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Bourses clawback $5bn of Jan losses

By Staff Writer

Gulf equity investors have recovered more than $5 billion (Dh18.35bn) of their massive losses in January after many regional bourses rebounded in the first 12 days of February, official figures showed yesterday.

After diving by around $54bn during January, the bourses of the Gulf Co-operation Council (GCC) gained $5.1bn in the first 12 days of February but experts believe it is a temporary recovery.

From around $601.75bn at the end of December, the market capitalisation of the GCC's seven stock exchanges dived to $547.4bn at the end of January but rebounded to nearly $552.2 billion on February 12, showed the figures by the Joint Arab Stock Data Base at the Abu Dhabi-based Arab Monetary Fund.

"It is a modest gain compared with the big losses suffered by regional stock markets over the past few months," said Jamal Ajjaj of Al-Sharhan Securities.

"This increase does not necessarily indicate a steady recovery.

"The markets have been seesawing for months and they could remain unstable this year."

A breakdown showed the bourses of Abu Dhabi, Dubai, Qatar, and Saudi Arabia were gainers in February while Kuwait, Bahrain and Oman were losers. Abu Dhabi swelled by around $1.5bn while there was a slight increase of nearly $100 million in Dubai. Saudi Arabia's Tadawul, by the far the largest and busiest exchange in the Middle East, recorded the largest gain of around $5bn but it was offset by a loss of nearly $3bn in Kuwait.

Despite the increase, the combined market capitalisation of the GCC bourses remained at its lowest level in nearly four years.

The bulk of their loss was in the second half of 2008, when they plummeted by over $500bn mainly due to widespread speculation, mass foreign selling and fear of the global crisis.