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Stocks lose $54bn in January

Stock market investors have been urged to shun speculation and rumours (AFP)

By Nadim Kawach

The global financial crisis continued to drain the wealth of regional equity investors by slashing Gulf stock markets by a further $54 billion (Dh198.18bn) in January, official figures showed yesterday.

After suffering their biggest semi-annual loss of more than $500bn in the second half of 2008, the bourses of the six-nation Gulf Co-operation Council (GCC) plunged by around $54.35bn in January to remain at their lowest level in nearly four years, showed the figures by Abu Dhabi-based Arab Monetary Fund (AMF), which tracks share movement in the Arab world's 15 exchanges. From around $601.75bn at the end of 2008, the combined market capitalisation of the GCC's seven bourses slumped to $547.4bn at the end of January, showed the figures by the AMF's joint stocks data base.

Officials and experts have blamed the global financial crisis and ensuing fear by investors around the world for the worst performance of GCC markets in the second half of 2008 despite strong oil prices and high growth rates in the region.

Speaking to Emirates Business this week, a senior official at Abu Dhabi Securities Exchange (ADX) expected another difficult year in 2009 and urged investors to shun rumours and speculation. "Looking forward, to be honest with you 2009 will not be easy. The influence will continue this year," ADX Deputy CEO Rashed Al Baloushi said.

"My advice to them [investors] is that they should always view their investments as a long-term investment not as speculation.

"I urge them to avoid any rumours in the market. As for the prevailing fear of the crisis, well I can say that the global crisis is there. If I tell them to ignore that fact, I will be fooling them."

A breakdown showed Kuwait and Qatar were the main losers during January while Dubai's bourse was the one odd out as it slightly edged up.

From $126.6bn at the end of 2008, Kuwait's market capitalisation dipped by around $26bn to nearly $99bn at the end of January while Qatar's Doha Securities Market tumbled by around $17bn.

ADX lost nearly $4bn while nearby Dubai gained around $500m. Oman and Bahrain declined by nearly $1bn and $2bn respectively.

Saudi Arabia's Tadawul, the Middle East's largest and busiest stock market, lost only around $4bn but remained at its lowest level in nearly four years.

The report showed the combined market capitalisation of the seven bourses was at its lowest point since January 2005, when it stood at around $551bn.