Markets down on corruption probes

DUBAI - The ongoing police investigation over allegations of corruption in Dubai companies, some owned by the government, prompted shares losses led by property firms, as speculation is ripe that there may be more probes.

By A Staff Reporter (UAE STOCK Markets)

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Published: Fri 22 Aug 2008, 11:47 PM

Last updated: Sun 5 Apr 2015, 11:55 AM

The Dubai Financial Market (DFM) fell 1.3 per cent to close at 4,891.15 on Thursday, with shares value amounting to Dh807.1 million, while the Abu Dhabi Securities Market (ADX) General Index dropped over two per cent at 4,455.43 points.

The real-estate sector plunged 2.5 per cent, or 247.24 points, to close at 9,737.52 in the Dubai trading, with UAE's giant mortgage provider Tamweel sinking to its lowest this year despite denying it is being investigated by Dubai police over alleged corruption.

Shares of Tamweel plunged 2.9 per cent to Dh5.78 on DFM, trading at least 5.9 million shares valued at Dh33.9 million. It said in a statement to the bourse that the government investigation on alleged corruption is limited to its two former employees, who allegedly embezzled from the company.

Another giant mortgage provider, Amlak Finance, also suffered a huge loss with a slide of 3.3 per cent to Dh3.82 while Islamic Arab Insurance, the world's biggest Islamic insurer, slumped 3.8 per cent to Dh2.26.

On Thursday reports said four officials of real-estate developer Sama Dubai, a part of the government-owned Dubai Holding, have been arrested by the police and are being investigated over allegations of corruption and mistrust. A company spokesperson could neither confirm nor deny the reports saying its executive chairman could not be contacted.

Union Properties, the Dubai-based real-estate developer that's building F1-themed parks, plummeted 3.7 per cent to Dh4.16 while bellwether Emaar Properties declined 2.3 per cent to Dh9.39 and Deyaar Development, Dubai's third-largest real-estate company by market value, slipped 2.1 per cent to Dh1.90.

Analysts have been noting a general lack of confidence in the property sectors as investors think the crackdown may widen. But they welcomed the government's announcement to probe into corruption, saying this would benefit the economy in the long run.

Tamweel, Deyaar, Dubai Islamic Bank and Nakheel, another government-owned developer, have either current or former employees also under investigation over alleged fraudulent financial acts.

Aldar Properties, Abu Dhabi's largest real-estate developer by market value, decreased 3.9 per cent to Dh10 on ADX while Sorouh Real Estate Co lost for a third day with a drop of 4.6 per cent to Dh7.43.

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