India's LARGEST EVER political poll. Have you participated yet?
  • search

Saudi shares hit 8-month low, Gulf bourses on edge

By Staff
Subscribe to Oneindia News

RIYADH/DUBAI, Apr 16 (Reuters) The Saudi share index sank below 14,000 points for the first time since August on Sunday as a selloff unleashed by a crackdown on market manipulation rattled markets across the region.

Other Gulf Arab markets, among the world's best performers last year, were trading sharply lower and analysts were watching for any signs of the contagion that swept the world's biggest oil exporting region last month.

''I think we're going to have a rocky couple of weeks ahead with the Saudi market moving in a volatile way,'' said Hashem Montasser, head of regional asset management at EFG Hermes.

''Investors across the region are nervous and are taking their cues from the Saudi market.'' At 07.50 GMT the main Saudi index was trading at 13,508, down 6.02 percent. It hit 13,452 points earlier in the day, its lowest level since Aug 2 according to Reuters data.

On Saturday the index dropped 8.4 percent, its sharpest one-day decline on record, and is now trading below lows hit on March 14, when markets tumbled across the region.

That downturn ended a months-long rally powered by record oil revenues that prompted millions of retail investors to borrow heavily and buy stocks.

Gulf had begun to recover their poise, aided by government intervention, when the Saudi bourse tumbled on April 10.

A day earlier the Saudi regulator had announced the suspension of two dealers on charges of market manipulation, and brokers said wealthy speculators triggered the sell-off fearing their grip on the bourse was threatened.

The volume of speculative capital in Saudi Arabia has been swollen by record oil revenues. Managers of massive private portfolios, often acting in concert, have enormous clout in a market that has little institutional capital.

But by Saturday, panic-stricken retail investors were leading the decline as investors across the region watched nervously.

''You know there is disaster in the Saudi Stock Exchange.

This has affected the Kuwaiti market,'' said Naser al-Nafisi of al-Joman Centre for Economic Consultancy in Kuwait.

''This effect is psychological. We have a lot of small investors who are not sophisticated ...They feared that this will be extended to the Kuwaiti market.'' The Kuwait market was down 3.58 percent, while Dubai had fallen 3.8 percent and Abu Dhabi had dropped almost 2 percent.

REUTERS PV RN1429

For Breaking News from Oneindia
Get instant news updates throughout the day.

X
We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Oneindia sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Oneindia website. However, you can change your cookie settings at any time. Learn more