Arab Stock Markets Fall.

The Saudi stock market plunged another 8% on April 18, taking its fall since April 9 to 26%. Other Arab markets were hit, with the Dubai Exchange falling 3.1%, Qatar 2.1% and Egypt 2%. The Tadawul All Share index in Saudi Arabia was trading at 12,994 late on April 18, compared with 17,557 at the close of trading on April 9. By April 18 it had fallen 37% from its February peak to its lowest level for eight months. Analysts said it was a dramatic reversal after the oil-fuelled boom which led to spectacular share price gains in 2004 and 2005 and saw up to 3m retail investors piling into the market in search of quick wealth.

The FT on April 19 quoted Oliver Bell, senior investment manager at Pictet Asset Management in London, as saying the GCC market still appeared to be over-valued, adding: "We estimate the Saudi market is trading on a forward multiple of nearly 30 times 2006 earnings. Despite the correction, valuations are still at extreme levels compared to other emerging market opportunities".

The FT quoted an un-named Gulf analyst as saying the market was still feeling the impact of a recent clash between the Saudi regulator - the Capital Market Authority - and two speculators accused of manipulation. Worries about confrontation over Iran's nuclear programme also weighed on sentiment. Bell said some of the large GCC investors who had made "massive returns in the last two or three years" would still make healthy profits even if they sold at current levels.