Gulf stocks take a breather

Gulf stock markets steadied on Wednesday after heavy losses in the previous two days, in the absence of fresh developments in the Dubai debt crisis and as the UAE markets were closed. Qatar's Doha Securities Market added more than 350 points to close 5.3 percent higher, regaining most of the losses it sustained on the previous day when it plunged 8.3 percent.
The DSM index still closed below the 7,000-point psychological barrier at 6,949.19 points. However, it surpassed the end-2008 close of 6,886.12 points. All four sectors made gains, led by banks after several lenders said they were not exposed to the Dubai debt crisis. The Kuwait Stock Exchange closed at 6,650.80 points, down 1.4 percent to a nine-month low after fluctuating sharply at the start of trading.
The market plunged 2.7 percent on Tuesday on fears of the impact of Dubai debt problems on Kuwaiti firms. Only the insurance firms were higher while the remaining seven sectors dropped, including the leading banking sector which lost 0.75 percent. Investment firms dropped 2.3 percent.
The fall in the Kuwaiti market came despite assurances of support by the government and the central bank, and after dozens of listed firms said in statements they were not exposed to Dubai debt. The Kuwaiti market had been sliding even before the Dubai debt announcement, because of political tensions between the government and parliament. MPs are scheduled to question the prime minister in parliament on December 8 along with three other ministers on a variety of allegations.
The market also fell under pressure from news of a case of suspected fraud involving Agility Logistics, a market heavyweight, and reports that Indian state-owned telecom company BSNL has suspended a plan to purchase a stake in Zain telecom. The tiny Bahrain Stock Exchange, which reopened on Wednesday after a six-day holiday, eased just 0.12 percent amid quiet trading. Kuwait and Bahrain markets are the only Gulf bourses to be trading below their 2008 close.
The stock markets of Saudi Arabia and Oman are still on holiday, while the bourses of Dubai and Abu Dhabi are closed for the United Arab Emirates national day. The Dubai market shed 12.5 percent of its value and Abu Dhabi lost 11.5 percent in two days of trading following the Dubai World announcement last week that it was seeking to suspend payment of some of its 59 billion dollars of debt.