Traders of the Persian Gulf stock exchange struggle to renew trade volumes
By Rose Anderson
The stock exchanges of the Persian Gulf are in trouble stimulating the volumes of their trade even after the Dubai world debt deal spurred the issuances of bond and share sales. The share market has always been a flourishing one in the Dubai market and people have often earned huge yields from trading in the stock market. In order to get debt help, they have utilized the proceeds of stock market trading. The quantity of shares that have been traded in Dubai, Qatar and Oman is now less than even half of the amount that was a year ago. In Saudi Arabia, its down by 44% and in Kuwait, it has reduced by a 28%. The Gulf countries see a large amount of debt that has to be dealt with and therefore, debt experts are of the opinion that there are a lot of other issues that need special attention. An eminent spokesperson of an asset management company has reportedly said that the improved sentiments and the mentalities of most debtors and investors have boosted the market catering to the fixed income but the equity markets are still under trouble. The volumes of shares have reduced after the world’ s worst hit recession and after the collapse in the market prices of the real estate properties in Dubai. The financial market of Dubai has tripped by 80% to 1746.98 from its highest in the year 2007. Dubai has reportedly held a debt amount of $109.3 billion to convert the emirate into trade, tourism and hub of financial services, according to the statistics of the IMF (International Monetary Fund). The head of the departments of 16 Arab stock exchanges are getting together in Beirut to discuss the solutions to the problems of rising debt since the beginning of the economic crisis. The index rate of some of the largest stock exchange companies lost 2% in the first quarter of 2010. One of the emirate’ s three state controlled companies has reportedly said that they need to streamline $24.9 billion in debt. The company has also said that they have received sanction from the creditors to alter the terms of their debt as they wanted to get debt help. As the equity markets reverberated, companies in this particular region joined a gush in emerging sales of the market shares in order to raise funds. An institutional trader in Abu Dhabi has said that he believes that the worst is almost over with the Gulf countries. The expected volume will gradually come back to the debt market as an increasing number of structural changes are incorporated to get back the confidence of the investors. They expect the retail investors to come back while the economy recovers from the great recession. With their return the volumes will also go up.