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KUWAIT CITY - Stock markets plunged across the Arab world on Tuesday as panic over the global financial crisis gripped investors, wiping billions of dollars off the value of shares.The market in oil powerhouse Saudi Arabia sank by about nine percent while the biggest percentage loss was reported in Egypt, where the key index plummeted by more than 16 percent to its lowest level in two years.In all, the seven stock markets in the energy-rich Gulf have shed about 150 billion dollars of their capitalisation in the past three days alone to around 800 billion dollars. "It is a catastrophe. It is clear that we will remain volatile and unpredictable as long as global markets remain impacted by the financial turmoil," Saudi economist Abdulwahab Abu-Dahesh said.The Tadawul All-Shares Index (TASI) in Saudi Arabia-home to the Arab world's biggest market-was trading at 6,150.46 points, down 8.6 percent just two hours before the close.The index had tumbled 9.81 percent on Monday."We are a part of this world and are impacted psychologically and practically by what is happening in global markets," said Kuwaiti economist Ali al-Nimesh.The slide in the Saudi market was also driven by the modest profits reported by several major banks, with two already announcing a drop for the first nine months of the year.Almost all Saudi banks declared in announcements posted on the TASI website that they were not involved in any way in the global sub-prime mortgage crisis and are not expected to be affected.But the move apparently failed to lift investor sentiment from rock bottom.Other stock markets in the Gulf and Egypt were also down sharply.Egypt's key CASE-30 stock index dropped by 16.4 percent from 7,059 to 5,903 points after trading opened for the first time since September 29 following a string of public holidays."There's panic, everything is down, it's incredible," Ahmed Hefnawi, an analyst with major investment bank EFG Hermes, told AFP."All sectors have been hit, with losses of 65 percent on some stocks."Trading was halted in several stocks after they exceeded the amount they were allowed to drop, Egypt's official MENA news agency reported.The CASE-30 is now at its lowest point since September 2006, after almost doubling in value over the last four years to reach a high of 12,000 points in May.In the energy-rich Gulf states, Dubai Financial Market dropped 5.14 percent to 3,369.15 points, its lowest level in more than two years.Shares in real estate giant and market leader Emaar shed 2.14 percent to under six dirhams (1.63 dollars), less than half book value, according to financial analysts.The drop came despite attempts by government-controlled real estate firms in Dubai to maintain investor confidence by announcing new multi-billion-dollar projects that have become a hallmark of the booming city state.The Abu Dhabi Securities Exchange, the other bourse in the United Arab Emirates, closed down 4.6 percent at 3,395.31 points, mainly because of a sharp drop in real estate.The Kuwait Stock Exchange, the second largest Arab bourse, slumped 2.6 percent to a 16-month low of 11,635.90, apparently after the government rejected calls by lawmakers to intervene in the market.The smaller Muscat Securities Market shed 7.3 percent while the Doha Securities Market was down just 1.55 percent.Analysts said Gulf states must help restore investor confidence by pumping funds into the banking and financial system. "Central banks must pump funds into the banks and show that we are not facing a liquidity problem. That will help restore investor confidence," Abu-Dahesh said.In Israel, stocks recovered after dropping sharply over the previous two days.The TA-25 index, which includes the top 25 stocks by market capitalisation, was 1.78 percent up at 781.59 points while the Tel-Tech index, which is tied to Israel's booming hi-tech sector, was up 3.68 percent at 165.04. http://www.middle-east-online.com/english/?id=28183As in the days of Noah...
