Trading at the Kuwait Stock Exchange, the second largest Arab bourse, was halted Thursday following an unprecedented court order aimed at curbing the market's slide and preventing massive losses among small investors.
"The administrative court ordered that trading be suspended immediately at the bourse until November 17 when the court will sit again to look into the issue," said the ruling, a copy of which was obtained by AFP.
Thursday is the last trading day of the week in the oil-rich Gulf state, where the bourse has been trading at 40-month lows over concerns about a global recession and problems at a local bank.
The court issued its ruling after a lawsuit filed by lawyer Adel Abdulhadi on behalf of an investor who claimed he had incurred heavy losses on the Kuwait market over the past few weeks.
When trading was halted, the KSE Index had shed 1.8 percent, dragged down by the banks and investment sectors. The bourse has been trading at 40-month lows.
Traders celebrated the decision with shouts of "long live small traders, thank you lawyer," an AFP photographer said.
Last month, Kuwaiti investors demonstrated for four days in a row, calling for government intervention to stop the bleeding in the market which has seen around 100 billion dollars wiped off its value since late June.
The court ruling said the order was issued to spare investors from heavy losses, finding that the bourse management failed to take any measures to boost the flagging bourse.
The lawsuit was filed against the prime minister, the commerce minister who is the head of the bourse committee and the director general of the bourse, court papers showed.
Since June 24, when the KSE Index hit an all-time peak of 15,654 points, the Kuwaiti market has lost more than 43 percent.
The government of OPEC's fourth largest producer has taken several measures to try to ward off the fallout of the global financial crisis.
Kuwait Investment Authority, the emirate's sovereign wealth fund with foreign investments of around 300 billion dollars, pumped hundreds of millions of dollars into buying stocks.
The central bank of Kuwait also injected billions of dollars into local banks to safeguard the financial system from the global turmoil.
Last week, parliament passed a law to guarantee deposits at national and foreign banks.
But all measures failed to halt the slide at the stock market which has reeled under troubles by the Gulf Bank and debt incurred by local investment firms.
The Gulf Bank, Kuwait's second largest lender, said it incurred heavy losses from derivatives deals which the local media estimated at around one billion dollars.
Other Gulf markets continued to plunge on Thursday.
In the United Arab Emirates, the Dubai Financial Market dropped 5.1 percent to 2,100 points, the lowest level in more than four years. It was dragged down by the market leader, property giant Emaar, which sank eight percent.
The Abu Dhabi Securities Exchange dropped 3.5 percent despite a 0.2 percent rise by the key real estate market. All other sectors however were lower with banking down 3.6 percent and energy dropping 6.3 percent.
The Doha Securities Market retreated 2.6 percent to below the 6,000-point mark, while the small Muscat Securities Market lost 2.3 percent. The Bahrain Stock Exchange was down 0.8 percent.
The Saudi market, the largest in the Arab world closed the week on Wednesday slightly up on the day but down 10 percent on the week.
Copyright AFP