By Julia Wheeler
BBC News, Dubai
Gulf stock exchanges are apt to exaggerate volatility felt elsewhere
Gulf stock markets are not immune to the global battering the current tornado of volatility has brought.
In Saudi Arabia, there has been a 45% drop in share values this year and it is the same story in the United Arab Emirates' commercial capital, Dubai.
It began with foreign investors pulling out. Local investors followed suit.
Across the region - including in Saudi Arabia where 90% of those investing in markets are estimated to be locals - the plummet has continued as investors became nervous, more risk averse and felt the need to deleverage.
"Cash is king," says Dr Mahdi Mattar, Chief Economist at Shuaa Capital, based in the high-rise, hi-tech, Dubai International Financial Centre.
"This is not just a slowdown in the US or Europe, it is one of the biggest financial crises we have seen," he said. "In those circumstances the world becomes flat. There are no island economies anymore."
The Gulf markets are risky and volatile at the best of times; now with global volatility so high, events on the markets are playing out exponentially in this region.
However, the fundamentals of the economy are solid, say the analysts.
The Gulf has an advantage over other emerging markets such as India or China in that its main export is oil - something that, despite recent massive jumps and falls is still trading above average prices.
Dubai is not expecting to taste the austerity many countries will experience
Certainly demand slows in times of global recession, but the oil price has a long way to fall before that becomes a big worry for Gulf governments.
These governments have a huge budget surplus. Indeed, the Gulf and the Middle East are being looked upon by others as a source of capital for the West.
If problems develop closer to home, these surpluses can act as a cushion domestically.
Economists here still see potential for growth in the region, despite the troubles in the global economy.
"We expect to see a slowdown in the GCC (Gulf Co-operation Council) next year, but there will still be a positive rate of growth for the Gulf into 2009," says Marios Maratheftis, Regional Head of Research at Standard Chartered Bank in Dubai.
"I'm talking of between 2% and 3% - certainly lower rates than there have been, but still very respectable growth."
In Dubai, there is also talk of a slowdown - a soft landing rather than a crash - from the huge property price increases of the past few years.
That, say the analysts, is a good thing given high levels of inflation as well as how frenetic things were this time last year in the property market.
Dubai is a city that has built a reputation on being able to put a positive spin on most things.
A survey released in conjunction with this week's Cityscape property exhibition (pitched as the largest business-to-business real estate show in the world) says Middle Eastern property markets are expected to outperform all other regions by a significant margin.
Take away the "Well, they would say that, wouldn't they" and actually, the economists believe, the Gulf is likely to be reasonably well insulated - although clearly not isolated - from the global situation.
That is certainly something many expatriate professionals are feeling as they watch what is happening in their home countries.
Those in the financial sector and elsewhere are expecting their numbers to swell as it becomes easier for the region to attract good quality human capital to the knowledge-based economies of Dubai, Abu Dhabi and Qatar.
Those who are already in the region feel happy to sit tight and weather the doom and gloom in the Arabian sunshine.
"In my industry, there are worse places to be at the moment than Dubai," said one British banker, who wishes to remain anonymous.