DUBAI/CAIRO, Sept 22, (RTRS): Gulf stocks declined on Thursday following US Federal Reserve warning the United States faced a grim economic outlook with “significant downside risks” and world stocks also plummeted.
Thin participation by local funds and sideways movement of the markets for the past several weeks limited losses.
Local investors are likely to hold back on building new positions until they get more clarity on whether Greece will be given aid to avoid default and how European banks are managing the crisis.
“We’re waiting for more guidance from Europe before we can justify putting more cash on the table,” said Matthew Wakeman, EFG-Hermes managing director for cash and equity-linked trading.
Kuwait’s shares fell to a two-week low on fresh political tensions after a protest rally late Wednesday.
The index drops 0.7 percent to its lowest close since Sept 7.

Volumes slumped to a three-week low as investors remain largely on the sidelines, waiting for tensions to ease.
About 2,000 Kuwaitis gathered at a square outside parliament in the capital to protest against alleged government corruption.
In Dubai, real estate stocks, the usual target of retail-investor trading on short-term investments, dragged the index 0.8 percent lower to its lowest close since Sept 12.
Contractor Arabtec fell 0.7 percent, accounting for nearly a third of all shares exchanging hands. Emaar Properties , the largest stock on the index by market capitalisation, dropped 1.1 percent and Drake & Scull declined 2 percent.

In Oman, the index slipped 0.7 percent to its lowest close since Sept 13.
Oman International Bank was the most traded stock, dropping 2.6 percent. Heavyweight Bank Muscat fell 1.3 percent and Bank Sohar slipped 0.6. Bluechip Renaissance Services declined 1 percent.
“We advise investors to follow a wait-and-watch policy in the coming trading sessions owing to the higher level of (global) instability and also avoid high beta counters,” Gulf Baader Capital Markets wrote in a note to clients. “Expect the index to see support at about 5,690 points.”
Elsewhere, Doha’s bourse ended 0.6 percent lower, slipping from Wednesday’s 11-week high.
Industries Qatar fell 2.7 percent, Qatar Islamic Bank shed 1 percent and Barwa Real Estate slipped 1.2 percent.

Local economies however, are expected to withstand the global doom, with government spending strengthening growth outlook. “After the recent Arab spring, GCC governments realized that social spending, job creation, and education are key to social and economic stability,” said Joseph Kawkabani, Franklin Templeton Investments (ME) chief investment officer of equities.
“Even if the global economy might slow down, government spending in the Gulf will act as a buffer backed by healthy sovereign balance sheets.”
Companies in sectors linked to infrastructure, telecommunication, and consumer spending will do relatively well, he added.
Qatar aims to invest billions of dollars in an agricultural city to house food growers and processers, in an effort to increase its food supply security and combat rising food prices, a government official said on Wednesday.

Egypt
* The benchmark fell 2.2 percent to 4,335 points.

Kuwait
* The index dipped 0.7 percent to 5,916 points.

Dubai
* The measure fell 0.8 percent to 1,460 points.

Oman
* The index dipped 0.7 percent to 5,699 points.

Qatar
* The benchmark slipped 0.6 percent to 8,445 points.

Abu Dhabi
* The measure eased 0.02 percent to 2,557 points.

Bahrain
* The measure fell 0.9 to 1,245 points.