DUBAI: Middle East stocks slumped to multi-year lows yesterday as speculation intensified that a five-year Gulf property boom was over and developers could be forced to merge as financing conditions deteriorate.
Ambitious Gulf developers have unveiled $100 billion in new projects this week and officials have tried to restore confidence in the market, but investors focused instead on falling global markets.
Shares in Saudi Arabia fell by 7.7 per cent to their lowest level since the index was reformulated in 2007.
Officials from Saudi Arabia, Kuwait and Oman moved to reassure investors that the decline in regional markets was temporary and touted their countries' strong economies.
Supporting their efforts, a global investor sentiment survey showed yesterday that Middle East property markets are expected to outperform those in other regions for up to two years.
Jones Lang LaSalle, a leading real estate investment and advisory firm, said its research pooled the views of more than 350 developers, sovereign wealth funds, and high net worth investors .
It said the survey was carried out in the aftermath of the collapse of US investment bank, Lehman Brothers.