“It’s getting very serious, .... I’m surprised it’s become this bad..."

 

"... Bahrain is the only country in the Gulf to see any serious political unrest so far, but Saudi Arabia’s Tadawul bourse, the largest and most liquid in the region, has been the worst affected. The selling has been panicked and indiscriminate, hitting all stocks with little heed paid to Saudi Arabia’s healthy economy and fiscal strength. “It’s getting very serious,” says Said Hirsh of Capital Economics. “I’m surprised it’s become this bad as the economic fundamentals are still strong.” The crash in Saudi Arabia is the first real sign of financial contagion from the political crisis sweeping across the Middle East and north Africa. This sell-off has affected Saudi Arabia’s smaller neighbours. Dubai’s stock market has plunged to a seven-year low, and even wealthy, stable Qatar has been hit............... “It could be a storm in a teacup, but it indicates how nervous the local investors are,” says one trader at a London hedge fund. Analysts scanning the region for sources of instability have zeroed in on Bahrain ....  Some international investors, particularly global emerging market funds for whom Gulf stocks are risky, off-benchmark bets, appear to be losing their appetite for the region. Local retail investors are also likely to be wary until more clarity emerges on the political outlook for the Middle East’s autocracies..."