...

Lehman Brothers collapse plays havoc with Arab bourses

Business Materials 19 September 2008 17:37 (UTC +04:00)

Arab stock markets tumbled this week in response to the collapse of the US Lehman Brothers bank, and financial analysts said Friday they did not exclude further repercussions on regional markets.

"The direction of markets is unclear," Nizar Taher, chief of brokerage at the Jordan Ahli Bank told Deutsche Presse-Agentur dpa.

"Arab markets reacted violently to latest developments in the United States, an indication that there are investors who work in the two regions," he said.

"We believe that investors in the region will assume caution in the coming weeks, looking out for any new offshoots of the turmoil," he added.

Saudi shares plunged for the third week in a row with the negative sentiment already created by falling oil prices aggravated by the news that the Lehman Brothers was heading to bankruptcy.

The Tadawul All Share Index (TASI) of the Arab world's largest stock exchange plummeted 9.1 per cent this week, closing at 7,387.25 points.

TASI is currently 33.1 per cent lower than the year's start, according to the weekly report of the Riyadh-based Bakheet Investment Group (BIG).

The BIG expected the negative sentiment "to ease" in the coming weeks in the light of the corrective measures taken by the US administration, the fall of prices to buy levels and the approaching third quarter results of listed firms.

Jordanian shares also suffered heavily this week mainly due to the reference of at least eight firms dealing with foreign bourses to court on suspected fraud.

"We also think that foreign investors, particularly form the Gulf region, has been selling their holdings of Jordanians stocks to cover their positions elsewhere," Taher said.

The all-share price index of the Amman Stock Exchange shed 3.65 per cent this week, closing at 3,861 points, according to the ASE weekly report.

Kuwait's KSE all-share index fell 3.6 per cent this week, closing at 12,658 points.

The benchmark price of the United Arab Emirates stock exchanges of Dubak and Abu Dhabi, plunged 7.3 per cent this week, to close at 4,502 points.

Egypt's CASE 30 index, which measures the performance of the market's 30 most active firms, tumbled 14.5 per cent this week, closing at 7,066 points.

Latest

Latest