They expected Arab bourses, particularly in the Gulf region, to extend losses in the coming few weeks unless European policy makers succeeded in coming up with convincing solutions.
”I believe investors in Middle East equity markets are becoming frustrated over the failure of the Europeans to forge solutions for the exacerbating euro zone debt crisis,” Wajdi Makhamreh, CEO of the Amman-based Noor Investments, told Arab News.
”The escalating Arab Spring developments, the standoff over the Iranian nuclear program and the nearing withdrawal of the US troops from Iraq are also important factors which should be reckoned,” he said.
Makhamreh pointed out that Arab markets, which maintain close affiliations with the European economy, are ”downbeat over the temporary solutions being proposed for the euro zone debt problem, mainly for calming down global markets, and do think that what is needed are effective long-term solutions.”
He expected the financial standing of the Arab oil-exporting countries would be negatively affected as a result of falling oil prices due to sluggish demand for crude.
Saudi shares lost ground last week, led by the banking and petrochemical sectors. The Tadawul All-Share Index (TASI) fell 2.2 percent on weekly basis, closing at 6,086.10 points.
Saudi analyst Mohammad Anqari attributed the decline mainly to the failure to work out solutions for the euro sovereign debt debacle, the global recovery fears and the weak figures recently published about Chinese exports.
He said that the banking and petrochemical sectors, which account for 60 percent of the trading volume at the Saudi stock exchange, were coming under pressure from the European crisis and global recession concerns.
Anqari said that Saudi Arabia and other Arab oil-producing countries stood to lose financially as a result of falling crude prices, but he ruled out any reduction in the Saudi public spending, thanks to the huge surplus petrodollars which the Kingdom accumulated over the past years.
According to a blueprint declared earlier this year, the Saudi government pledged to spend $134 billion in the coming five years.
Kuwait’s KSE all-share index shed 1.3 percent last week, closing at 5,782 points.
Local reports that the profits of listed Kuwaiti firms retreated by 5 percent this year, and the political turmoil in the country helped to push down prices, analysts said.
The benchmarks of the United Arab Emirates stock exchanges of Dubai and Abu Dhabi closed 2.2 percent and 2.3 percent in the red, respectively at 1,349 points and 2,418 points.
Qatar’s index lost 2.1 per cent on weekly basis, closing at 8,565 points, while Bahrain’s benchmark closed week 0.6 percent in the red, at 1,161 points.
Jordanian shares lost ground last week mainly due to a liquidity shortage and lack of confidence, Makhamreh said.
The all-share price index of the Amman Stock Exchange (ASE) shed 1.4 per cent this week, to close at 1,990 points.
Egyptian shares were the main losers in the Middle East last week due to week-long rallies calling for an end to the army’s rule.
Egypt’s AGX 30 index, which measures the performance of the market’s 30 most active stocks, tumbled 4.5 percent on weekly basis, closing at 3,990 points.
