Arab stocks plunge on world economic worries, second quarter results

Amman - Arab stock markets plummeted across the board this week as investors came under 'psychological' pressure from bad performance on global markets and pessimistic predictions of second quarter profits, financial analysts said Friday. 'I believe that Arab investors have come again to closely monitor the situation at world markets,' Wajdi Makhamreh, chief operating officer at the Amman-based Sanabel International Holding, told German Press Agency dpa. 'We think regional markets plummeted this week mainly due to the psychological impact of what is going on at world bourses,' he said. Makhamreh also blamed the bad performance of Arab stock markets over the past two weeks on fluctuating oil prices and expectations that the second quarter results of listed firms could be disappointing due to the world recession. He also cited the financial difficulties facing the Saudi al- Qussaibi and Saad groups as one of the reasons behind this week's retreat. Saudi shares dived this week amid heavy selling pressures due to deteriorating US and European market indices and fluctuating oil prices. The Tadawul All Share Index (TASI) of the Arab world's largest stock exchange declined 6.4 per cent this week, closing at 5,609.02 points. It was the Saudi market's worst weekly performance since January. TASI is currently 16.8 per cent higher than the year's start, according to the weekly report of the Riyadh-based Bakheet Investment Group (BIG). The report expected volatility to continue at the Saudi market until the first week of July when businesses start to release their quarterly balance sheets. Jordanian shares also plummeted this week, led by the Arab Bank amid reports that the bank was one of the key debtors of al-Qussaibi group. 'The Amman Stock Exchange (ASE) was the scene for panic selling that culminated on Thursday,' Makhamreh said. The ASE all-share price index plunged 3.99 per cent this week, closing at 2,829 points, according to the market's weekly report. Kuwait's KSE all-share price index shed 1.7 per cent this week, to close at 8,140 points. The benchmark prices of the United Arab Emirates stock exchanges of Dubai and Abu Dhabi plunged 7.7 per cent and 6.1 per cent, closing respectively at 1,859 points and 2,628 points. Egypt's AGX30 index, measuring the performance of the market's 30 most active stocks, dived 11.1 per cent this week, closing at 5,479 points.