Gulf stock markets are expected to regain a major chunk of their losses next week, following Thursday's rally on the Dubai stock exchange, financial analysts said Friday. The markets plummeted across the board this week under the impact of the announcement by the Dubai World conglomerate that it was asking creditors to delay repayment 59 billion dollars of debts. The main losers of the crisis were the United Arab Emirates bourses of Dubai and Abu Dhabi. Saudi shares also witnessed a sharp decline this week mainly due to what Saudi analysts considered a lack of clarity about the exposure of Saudi banks to Dubai World. The Tadawul All Share Index (TASI) of the Arab world's bourse tumbled 6.3 percent this week, crashing through the 6,000-point psychological barrier to close at 5,954.13. TASI is currently 24 percent higher than the year's start, according to the weekly report of the Riyadh-based Bakheet Investment Group (BIG). “The negative performance of the Saudi stock market was driven mainly by the banking sector despite assurances that Saudi banks' exposure to the Dubai World crisis was minimal,” the report said. BIG expected investors “to restore trust in the market in the coming period and wipe out most of the losses they suffered this week”. While Dubai World's potential default and asset sales are a sign that not all governments will bail out struggling corporations, the “crisis” does signal longer-term opportunities in some frontier markets. These countries fall under the notion of the emerging markets of tomorrow. The special appeal of the Middle East region is that energy-driven profits will spur growth in other areas, including infrastructure and healthcare. Analysts estimate that these nations will generate an oil surplus of $1.1 trillion - equal to about $30 million per resident. In terms of per capita GDP, the region sports an overall average of $7,000 per resident, making the Gulf states second to Latin America in terms of emerging economies. Kuwait's KSE all-share index gained 0.9 percent to end the week at 6,758. Despite Thursday's rebound, the Dubai stock exchange closed the week down by 10.4 percent at 1,641 points. The Abu Dhabi stock exchange also plunged 3 percent in the week.
