Arab Stock Markets Volatile in Response to Global Fluctuations

“We believe that the psychological impact of developments on world markets will continue to be felt in the Middle East bourses for some time to come,” Wajdi Makhamreh, Chief Operating Officer at the Amman- based Sanabel International Holding told Deutsche Presse-Agentur dpa.

“Fears of retreating results of listed firms in the third and fourth quarters due to recession fears are also expected to have negative impact on investors,” he said.

Regional analysts also cited the rapidly falling oil prices and the consequent decline of surplus petrodollars due to accrue to oil- producing countries in the region as an additional factor that was due to leave its toll on regional markets.

Saudi shares, which suffered heavy losses last week, rebounded this week, apparently making benefit from assurances about the strength of the Saudi economy and the good performance of leading stocks, mainly the Saudi Basic Industries Corp. (SABIC) as well as the banking and telecommunication sectors.

The Tadawul All Share Index (TASI) of the Saudi stock exchange, the Arab world’s largest bourse, climbed 11.4 per cent this week, closing at 6,863.15 points.

TASI is currently 37.8 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 Saudi market to remain volatile in response to fluctuations on the world markets “until fresh news reinstates confidence of investors in the Saudi market.”

The Saudi Currency Authority said Thursday that it would guarantee the flow of liquidity to banks as well as the bank deposits.

It was the latest step by the world’s largest oil exporter to dissipate investors’ fears about the implications of a ushering world recession.

The BIG report indicated that oil prices would remain crucial to the performance of bourses in the oil-rich Gulf region. As a defensive step, Opec said on Thursday that it was shifting to an earlier date, to October 24 from November 18, the meeting designed to study the repercussions on member countries of sliding crude prices. Qatari Oil Minister Abdullah Al Attiyah told Al Jazeera television on Thursday that he expected the group to cut production “by one million barrels a day or more.”