Gulf stocks rebound on Saudi hardline against protests and government buying
Posted on 06 March 2011 with 2 comments from readers
Gulf stocks rebounded from the lows posted by the end of last week as Saudi Arabia moved to support its own bourse and issued a hardline statement confirming that all protests are illegal, although that did not stop three small demonstrations in the Eastern Province on Friday.
On Saturday the Tadawul gained 7.3 per cent to 5,710 points, its largest gain since November 2008, after reassurances from the finance minister that the economy is ‘in excellent shape’ and buying by government institutions.
Marches banned
The Interior Ministry said it had banned all protests and marches. The state TV channel al-Ekhbariya added that security forces would use all measures to prevent any attempt to disrupt public order.
Shia in the Eastern Provinces are showing solidarity with their spiritual brothers in Bahrain where there is a tense stand-off between much larger demonstrations and the authorities.
The Dubai Financial Market rebounded more than five per cent when it opened on Sunday, after trawling seven-year lows last week. However, it is clearly far too early to say whether this will prove to have been the bottom of the recent bear market.
Back to Bahrain
The situation in Bahrain remains very uncertain, although it has to be said that if the Shia can only muster demonstrations of around a hundred people after all that has happened in the region over the past month then this problem may well have been exaggerated. Bahrain for the timebeing remains the flashpoint and the focus of discontent.
Problems in Oman’s industrial city Sohar can also be framed as an isolated incident but one that urgently needs to be addressed. All eyes are therefore back on Bahrain and oil prices.
As the world’s biggest oil exporter Saudi Arabia does actually stand to make a huge profit from currently high oil prices. But for the rest of the world this is an inflation shock coming on top of a weak recovery from the worst global financial crisis in living memory.
It should be global stock markets that are suffering, not the Oil States provided that their internal security is not compromised. And Saudi Arabia may have to follow up its words with action to convince investors and protestors of its seriousness.
2 Comments posted by readers:
Marches and protests being banned means that were people to revolt against their government like they did in Egypt,Tunisia and Libya the Saudi government would most likely use the same force that Gadaffi is using against his own people. Look for oil above $150 and maybe even touch $200 were protests and chaos to break out in Saudi Arabia.
Riapidly changing times & very unpredictable, however if Lindsey Williams is right in his latest interview we will see oil going over $200 soon and chaos spreading more in ME. This will hasten already crumbling western economies and we will witness inflation sky rocketing. It seems there is no stopping now, chaos by desgin or its just happening! whatever it is unleashed now, welcome to new world meltdown.