Gulf Markets Hit With Widespread Selling
biz.yahoo.com
Wednesday March 15, 5:56 pm ET
Gulf Markets Fall After Rising Oil Prices, Economic Growth Push Shares Into Overvalued Territory
DUBAI, United Arab Emirates (AP) -- The relatively new stock markets in the Gulf have been getting a lesson in the old stock market saw that no market rises forever.
Bourses in Dubai, Saudi Arabia, Qatar, Oman and Bahrain have dropped recently, after soaring oil prices and strong economic growth over the past few years pushed shares into overvalued territory, analysts said.
The Dubai Financial Market has taken one of the worst drubbings, dropping nearly 2 percent on Wednesday after losing 11 percent on Tuesday, the worst one-day loss in the market's history. Stock market losses in the Gulf have been so sharp that Kuwaiti investors angered by the slump held a rare, but peaceful protest Tuesday urging the government to intervene.
"After a stellar performance for the past few years in which most of these markets have shown an increase of more than a 1,000 percent, it was inevitable for a correction to take place," said economist Beshr Bakheet of the Saudi-based Bakheet Financial Advisers.
Early Wednesday trade in the DFM had seen a short-lived bounce of up to 5 percent, a result of snap-up bargains following Tuesday's drop, which was partly triggered by the plunge in oil-rich Saudi Arabia's stock market.
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In neighboring Saudi Arabia, the region's largest market, the benchmark Tadawul index on Tuesday dropped another 5 percent, the maximum allowed by regulators, bringing the market down by a quarter over the past three weeks. |
