[2008-09-25]  Saudi leads Gulf bourses down
Shares in Saudi Arabia, the Gulf’s largest market, led losers across the region as investors sold ahead of a long Eid holiday amid uncertainty in world markets. Investors are selling their shares before the Eid Al Fitr holidays, traders said, worried that global markets would see more turmoil while Middle Eastern markets are closed. “No one wants to risk taking positions before the Eid holidays and buy into the markets which will be closed while world bourses are open and seeing so much volatility,” said Nour al-Zoubi, general manager at MacSharaf Securities.

He added that investors are waiting to see whether US law makers approve a $700bn bailout package for distressed Wall Street firms. Dubai shares ended down 4% to 3890.16. Shuaa was a top loser, falling 11.4% to 3.95 dirhams. Shuaa is under investigation by the Dubai Financial Services Authority in relation to a purchase DP World shares.

Emaar was most active, falling 3.7% to 7.22 dirhams. Many investors are waiting to see whether US lawmakers approve a $700bn bailout package for distressed financial firms on Wall Street, traders said. In Abu Dhabi the market closed down 2.3% to 3811.08. Etisalat was most active, shedding 3.3% to 16 dirhams. Aldar fell 1.1% to 7.85 dirhams.

Saudi Arabia’s market, the Gulf’s largest, ended down 4.4% to 7133.47. PetroRabigh was most active, limit down 10% to 37.80 riyals. The Middle East Economic Digest reported on Tuesday that PetroRabigh’s joint venture with Japan’s Sumitomo has been delayed.

Saudi market was closed on Tuesday for a national holiday. Though third-quarter results are expected to be good, the market is likely to be subdued, traders said. “Investors are selling before the long Eid holiday as Saudi is correlated to world markets which are seeing a correction. There may even be a lag after Eid as investors wait to see how global markets will perform,” said Saleem Khokhar, vice president of asset management at EFG Hermes Saudi Arabia. Kuwait, the Gulf’s second largest market, ended down 0.7% to 12783.7. Heavyweights Kuwait Finance House slid 3.4% to 2.260 dinars while Zain shares shed 5% to 1.520 dinars.

“Third-quarter earnings are likely to be affected by many companies’ investments in the local stock market, which has done poorly. The quality of earnings are on most people’s minds,” said a trader at a Kuwaiti bank. The banking sector is likely to be hit hardest from stock market activities, he added. Bahrain’s market closed down 0.2% to 2491.98, undermined by investment shares. Muscat shares closed 1.8% lower to 8466.49, led by service and insurance stocks.



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