Kuwaitis feel the pain from the global financial crisis

Thu Mar 26, 2009 9:58am EDT
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By Ulf Laessing and Rania El Gamal

KUWAIT (Reuters) - Staring at large screens displaying yet another fall in stock prices on the Kuwaiti bourse, Abou Ahmad fears his life savings have evaporated.

Like many Kuwaitis, he thought investing in the bourse carried little risk since the market had been rising since 2001, oil prices were soaring and countries across the world's top energy-exporting region were booming.

"My 37 years of hard work went all in the bourse and now it has fallen," said the state employee, his investments ruined by falling oil prices and the global downturn.

"I bought 80,000 shares when they were being sold at 960 fils a share. Now look at it, the stock is at 45 fils," he said, sitting with fellow small investors on the ground floor of the bourse, which has shed almost 60 percent since July.

Kuwaitis may be relatively sheltered from a global crisis compared to other countries through a welfare state guaranteeing them state jobs, free education and health care. They rarely get fired at private firms that must fill quotas with nationals.

But Kuwaitis are feeling the pain as thousands poured their savings into the Arab world's second-largest bourse or even took loans to buy stocks. Many are now demanding help, putting pressure on the government not to cut back a huge public sector.

"I took a loan for 50,000 dinars ($172,700) and put it all in the bourse, now the value of the shares I bought fell to almost 7,000 dinars," said Abdullah al-Mutairi, 36, a father of three.

"Every month, I pay 550 dinars for rent and 600 dinars for the loan I took. I have to find another income to be able to live and provide for my family."   Continued...

<p>A Kuwaiti investor next to a computer monitor on the trading floor of the Kuwait Stock Exchange March 26, 2009. REUTERS/Stephanie McGehee</p>