A Kuwaiti stockbroker lost a court bid Thursday to force the temporary closure of the country's stock exchange, while scores of traders stormed out of the bourse demanding the government act to halt the near-daily losses that have accrued amid fallout from the global financial crisis.
Attorney Adel al-Abdul Hadi said the court dismissed Khaled al-Awadi's case, citing a lack of jurisdiction.
But al-Abdul Hadi said the ruling has not dampened his client's resolve and that al-Awadi and three others have already filed a similar suit in another court.
The Kuwaiti bourse has been falling steadily despite the government's injection of money into the economy and the Kuwait Central Bank's 1.25 percentage-point cut in the discount rate earlier this month.
But, in a sign of the increasing fear that the contagion gripping world markets will spread to this oil-rich region, traders walked out of the bourse Thursday as the market fell almost 3 percent.
Demonstrating outside the chocolate-brown granite building, many carried signs calling for an immediate halt to trading. Others described the stock exchange as “The Flea Market” and the “Adventurers' Stock Market.”
Police were present at the demonstration, which continued peacefully for about two hours before traders dispersed.
Despite the sharp outcry in Kuwait, the country's exchange has suffered less of a pounding than others in the six-nation Gulf Cooperation Council.
Since January, the Kuwaiti exchange has fallen by more than 16 percent. In contrast, Saudi Arabia's benchmark Tadawul index is down by more than 44 percent and the Dubai Financial Market is off 45 percent, according to data from Zawya.com, a Middle East business information Web site.
Leading the plunge has been Egypt, a non-GCC country whose CASE 30 benchmark index is down about 53 percent for the year.
Analysts have said the steep declines are largely a result of panic selling by investors fearing a spillover into local markets from the global financial meltdown.
Officials have sought to allay those concerns.
Kuwaiti Central Bank Governor Sheik Salem Abdul-Aziz Al Sabah said Saturday that, in his view, there was no need for the government to guarantee bank deposits, adding that the country's banks were “bloated with liquidity.”
Elsewhere in the GCC, the United Arab Emirates' central bank, for example, has stepped in to offer support to the markets through a variety of measures such as cash injections into the economy and lower lending rates.
Officials across the region have repeatedly stressed that their respective financial sectors are solid and no liquidity problems exist.