Gulf stock markets suffered heavy losses this week due to retreating oil prices and ambiguity surrounding prospects of the world economy getting out of its severe downturn, financial analysts said Friday. “The plunge can be attributed mainly to the psychological correlation existing between regional and global markets,” Wajdi Makhamreh, chief operating officer at the Amman-based Sanabel International Holding, said. “Receding expectations of an early world recovery put downward pressure on oil prices and a sell-off throughout regional bourses,” he said. Makhamreh and other analysts expected severe volatility to prevail at regional markets in the coming week as investors await the release of semi-annual corporate results. Saudi stocks plummeted for the third consecutive week under selling pressures involving blue chip firms ahead of the publication of the second quarter results. The Tadawul All Share Index (TASI) of the Saudi stock exchange shed 3.3 percent this week, closing at 5,413.23 points. TASI is currently 12.7 per cent higher than the year's start, according to the weekly report of the Riyadh-based Bakheet Investment Group (BIG). The decline was led by the petrochemical sector, particularly the Saudi Arabian Basic Industries Corp. (SABIC) which dived 11 percent on rapidly falling oil prices and the imposition by foreign countries of protective fees on petrochemical products, the report said. The banking sector also fell 3 per cent due to the persisting credit crisis in the country, it added. The BIG expected volatility to prevail at the Saudi market next week, with investors awaiting the release of more half-year results of listed firms, particularly in the petrochemical and banking sectors. The Saudi stock exchange will also “continue to monitor developments on world markets, especially the US economy in order to determine the future view about the market”, the group said. Kuwait's KSE all-share price index plummeted 7.6 per cent, to close week at 7,491 points. The benchmark prices of the United Arab Emirates stock exchanges of Dubai and Abu Dhabi fell. ADX index retreated as weakening global sentiment convinces local investors to sell. RAK Properties fell 1.4 percent and it accounts for more than half of all shares changing hands on the benchmark.
