DUBAI: Dubai's
stock market ended 2018 yesterday with a 25-percent annual loss, the worst year
since the global financial crisis a decade ago, as the real estate and tourism
sectors struggled. The plunge in the Dubai Financial Market Index was the
biggest among Gulf and Arab bourses amid signs of a slowdown in the emirate's
highly diversified economy. But it was not as bad as in 2008 when the Dubai
stock market dived 72 percent after the financial crisis triggered a debt
problem for the emirate.

Boursa Kuwait
ended 2018 trading in the green zone as the premier market index rose by 0.14
points to reach 5079.5 points. The main market index rose by 15.4 points to reach
4738.5 points, same as all share market index went up by 3.2 points to stand at
5267.3 points. The value of trades was at KD 17.9 million with the volume
reaching KD 140.4 million shares done through 4,716 deals.

In 2018 Oman's
small bourse dropped 15 percent while stock markets in other energy-rich Arab
Gulf monarchies ended the year in positive territory, buoyed by an increase in
oil prices. The Qatar Stock Exchange led the gainers with a 21-percent rise
despite an 18-month-old economic and political blockade by its neighbors led by
Saudi Arabia.

The Saudi stock
market, the largest in the Arab world, ended the year up 8.3 percent despite
dipping to a three-year low in October after Saudi journalist Jamal Khashoggi
was murdered in the kingdom's Istanbul consulate. In December, the Dubai
Financial Market Index dropped to a five-year low before slightly recovering to
close the year at 2,529.75 points.

The stock
market's dive was attributed to a sharp drop in real estate sales and prices
due to oversupply and weak demand. The property market, which makes up around
13 percent of Dubai's gross domestic product, has been in decline since 2014
but its slide accelerated in 2018.

In the third
quarter alone, the price of houses dropped 7.4 percent in Dubai, according to
the UAE central bank, after declining by more than six percent in the first
half of 2018. Shares in Emaar Properties, the largest developer in the Middle
East, lost almost half their value over the past year, mirroring sharp falls
for the sector as a whole.

Economic growth
in Dubai, which is not directly dependent on oil, is expected to have slowed to
2.3 percent in 2018, from 2.8 percent the previous year, according to the
central bank. A glut of housing units and weak demand are also key reasons for
the property market downturn, the Standard and Poor's ratings agency said
earlier this year.

Meanwhile, world
stock markets staggered yesterday towards the end of their worst year since the
global financial crisis a decade ago, rocked by rising interest rates, the
global trade war and Brexit, dealers said.

London and Paris
wobbled in holiday-shortened trade on New Year's Eve-but nursed dizzying
double-digit annual falls after an exceptionally volatile 2018. Hong Kong rose
yesterday after US President Donald Trump hailed "big progress" on
resolving Washington's trade war with Beijing, but was down almost 14 percent
over the year. Equities have been hammered in 2018 by tighter monetary
policy-from both the US Federal Reserve and also the European Central Bank,
which halted its quantitative easing stimulus policy this month.

"Global
stocks are set for their worst year since the financial crisis, thanks to the
tightening monetary policies adopted by several central banks around the globe-especially
the Federal Reserve and the ECB," said ThinkMarkets analyst Naeem Aslam.
"The Fed stopped printing easy money a few years back and increased
interest rates four times this year. "The ECB also ended its quantitative
easing program and there has been discussion on ... normalizing interest
rates." The Bank of England meanwhile hiked British interest rates in
August for the second time since the financial crisis to help tame inflation,
despite worries that Brexit could wreak havoc on the economy.

'America First'

Sentiment was
also slammed by US President Donald Trump's 'America First' trade policy which
has sparked a damaging trade war with China and others. Wall Street did however
mark the longest-ever "bull market" in August, a run that began amid
extraordinary crisis-era monetary policy-but for which Trump has claimed credit
after his tax cuts and regulatory rollbacks.Yet markets have since spiralled
lower on slowing global growth, Italy's fiscal woes, a US government shutdown
and Trump's attacks on the Fed.

Investors also
ran for cover as the uncertain nature of Britain's looming exit from the
European Union in March 2019 casts a long shadow.

"Stock
markets have been on a wild ride this year and the United States has been at
the center," Oanda analyst Craig Erlam said. "Tax reforms hugely
boosted earnings, bringing an economic boost with it," he said.

However,
"the trade war with China and skirmishes elsewhere have weighed heavily on
the relevant domestic markets which has dented investor sentiment." Washington
and Beijing imposed tit-for-tat tariffs on more than $300 billion worth of
goods in total two-way trade earlier this year, locking them in a conflict that
has begun to eat into profits and contributed to stock market plunges.

In Europe
yesterday, London's benchmark FTSE 100 index dipped 0.1 percent to finish at
6,728.13 points, marking a sharp annual loss of 12.5 percent. The Paris CAC 40
climbed 1.1 percent to end at 4,730.69 points-which was drop of nearly 11
percent for the year. Many investors were away for Christmas and New Year
holidays, while trading hubs including Frankfurt, Rome, Tokyo, Shanghai and
Seoul were shut.

Return to
recession?

"2018 has
been characterized by a shift from low volatility, high liquidity and
expectations of equity out-performance to high volatility, low liquidity and
the return of a bear market in equities," said VTB Capital economist Neil
MacKinnon. "For 2019, a global economic slowdown-perhaps recession-looks
increasingly likely," he warned. Key Asian markets also limped towards the
end of the year in bear market territory-meaning that they are 20 percent below
their most recent peaks. Tokyo's benchmark Nikkei index had rounded out 2018 on
Friday with its first annual loss since 2011, and Shanghai became the
worst-performing major global stock market, dropping by nearly a quarter. -
Agencies