One of the main reasons for the sharp fall is the reduction in bank lending, which forced many investors to sell shares to raise much-needed funds.

But it was compounded by the trading strategies adopted by many investors, of buying shares only when the market is rising and selling when it falls. In this way, the financial turmoil has served to highlight the lack of sophistication in GCC markets.

There are some signs of life, particularly in the debt markets, with more than $15bn worth of bonds issued in the Gulf over the past three months. Given the continued shortage of bank lending, raising money through debt capital markets has become increasingly attractive for companies.

There are fewer reasons for optimism in the equity markets, however, where nervous retail investors dominate.

If Gulf stock markets are to stage a long-term recovery, they will need to persuade more companies that the extra scrutiny that comes with being listed is a price worth paying for access to investors, and attract more sophisticated institutional investors.

List of Special Report articles:

• Stock market development plans on hold

• Riyadh targets foreign investors

• Sovereign debt revitalises market

• Cairo bourse shows signs of life