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Negative sentiment drags markets

DUBAI - Gulf Arab bourses retreated on Thursday - four of them by more than 1 per cent - as negative sentiment sweeps the region on weakness in world stocks and investor uncertainty surrounding a UAE corruption crackdown.

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Dubai developer Emaar Properties dropped to a more than 40-month closing low, weighing on the index for a second trading day, while Abu Dhabi shares post their sharpest decline this week on banks and real estate shares.

Blue chips also drag on bourses in Muscat and Doha - the region's biggest gainers this year. "There is bad sentiment and this is affecting the markets," says Chahir Hosni, a sales manager at EFG-Hermes. "Foreign institutions are selling because all the global markets have not been performing well, and investors are pulling out of emerging market funds. As a result, they are decreasing their exposure," he said.

A series of financial scandals at major Dubai firms, including Tamweel, has also shaken investor confidence, traders said. Markets in Kuwait and Bahrain also closed lower. Saudi Arabia's bourse, the Arab world's largest, is closed on Thursday.

The index is likely to react on Saturday to news that Saudi Arabia would allow foreigners to buy Saudi-listed shares through licensed intermediaries, analysts said.

Dubai

The index fell for a second trading day, shedding 1.31 per cent to 4,891.15 points, its lowest close since October 22, 2007.Emaar Properties declined 2.29 per cent to Dh9.39 ($2.56), its worst finish since April 11, 2005, the early days of a stock market rally that took the stock to as high as Dh29.10 in September that year. Tamweel falls 2.86 per cent, extending declines this month to almost 25 per cent on an investigation into possible financial misconduct of two former executives, which the firm has said would not hit profits.

Abu Dhabi

The measure lost 2.02 percent to 4,455.43 points. First Gulf Bank dropped 4.85 per cent and Aldar Properties 3.85 per cent. Among the factors behind the retreat in UAE stocks is the performance of global markets, Hosni said. Global stocks and the US dollar fell on Thursday after concerns grew about the fate of U.S. mortgage firms and the health of the broader financial sector.

Oman

The index, the Gulf region's biggest gainer this year with a near 18 per cent rise to Wednesday's close, fell 1.74 per cent to 10,467.02 points.The index had rallied 11.7 per cent in the last seven trading days after a sell-off took it to a six-month low earlier in the month.

Shares of Oman Telecommunications Co fell 1.7 per cent to 2.185 rials ($5.68) after the firm said the government had yet to decide on a share price for the sale of its 25 percent stake in the firm. The stock had jumped more than 16 per cent since August 12 on market expectations the government would sell the stake at a premium, possibly 3 rials, brokers have said.

Qatar

The Doha benchmark dropped 2.01 per cent to 10,878.93 points, its second day of declines. Industries Qatar fell 2.67 per cent and Qatar National Bank 1.71 per cent.

Kuwait

Kuwait's measure, which has closed higher in all but one of the last five trading days, declined 0.57 per cent to 14,588.10 points. National Bank of Kuwait lost 1.1 per cent and National Industries Group 5.08 per cent.

Bahrain

The index shed 0.65 per cent to 2,693.54 points. Banks paced the fall, with Ahli United Bank easing 1.69 per cent and Gulf Finance House 2.38 per cent.