With recent unprecedented move in Kuwait of closing the stock exchange for one week following the huge losses investors were making due to economic downturn, the picture is getting gloomier in the Persian Gulf.

Persian Gulf was considered untouchable due to its economical stronghold on the black gold ‘Oil’. But since now the oil prices have gone down the drain by falling over 300-400% due to lack of purchasing power in the rest of the World, the effects are resonating all over the Gulf stock exchanges. The current Oil rates are hovering around US$ 45/barrel down from US$ 150/barrel, few months back.

Dubai is suffering from fallout by lower than expected real-estate deals, and fall in property prices by over 19% in last two months. Investors are wary on investing in both property and banking industry.

What does this mean for people like us? Well brace yourselves for the downturn, keep savings in the bank, stay away from the investment markets unless you have surplus cash. In that case you are in for some great deals. If you have saved sufficient extra-funds, go out an look for the bargains in property.

The Dubai Financial Market General Index tumbled 4.3 percent to 2,015.25 at 11:28 a.m. local time, extending last week’s 25 percent slump. The Abu Dhabi Securities Exchange General Index dropped 1.1 percent. Oman’s Muscat Securities Market 30 Index slid 5.9 percent to 5,854.7, poised for its lowest close since May 2007.

Abu Dhabi Islamic Bank, the U.A.E.’s second-largest lender complying with Muslim banking rules, lost 5.3 percent to 3.37 dirhams, the lowest since March 2005. Bank Muscat, retreated 7.3 percent to 0.85 rial, bringing the four-day slump to 16 percent.

More news [LINK]