KUWAIT CITY (AFP) — The Saudi Arabian stock market, the largest in the Arab world, rebounded strongly on Tuesday but shares in most other Gulf states sank for the third day running.
Dubai Financial Market was the only other Gulf bourse to rise, with the losers led by Qatar and Kuwait, where investors were reeling from financial problems faced by the emirate's second biggest lender.
"Sentiment is weak, reality is not, and that's why we need to look at the reality, not the sentiment," Omar bin Sulaiman, governor of the Dubai International Financial Centre, told reporters.
"We don't have an issue in the region. We need to look on the positive side. The world needs a positive picture, and we have it, so why look at the dark side."
Saudi Arabia's Tadawul All-Shares Index finished up 5.3 percent at 5,621.99 points overcoming initial volatile trading. Over the previous three days, the TASI has plunged more than 13 percent and is still down 49 percent on the year.
The bourse was supported on Tuesday by a rise in all sectors. The leading petrochemicals sector rose 6.7 percent as market leader SABIC gained 7.1 percent.
Of 125 stocks traded, 121 increased and three dropped while one remained unchanged.
The rebound came after assurances from Saudi Arabian Monetary Agency chief Hamad al-Sayari that banks in the world's leading oil exporter were not facing a liquidity crunch.
Sayari blamed the recent drop on "physchological factors in light of fears of a global recession."
But the Kuwait Stock Exchange, the second largest in the Arab world, continued to reel from financial problems faced by the emirate's second biggest lender as investors protested for the fourth day running.
Frustrated dealers gathered inside the trading chamber and announced plans to march on parliament on Wednesday to press their demands for government intervention to shore up the battered financial system.
But the head of the bourse committee, Commerce Minister Ahmad Baqer, said trading will not be suspended.
The KSE index lost 2.1 percent at 9,685.30 with the leading banks sector down 1.7 percent and investment firms off about 1.5 percent.
Shares in Kuwait's Gulf Bank, which said it incurred undisclosed losses from derivatives deals overseas, remained suspended for the third day.
Kuwait's central bank on Monday reiterated its full support for the bank, pledging that its deposits are fully guaranteed.
The market decline came despite newspaper reports that the government has set up a fund worth 1.5 billion dinars (5.6 billion dollars) to help investment firms with their troubled foreign debt.
After spending most of the day in the red, the Dubai Financial Market Index closed up 0.32 percent at 2,932.06 points as the market leader, property giant Emaar, added 3.5 percent.
The other United Arab Emirates market, the Abu Dhabi Securities Exchange, finished down 1.4 percent as the real estate sector shed 1.6 percent.
The Doha Securities Market dived 5.25 percent while the Bahrain Stock Exchange fell 1.1 percent and the tiny Muscat Securities Market ended down 0.73 percent below the 6,000-point mark.
Copyright © 2009 AFP. All rights reserved. More »
