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11 June 2023

Gulf stock markets slide on weaker financial results


Stock markets in the Gulf states ended the first month of 2009 lower on weaker financial results following a sharp slide last year as the energy-rich region was battered by the global economic crisis.

All seven bourses in the six Gulf Co-operation Council (GCC) states finished the first month lower, led by Doha market, which shed 23.7 per cent, after it was the least affected last year.

More than $50 billion were wiped off of their market capitalisation, which now stands at $549bn compared to $600bn last year.

The Gulf stock markets continued to slide after a severe battering due to the impact of the global economic downturn that strongly hit financial results of leading companies especially in the fourth quarter of the last year.

In the UAE Dubai Financial Market, which slid 72.4 per cent in 2008, finished January down seven per cent to close at 1,520.24 points after earlier dropping to levels not seen in more than four years.

Its sister bourse, Abu Dhabi Securities Exchange, was 5.6 per cent lower at 2,255.85 points. It had shed 47.5 per cent in 2008.

Saudi leading firm Sabic petrochemicals reported a 95.5 per cent drop in its fourth quarter profits and Kuwait Finance House, the emirate's leading Islamic bank, lost $221 million in the fourth quarter alone.

Economic forecasts expect that most listed firms will experience dismal results for the final quarter of 2009. The seven bourses dropped sharply in the first three weeks of January but most of them made a slight comeback in the current week, mainly on news of potential government intervention, especially in Kuwait.

The Saudi market, the largest in the region, made the best performance despite SABIC's disappointing results. The Tadawul All-Shares Index (TASI) dropped just 0.3 per cent to close the month at 4,789.49 points, down from last year's 4,802.99 points. It ended last year down 56.5 per cent.

TASI dropped close to a five-year low at the start of the year, but then made a modest comeback.

Kuwait Stock Exchange, the second largest in the Arab world, shed 13.1 per cent to close the first month at 6,764.50 points. The market dropped 38 per cent last year.

KSE made important gains in the current week after reports that the government was considering a multi-billion dollar stimulus package to bail out troubled investment firms.