Economy-Finance

Gulf shares spiral down on oil dip, Iran fears

By Thomas Atkins

DUBAI, Sept 4 (Reuters) – Gulf Arab stocks plunged onThursday as weaker oil prices and tensions with Iran compoundeda broad sell-off in emerging markets, sending some indexes downas much as 4 percent and erasing all the gains of 2008.

An anti-corruption campaign by the Dubai government has sentsome investors scurrying, while many foreigners who have beenforced to sell broad portfolios of emerging markets stocks areoffloading Gulf shares as well, experts said.

“We are in a critical situation right now,” said Amjad Bakirat brokerage MAC Capital in Dubai.

Oman’s blue chip index .MSI shed over 4.3 percent to hit alow of 8,784 points, erasing all the gains of 2008 and falling28 percent from its lifetime high set in June.

Qatar’s main index .QSI fell 2.26 percent to 10,014points. The Doha benchmark has fallen 21 percent since reachinga 2-1/2-year high on June 11, meaning that it now joins themarkets of Oman, Dubai and Saudi Arabia in bear territory.

Investors selling broad emerging market portfolios have beenforced to offload Gulf shares as well, even though oil revenuesassure sustainable growth in the region, said Yazan Abdeen, fundmanager at ING Investment Management in Dubai.

“The only reason for the fall in the market is that all thisbad news globally is contagious. The local investor has takenrefuge by not investing, taking out liquidity, while there is atthe same time a seller,” Abdeen said.