Souk Al-Manakh stock market crash
Type | Stock exchange |
---|---|
Location | Kuwait City, Kuwait |
The Souk Al-Manakh stock market crash was the 1982
Background
The large oil revenues of the 1970s left many private individuals with substantial funds at their disposal. These funds prompted a
By 1979, the year Souk Al-Manakh was established, Kuwait already had a robust financial sector and more stocks than any other Gulf country. However, due to the crash that happened in 1977 and the followed strict regulations for enlisting and trading companies, some Kuwaiti businessmen went to founding companies in nearby Gulf countries and enlist them on this new non-official market. After a couple of years, this lucrative unregulated market attracted many investors and had 70 enlisted companies, including around 40 companies based in other Gulf countries. The next year, the market capitalization of all shares jumped in a few months from $5 billion to $100 billion.[2]
Crash
Share dealings using
The crash prompted a recession that rippled through society as individual families were disrupted by the investment risks of particular members made on family credit. The debts from the crash left all but one bank in Kuwait technically insolvent, held up only by support from the Central Bank. Only the National Bank of Kuwait, the largest commercial bank, survived the crisis intact. In the end, the government stepped in, devising a complicated set of policies, embodied in the Difficult Credit Facilities Resettlement Program. The implementation of the program was still incomplete in 1990 when the Iraqi invasion changed the entire financial picture.
Effects
Coupled with reduced
Popular culture
The crash was depicted in the 1983 play Fursan Al-Manakh (The Knights of Al-Manakh) starring Abdulhussain Abdulredha.[5]
Citations
- ^ "Kuwait's Souk al-Manakh Stock Bubble". GulfTa Forum. 2007-02-24. Archived from the original on 2011-07-11. Retrieved 2008-09-15.
- ISSN 2764-4170.
- ^ "A Very Special Recession". Time. 1983-11-28. Archived from the original on November 13, 2007. Retrieved 2008-09-15.
- ^ "Kuwait Losses Affect Bahrain". The New York Times. 1983-04-10. Retrieved 2008-09-15.
- ^ "عبدالحسين عبدالرضا... فارسٌ سيفه الفن" (in Arabic). 2022-09-06. Retrieved 2022-09-06.
General and cited references
- Library of Congress Country Studies - Kuwait
- A detailed description of the Kuwait stock market crash from stock-market-crash.net
- Darwiche, Fadwa Adel (1986). The Gulf Stock Exchange Crash: The Rise and Fall of the Souq Al-Manakh. London: Croom Helm. OCLC 13423627.