Dubai Financial Market implements 5% limit down on prices of listed securities
An Emirati trader leaves an office at the Dubai Financial Market.- AP
Dubai - This step is in line with the decision of Sultan Bin Saeed Al Mansoori, Minister of Economy and Chairman of the Securities and Commodities Authority.
The Dubai Financial Market (DFM) on Tuesday announced that it is amending the downward limit cap of listed securities from 10 per cent to five per cent while the upward limit cap remains on its current level of 15 per cent.
In a statement, the DFM said new trading limits will be effective today and will continue until further notice.
"DFM always keeps a close eye on market developments and activity in order to take all the necessary actions to contain fluctuations, especially the recent fluctuations due to the Coronavirus," Essa Kazim, chairman of the DFM, said.
"Today's measure is a result of DFM and SCA's joint efforts to contain these fluctuations. The DFM will observe the implementation of the new fluctuation band to take any potential measures and amendments in line with the market circumstances," he said.
The Dubai Financial Market and Abu Dhabi Securities Index fell five per cent and 6.3 per cent, respectively. Emaar Properties hit 52-week low and closed below Dh2 a share on Tuesday, down nearly 10 per cent. The developer's shares are down 64 per cent its 52-week high of Dh5.53 per share. Its subsidiary Emaar Development also plummeted nearly 10 per cent to Dh2.26.
Other GCC equity markets closed mixed as Bahrain and Oman bourses ended in the red while the Kuwait and Saudi indexes ended the losing stream and rose one per cent and 2.5 per cent, respectively.
Global stock markets were volatile after a brutal sell-off that gave the US stock market its worst loss in over 30 years. Stocks opened broadly higher on Wall Street Tuesday, a day after plunging to their worst loss in more than three decades. The Dow industrials added 0.7 per cent.
European markets were lower and Asian markets ended mixed after a bumpy day. Australian shares closed 5.9 per cent higher to record the biggest daily percentage gain since October 2008. Bombay Stock Exchange stayed in positive territory most of the day but reversed all the gains in last hour of trading to close 2.6 per cent lower.
In Europe, the CAC 40 in Paris was down 0.8 per cent, Germany's DAX shed one per cent and Britain's FTSE 100 fell back one per cent.
The selloff on the US equity markets also sent oil prices tumbling on Tuesday. Brent fell 11.3 per cent to $31.41 a barrel while WTI was also down by nine per cent to $28.86. But the prices recovered later in the day.
Gold price was up $56.25, or 3.8 per cent, to $1,542 an ounce on Tuesday evening.