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Last Updated: Oct 12, 2008 - 7:25:15 AM |
The Tadawul All-Shares Index (TASI) finished down 5.94 percent at
5,794.87 points, its lowest level since mid-2004.
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 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 is the largest in the Middle East, but with capitalisation
having been slashed to around $300 billion from about $450 billion 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.
"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 newswire 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
(bpd). Crude prices closed in New York Friday below $80 a barrel.
Oil income of the six Gulf states is estimated to have dropped by $1
billion every day from its level in July when oil prices peaked above
$147 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.
Black week for Gulf markets
Markets across region witness some of heaviest losses on record due to
fears over global financial crisis.
Source:Ocnus.net 2008
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