Persian Gulf Financial Markets, Iraq Cabinet Moves, and al-Qaida in Gaza

Gulf Markets:
It looks like the substantial correction this year in Persian Gulf financial markets has not run its course yet. Clearly, some easing of tensions between Iran and the US did not help the markets. The indices declined again Werdnesday as follows:
Saudi Arabia 4.94%- Kuwait: 1.2%- Dubai: 4.83%- Abu Dhabi: 3.36%- Qatar: 3.17%- Bahrain: 2.15%

There have been complaints about the management of the exchanges and about the indices used to measure market movement. These complaints may have some validity, but in some way they are like shooting the messenger for a bad message. The main problem with these markets, what makes any correction so precipitous, is the notorious lack of transparency as defined by the standards of major international markets. Some markets now require quarterly data, but useless quarterly data are no better than useless annual data. There is also a notorious lack of professional, and perhaps ethical, standards for appointing many companies' top management. This tends to reduce the credibility of any comapny outlook reports disseminated by the management.
In addition, the age of the internet and online trading has affected the domestic Gulf markets in some ways. Middle Class local investors now can trade in international markets online without needing huge portfolios and overseas investment managers. In other words anybody, and not just oil potentates, can open a foreign online account and trade.

In Kuwait, a local consultancy firm has again referred to an alleged top-secret report of the national oil company that claims the country's oil reserves are only about 25 billion barrels (25% of the official figure). This doubtful report, if proven true, would have serious consequences not only for the country's future economic course, but it would also impact world oil markets. It raises the question of whether figures for oil reserves are being manipulated in the Middle East and their impact on postponing needed reforms.

Iraq:
Gulf reports indicate that the new Iraqi cabinet will be announced this weekend at the latest, perhaps with one or both of the portfolios of Interior and Defense left open for now. Likely candidates for Interior is Abdel-K al-Taher or Dr. Ahmad Chalabi. As I reported earlier, Hoshyar Zibari will remain Foreign Minister, and Education will remain with the dominant coalition (the E'eatilaf) bloc, most likely with the Da'awa Party. Dr. Hussein al-Shahristani looks like the next Oil Minister- he is a nuclear scientist who once refused to cooperate in Saddam's projects and was jailed. This according to various reports in al-Sabaah and other Middle East media.

al-Qaida in Gaza (but not Eyeless):
Arab reports mentioned a branch of al-Qaida has been set up in the Palestinian territories. This would introduce a new element into the security and political situation. Hamas, which runs the government, is in reality an offshoot of the Moslem Brotherhood, an organization originally started around 1928 by Hassan el-Banna in Egypt. It is considered a moderate Islamic organization, perhaps not by Western or even Arab standards, but certainly by al-Qaida and Salafist standards.

Jordan continues to accuse Hamas of plotting terrorist activities in the country. Now Jordan has introduced a new element, claiming that Iranian missiles were being smuggled by Hamas into Jordan. Hamas denies all charges, while Iran apparently thinks the charges, and perhaps their source, beneath a response. It is not clear whether the alleged missiles were Iranian-made, Iranian-supplied, Iranian-financed, or Iranian-approved (as in k-o-s-h-e-r). Maybe, it is possible, but Jordanian intelligence is like most Arab security services, it is pervasive in the country, but it is also used as a political tool.

Cheers
Mohammed