Gulf stocks surge for second straight day
9 hours ago
KUWAIT CITY (AFP) — Stocks in the Arab world raced higher on Tuesday for a second straight day, bolstered by government action to shore up the banking sector and by a spectacular global market rally.
Several Middle East markets put on seven percent or more, with Dubai and Doha leading the way in the oil-rich Gulf with gains of some 10 percent.
The Saudi bourse, the largest in the Arab world, finished up 7.29 percent after rising 9.2 percent in early trading, a day after it rebounded 9.5 percent. It shed 23 percent last week.
The Saudi Tadawul All-Shares Index closed on 6,828.96 points after soaring close to the key 7,000-point mark. It is still down 38.1 percent on the year.
The TASI was supported by the petrochemicals and banking sectors which both rose 7.5 percent. Only three firms dropped while 122 increased.
The bourse in Dubai closed up 10.76 percent, its biggest single-day rise ever, at 3,703.34 points. It was bolstered by the market leader, property giant Emaar, which surged 15 percent for the second day in a row.
Dubai Financial Market Index has already recouped most of the losses it made last week when it shed 26.7 percent. Its whole property sector rose the maximum 15 percent permitted by the market on both of the past two days.
The other United Arab Emirates bourse, the Abu Dhabi Securities Exchange, rose 7.5 percent to 3,602.45 points. It too was boosted by property shares, which rose almost 10 percent.
Tuesday's surge came after the UAE said it had made another 19 billion dollars available to local banks, the latest measure to combat liquidity problems arising from the global financial crisis.
The move brings to 32.6 billion dollars the total amount being offered by the UAE monetary authorities to meet the needs of local banks.
The markets surge "is certainly the direct result of government intervention. This has greatly lifted investor confidence," said the head of the Saudi Al-Dakkak Economic Studies House, Ali al-Dakkak.
"Prices of stocks in most Gulf states also reached low levels that encouraged investors to buy," he told AFP.
The UAE is not the only Gulf government to announce measures to shore up the financial system in recent days.
Saudi Arabia, Kuwait and Bahrain have slashed interest rates, pledged tens of billions of dollars of liquidity to domestic banks and eased lending restrictions.
Bucking Tuesday's rebound, the second largest Arab bourse, the Kuwait Stock Exchange, closed down 0.26 percent at 11,795.70 points despite opening higher. It was apparently reacting to only modest nine-month results announced by some banks.
It was the only Gulf market to drop on Monday, when all other bourses in the region bounced back sharply after last week's dramatic falls.
In Egypt, the CASE-30 stock index closed the day up 6.3 percent at 6,138. The most heavily traded stock, Orascom Construction Industries, rose 8.88 percent.
The index had lost more than half its value in six months since hitting a high of 12,000 points in May.
The Doha Securities Market closed up almost 10 percent at 8,377.36 after the Qatar Investment Authority, the emirate's sovereign wealth fund, decided to buy between 10 percent and 20 percent of bank shares.
In Oman, the Muscat Securities Market finished up 8.4 percent at 7,717.43 points, while the Bahrain Stock Exchange closed up 1.4 percent.
In the past two days, the seven stock markets in the Gulf have increased their value by more than 100 billion dollars to around 870 billion dollars, after shedding around 200 billion dollars in the past week.
