WRAPUP 1-Gulf states talk up markets, play down crisis

By Saleh al-Shaibany and Ulf Laessing

MUSCAT/KUWAIT, Oct 7 (Reuters) - Four Gulf states tried to lend verbal support to faltering stock markets on Tuesday, saying their financial institutions were sound despite the global credit crisis. Officials from Saudi Arabia, Kuwait, Qatar and Oman moved to reassure investors that the decline on regional markets was merely temporary and said their economies were strong.

The verbal interventions came as Middle East stock markets slumped to multi-year lows on Tuesday as speculation intensified that a five-year property boom in the region was over.

"The financial situation in the country is safe and sound and liquidity at banks is available and exceeds billions," Kuwaiti Deputy Prime Minister and Minister of State for Cabinet Affairs Faisal al-Hajji told state news agency KUNA.

Kuwait's commerce and industry minister Ahmad Baqer also spoke out, saying the market decline was due to global panic and urged companies to buy back shares to support the market.

Earlier, a Kuwait newspaper quoted the country's central bank governor, Sheikh Salem Abdul-Aziz al-Sabah, as saying that local banks were not affected at all by the crisis.

In Saudi Arabia, central bank economist Fadi Alajaji admitted the kingdom faced difficulty in managing liquidity but said Saudi banks were unlikely to go bankrupt or collapse. He also pinned the market retreat to a crisis of investor confidence.

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