What does the global financial crisis mean for Arab stock markets?
The impact of the global financial crisis on Arab stock markets varies significantly from one country to another. Early impact was visible in countries with strong links to global financial markets. On average, regional stock indices have fallen by about 50%. Stock indices in Gulf Cooperation Council (GCC) countries saw declines of between 30-60% in the last quarter of 2008. In response, GCC countries announced various measures and rescue mechanisms to maintain liquidity and support their stock markets. In non-GCC countries, stock markets also experienced declines. But some indices – including Lebanon and Tunisia – were fairly resilient. Have Sovereign Funds and the Banking sector been adversely impacted by the global economic downturn in recent months? Sovereign funds have taken some losses on their investments in global financial institutions. Some early estimates by the Council on Foreign Relations suggest that sovereign funds with a high allocation into equities, emerging market an
