Saudi shares tumble to a four-year low

Fourteen of the market's 15 sectors fell, with an 8.5 percent drop in the key petrochemicals sector. Constructions fell by 9.3 percent and retails by 8.9 percent.

In trading, 118 listed firms dipped with only seven firms rising.

The Saudi market is the only Gulf financial market that opens on Saturday.

The new decline came despite statements by the Saudi Arabian Monetary Agency (SAMA) on Thursday that it was ready to inject more than 93 billion dollars into the kindgom's banking system. The banks index dropped by 4.8 percent.

It also came despite a number of companies announcing impressive results.

Saudi Fertilizers Co. announced a 155 percent rise in nine-month profits and Saudi British Bank posted a 19 percent rise.

TASI suffered turbulence in the trading week ending on Thursday, cut to three day by a religious holiday, and dropped 17.4 percent.

The bourse in the world's top oil exporter is the largest in the Middle East, but with capitalisation having been slashed to around 300 billion dollars from about 450 billion dollars at the end of last year.

The TASI is currently down 47.5 percent from the 2007 close.

Stock markets in other energy-rich Gulf states sustained heavy losses last week. The declines were led by the market in Dubai, which nosedived by about 25 percent.

Gulf economists have attributed the slide in the Gulf markets to panic from the impact of global financial turmoil that has strongly shaken investor confidence and led to a wave of sell-offs.

They also said investors were worried over the fate of Gulf foreign investments, estimated at 2.5 trillion dollars.

"Our economies are solid and have been growing at high rates. Our banking system is insulated and largely not exposed to the global financial system," prominent Saudi economist Ehsan Bu-Hulaiga said.

"What we have been seeing is a reaction to the global crisis. Its surprising to see share price of good companies with excellent profits slide. Its panic and lack of confidence," he told AFP.

The massive drop in oil prices also appears to have weighed heavily on the markets in the region, which pumps about 16 million barrels per day. Crude prices closed in New York Friday below 80 dollars a barrel.

Oil income of the six Gulf states is estimated to have dropped by one billion dollars every day from its level in July when oil prices peaked above 147 dollars a barrel.

On Friday, the World Bank warned that a significant drop in oil prices would bring down the level of economic growth in oil-exporting countries.

US President George W. Bush said on Saturday, after crisis talks with G7 finance ministers, that all agreed the world financial meltdown required "a serious global response."

The finance chiefs of the Group of Seven major advanced economies had announced on Friday a broad five-point action plan to tackle a global crisis that has markets and the banking system reeling.

The G7 pledged to use "all available tools" to support key institutions and prevent their failure in the worst financial crisis since the 1930s Great Depression.

Short on specifics, the communique was released after a meeting of finance ministers and central bankers of the United States, Germany, Japan, France, Britain, Italy and Canada in Washington.