Almost US$50 billion (Dh183.64bn) has been wiped off the value of Arab stock markets after just over a week of anti-government demonstrations in Egypt.
The economic impact of the unrest is hardly limited to stock prices, with gas drillers, advertisers and conference operators yesterday reporting lost business and conceding fears that more contracts will be cancelled if calm is not restored soon.
However, the ratings agency Fitch said that while investors were expected to be wary of the region for the near future, the political turmoil should not affect the ability of GCC companies to access debt markets.
The capitalisation of 13 Arab bourses has fallen from $991bn on January 25, when the mass protests against Hosni Mubarak's 30-year presidential rule began, to $942bn at the end of the month, according to the Kuwait asset manager Kamco.
Most of the decline came from Gulf stock markets, which dropped $32bn in value to $750bn. The Saudi bourse, the largest in the Arab world, fell by $21bn.
The Egyptian stock market lost $12bn in the first two days of the protests before it was closed, a report by Kamco said.
The exchange has been closed for six working days, but is expected to reopen on Monday, with trading initially confined to three hours a day.
The conflict in Egypt has led to volatility on the UAE's main exchanges, with Dubai falling 2.6 per cent in the past eight days and Abu Dhabi slipping 0.8 per cent. Both exchanges fell sharply in the early days of the protests, but pared their losses towards the end of the week.
Kamco said the losses were because of fears among investors that the protests in Egypt and, earlier, Tunisia could spread to other countries in the region and trigger a flight of capital.
But market analysts are not convinced that GCC markets should be seen as being on par with Egypt.
"Egypt is the eye of the storm, obviously, and heightened risk premium is not good," said Khaled Masri, the head of brokerage at Rasmala Investments in Dubai."[However] the GCC is not Egypt and is not Tunisia. There are some common social issues but they are certainly not the same."
Some Arab economies, including Algeria, Syria and Jordan, are at risk of feeling a "shock wave" from Egypt, said John Sfakianakis, the chief economist at Banque Saudi Fransi.
"We are at the first wave of what is happening," he said. "But in terms of contagion, I think that the Gulf is very well placed. It has deeper pockets and is sitting on huge foreign assets."
Two gas exploration projects were put on hold yesterday. At least one conference planned for Cairo was moved to Dubai instead.
In addition, advertising agencies said the industry was almost completely shut down in Egypt amid fears that spending would be affected in the wider region as a result.