After four days of decline, Gulf central banks stepped in to save the local bourses after another day of sharp falls. The Gulf markets have shed more than $160 billion of their capitalization this week. Following Wednesday's decline, the UAE central bank dropped the interest rate by 0.50 percent, while the Kuwait Central bank lowered interest rates by 125 basic points. The Saudi Arabian Monetary Agency (SAMA) announced its readiness to pump SR150 billion upon request. Saudi authorities have put SR350 billion ($93 billion) at disposal of the Saudi banks to cope with the financial crisis, according to an official. SAMA, the Kingdom's central bank, has earmarked this sum to be at the disposal of the national banks, said SAMA Deputy Chairman Mohammad Al-Jasser. Al-Jasser added that SR200 billion were already accessible for the banks and SR150 billion would be made available upon request in the future. Qatar central bank issued a statement assuring traders that the economy remains solid. The decisions, according to analysts managed, had a positive impact on the Tadawul in Saudi Arabia, where losses fell from 9 percent to 1.5 percent, while Kuwait fell by 1.4 percent. The Saudi stock market, the largest in the Arab world, was closed on Thursday after a rollercoaster ride on Wednesday, its final day of trading this week. After slumping below 6,000 points for the first time in more than 52 months and shedding more than eight percent, Saudi's Tadawul All-Shares Index ended the day down 1.5 percent at 6,160.52 points. For the week as a whole, the TASI plummeted 17.4 percent following the market's reopening on Monday following the Eid holiday. Most Arab stock markets rebounded on Thursday, bolstered by interest rate cuts and infusion of fresh liquidity, following this week's battering by concerns over the global financial crisis. However, after the concerted action by the central banks, six of the seven Gulf stock markets showed moderate to strong gains on Thursday at the close though all of them finished the week sharply down after panic about the global financial meltdown took a heavy toll on share prices. The Kuwait Stock Exchange, the second largest in the Arab world, finished up 3.8 percent at 11,905.70 points, spurred by reports of a massive government package worth more than $20 billion to assist the financial system. The KSE index, however, ended the week down 7.3 percent despite Wednesday's interest rate cut by the country's central bank. The Muscat Securities Market made the strongest recovery on the final day of the trading week, closing up 8.3 percent on 7,178.39 points, leaving it down 9.2 percent for the week. In the United Arab Emirates, where interest rates were also reduced on Wednesday, the Dubai Financial Market Index reversed a small part of the 25 percent losses it has accumulated in the past four days. The index bounced 3.7 percent to close on 3,198.09 points, remaining a massive 22.5 percent below last week's finish. DFM was supported by the telecom and real estate sectors which rose 9.3 percent and 5 percent, respectively. UAE neighbor the Abu Dhabi Securities Exchange, closed up 1 percent on 3,207.30 points on the back of a 3.7 percent rise by the real estate sector. The UAE also cut interest rates on Wednesday. Like other markets, Abu Dhabi finished the week sharply lower, registering a 18.9 percent decline. – In gas-rich Qatar, the Doha Securities Market increased 1.9 percent to close on 7,573.62 points. It has shed 18.7 percent in the week.
