after October, wiping off US$45 billion and US$9 billion from their
capitalisation respectively, said the GIH report.
-- BERNAMA
