Saudi stock market falls further as tensions rise
Protesters in Oman Investors are concerned that unrest in Oman and Bahrain may
spread to Saudi Arabia
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Mid-East Unrest
* Libya revolt Live
* Tripoli simmers
* No-fly zone - bluff or reality?
* Lack of opposition
Stock markets across the Middle East have fallen again amid fears that civil
unrest is spreading.
Saudi Arabia's share market, the region's largest, fell 2.6% on Wednesday,
following a 6.8% slide on Tuesday.
Qatar's stock index dropped 3.1%, Kuwait fell 2.9%, and Dubai 3.6%, sparking
falls in European markets.
"The news flow is negative. The uncertainty is there," said an analyst at
Dubai-based Al Mal Capital.
The cost of insuring Saudi Arabia's sovereign debt against default - an
indicator of risk - rose 7 basis points to 1.43%.
Saudi's Tadawul share index has fallen 18% since the start of the year, even
though the kingdom's main revenue earner - oil - has risen in price.
Investors are concerned that heightened tension in the region will fuel another
oil price surge and threaten the fragile global economic recovery.
'Ripple effect'
"We are seeing a significant elevation in risk premiums, with investors
revising their expectations for the region," said Hashem Montasser, managing
partner at Frontlane Capital, a Dubai-based asset management firm.
He told the Reuters news agency: "Concerns about unrest in North Africa have
now migrated to the Gulf, albeit in the smaller countries like Oman and Bahrain.
"The fear is that there will be a ripple effect into other GCC (Gulf)
countries, so there's a lot of panic selling."
The price of Brent crude rose towards $116 a barrel on Wednesday, with CMC
Markets analyst Michael Hewson warning that it could hit $120 within the next
few days.
The gold price, at $1,434.45 on ounce, is almost at a record high, while
silver, at $34.74 an ounce, is at its highest since early 1980.
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