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Gulf markets drop on earnings worries

Gulf Arab markets slumped yesterday, felled by a combination of worries about corporate earnings and global economic prospects amid a waning oil price.

  • Reuters
  • Published: 23:51 January 15, 2009
  • Gulf News

Dubai: Gulf Arab markets slumped yesterday, felled by a combination of worries about corporate earnings and global economic prospects amid a waning oil price.

Bank stocks were particularly hard-hit as a slew of bad news this week weighed on the sector, ranging from a surprise decline in Qatar National Bank's quarterly profit, an earnings warning from Bank Muscat and Moody's negative outlook on UAE banks.

Adding to the gloomy sentiment, banks in Europe and the United States faced fresh doubts about their ability to ride out the global financial crisis, provoking another crisis of confidence.

"All that is bringing back the fear factor," said Mohammad Yasin, managing director of Shuaa Securities. "In the GCC market, the UAE in particular, we started the year with optimism that maybe things will be much better in terms of liquidity.

"But in past days, statements coming out have been trying to lower expectations of people and [they] bring back fears about the economy, outlook."

Qatar's index shed 7.01 per cent, as Qatar National Bank extended its decline, falling 9.29 per cent as the market continued to react to its results which missed forecasts.

"The [Q4 results] indicated the bank sector could witness a drop of profits in Q1 and Q2 in 2009," said Mohammad Abu Ghoush, head of equities brokerage at Ahli Bank in Doha.

In Oman, the benchmark index ended at its lowest level since December 25, hampered by Bank Muscat which issued a profit warning.

Shares in the bank fell nearly 6 per cent after it said yesterday that it may book about 26.9 million rials in writedowns in its 2008 results, due at the end of January.

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