Gulf economy hit hard by Trump victory
There was a sharp drop in Gulf stock markets after Trump's victory. (AFP/File)
As stock markets in the Gulf fell sharply along with global bourses in reaction to Donald Trump's dramatic victory on Wednesday, experts believe his presidency could have far-reaching impact on the revival of the region's oil economies while unnerving the markets short-term.
Trump's pledge to lift restrictions on $50 trillion of untapped energy resources such as shale energy and natural gas could potentially add to an already over-supplied market and have an adverse effect on prices, one analyst said.
In a swift reaction to the unexpected poll outcome, markets around the globe have tumbled with $3 trillion wiped off the value of stocks.
However, analysts, believing such market convulsions have only short-term impact, predicted a rebound of the greenback once the currency markets come to grips with the new reality.
While Dubai's market fell 0.84 per cent as almost all traded shares pulled back, Abu Dhabi's index was down 0.56 per cent as two-thirds of the traded shares dropped. Saudi Arabia's index pulled back 2.7 per cent in the first 10 minutes of trade as a little over nine-tenths of traded shares declined, but closed 0.8 per cent up. In Doha, nine-tenths of the top 20 most valuable shares pulled back, dragging the index down 0.1 per cent.
Professor Inderjeet Parmar, professor of international politics of city at the University of London, said Trump is unpredictable but he is also just one man - an office holder albeit the most powerful in the world.
He still has to get legislation past congress, and therefore by a hard-core conservative body that is bankrolled by corporations and who want to placate the markets.
"Long term, the US remains the most powerful, innovative, technologically and scientifically advanced economy in the world, so it will continue to improve and grow. But this shock will unnerve markets short-term."
By Isaac John
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