The Saudi market plunged to its lowest in more than four years

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The Stock Exchange of Saudi Arabia, the largest in the Arab world in terms of capitalization, fell nearly 6% Saturday, the first working day of the week, closing below the symbolic threshold of 6000 points, its lowest in more than 4 years.

The Tadawul All-Shares Index (TASI) finished the day down 5.94% to 5794.87 points, its lowest level since mid-2004.

Only one of 15 sectors were up, while 118 listed companies have finished in the red and seven other up. The petrochemical sector fell by 8.5%.

Stock markets in other Gulf oil monarchies opened the week on Sunday, while the crisis continues to ravage the international financial system.

The fall in oil prices also seems to weigh heavily on stocks of Gulf monarchies, which pump about 16 million barrels per day. The price of crude spent Friday under $ 80 in New York and 75 dollars in London.

Accordingly, the six monarchies lose every day around one billion USD, compared with their oil revenues in July when crude prices were mounted to over 147 USD a barrel.

The Saudi market decline occurred despite statements Thursday in the Saudi Arabian Monetary Agency (SAMA), the central bank of the kingdom, which has ensured its readiness to inject over 93 billion dollars in the system banking. The index of banks fell 4.8%.

The drop has also continued despite the announcement by some firms impressive in the first nine months of 2008, with profits up 155% for Saudi Fertilizers Co. and 17.4% for the Saudi British Bank .

The Tasi lost last week 17.4% in three days. It is now down 47.5% compared to 2007.

The stock market in the first world oil power is the largest in the Arab world with a capitalization of some 300 billion USD, against 450 billion at the end of 2007.

"This fall on the Saudi market is unjustified and the situation will become stable," said the Saudi Finance Minister Ibrahim Al-Assaf, quoted by the official Spa.

According to him, the global financial crisis "will not affect development projects in Saudi Arabia, pledged to blows billion. The central bank "has the means and capacity to respond to any request for cash or support local financial institutions," he added.

Scholarships in other Gulf monarchies had suffered heavy losses last week, led the bourse in Dubai, an emirate booming economy, which has plunged about 25%.

Gulf economists have explained the fall in Saudi Arabia and other monarchies in the panic caused by fallout from the global financial crisis which has shaken investor confidence.

According to these economists, traders worried about the fate of Gulf Arab investments abroad, estimated to 2,500 billion USD.

"Our economies are strong and have evolved at a rapid pace. Our banking system is protected and it is too exposed to the global banking system," noted Saudi economist, Ehsan Bu-Hulaiga.

"What we have seen is a reaction to the global crisis. It is surprising to see falling share prices of good companies that have achieved excellent profits. This is panic and a lack of confidence," he said to AFP.( Finance Information City )