KUWAIT CITY: Gulf stock markets showed some signs of recovery yesterday after days of bleeding but trading was highly volatile reflecting low investor confidence and panic from the global financial crisis.
Most markets rose with Dubai leading the way, spurred by the real estate sector, which rebounded strongly following two months of deep losses.
The Dubai Financial Market made a strong comeback, closing 8.15 percent higher at 2,142.85 points, its first gain after six sessions of huge losses. The DFM Index is still down 64 percent on the year.
The index was supported by the market leader, property developer Emaar, which rose by 15 percent, the maximum allowed level. The stock however remains down 78 percent this year.
Contrary to previous sessions, all other sectors made gains.
Sister UAE bourse, the Abu Dhabi Securities Market, closed up 3.3 percent on the back of a big 8.1 percent increase in the real estate sector.
The sector has risen slightly in the past two sessions amid reports that Abu Dhabi government portfolios were buying stocks of real estate firms.
The Saudi market, the largest in the Arab world, closed slightly higher for the second day running after fluctuating sharply in early trades.
The Tadawul All-Share Index (TASI) finished up 0.53 percent at 5,173.12 points, supported by a rise in all the 15 sectors, with the leading petrochemicals and banking sectors each adding 0.4 percent. The TASI closed Sunday up 1.3 percent after shedding 7.4 percent the previous day.
“The market is rebounding after the massive declines we’ve witnessed,” said Abdullah Al-Aqeel, equity trader at Samba Financial Group.
Aqeel said the G-20 conference, which saw world leaders pledge rapid action to try to restore global growth, as well as expected positive company results in Saudi Arabia, were helping to convince bargain hunters to re-enter the market.
The Doha Securities Market closed up 0.10 percent below the 6,000-point mark, while the small Muscat Securities Market added 0.4 percent.
Kuwait and Bahrain bucked the trend.
Trading at the Kuwait Stock Exchange, the second biggest Arab bourse, resumed yesterday after the market was shut for two days by a court order which was overturned by another court on Sunday.
The KSE Index finished down 1.6 percent 8,552.70 points, a level last seen in mid-2005.
The market was dragged down by the banking sector which shed two percent and the investment sector which dropped 1.6 percent. Market leader, Zain Telecom dived 5.1 percent.
The Bahrain Stock Exchange fell 1.4 percent.
Economists say the Gulf Cooperation Council (GCC) states should pump liquidity into the markets to help restore confidence as the outlook for the economies of the oil-rich region is uncertain.
“As in the rest of the world, the outlook for the economies of the Gulf region is uncertain,” CEO of the National Bank of Kuwait, Ibrahim Dabdoub, told a symposium on Sunday.
“GCC governments should use their (financial) reserves to contain the fallout by pumping liquidity into their markets in support of other monetary measures taken,” he said.
