Property Stocks Drag Dubai to New One-month Low

DUBAI — Property stocks on Thursday dragged Dubai’s benchmark index to a fresh one-month low as investors resume selling after an initial rally, with Dubai’s debt problems pushing investors to exit the market despite positive international markets and stable oil prices.

By Muzaffar Rizvi

Published: Fri 15 Jan 2010, 11:45 PM

Last updated: Mon 6 Apr 2015, 10:24 AM

Union Properties PJSC, the Dubai-based developer, dropped to its lowest level in three weeks and closed at Dh0.66, reflecting a decline of 2.94 per cent. UAE’s largest property developer Emaar closed 0.85 per cent down at Dh3.52 per cent while construction firm Arabtec Holding fell 0.82 per cent at Dh2.41.

Dubai Financial Market’s general index closed 0.3 per cent down at 1,707.37 points, its lowest close since December 13. The share market continued its decline and dropped for a fifth consecutive day and lost 7.1 per cent during last week. Shares with a value of Dh375 million, or $102 million, traded yesterday on the Dubai Financial Market. That compares with a 50-day average of Dh648 million.

Drake & Scull International retreated for a fourth day as the chief financial officer resigned. Its shares lost 1.2 per cent and closed at Dh0.84, bringing the four-day decline to 7.7 per cent.

The Dubai-based construction company also said it won two contracts worth Dh182 million in Abu Dhabi. The shares gained as much as 3.5 per cent earlier.

In banking sector, Emirates NBD lost 1.44 per cent and closed at Dh2.73. Dubai Islamic Bank gained 1.38 per cent and finished the day at Dh2.20.

Abu Dhabi Securities Exchange also retreated yesterday and fell 0.24 per cent at 2,707.20 points. Aabar Investments and Aldar Properties closed at Dh2.35 and Dh4.61, respectively. National Bank of Abu Dhabi and First Gulf Bank fell 2.1 and three per cent, respectively.

“UAE markets are performing strangely,” said Amed Hamdi, senior relationship manager at Prime Emirates. “Most international markets are performing well, oil is looking good and the domestic economy isn’t bad, so people are probably waiting for more news about Dubai World debt restructuring. The uncertainty is overhanging the market.”

“A wait-and-see mode is prevailing among investors who are waiting to get more visibility on the Dubai debt-restructuring issue and fourth-quarter results,” said Rami Sidani, head of Middle East and North Africa investment at Schroder Investment Management Limited.

The Dubai and Abu Dhabi benchmarks made their largest declines for three weeks on Wednesday as a property-led sell off sent stocks tumbling, with the New Year feel-good factor a fading memory as investors once again focus on an uncertain corporate outlook.

“Real estate is getting hammered and there’s been heavy foreign selling in Emaar — the sector is not favoured by investors,” said Hamdi.

“I don’t think people are optimistic about the results after the numbers from Saudi Arabia were not encouraging — everyone is off-loading positions and waiting for the earnings season to start.” The fourth-quarter earnings season will start later this month in the UAE. Saudi Arabia’s banks’ quarterly profits have broadly missed forecasts.

In other regional markets, Oman’s MSM-30 Index slid 0.5 per cent to 6,547 points and Bahrain’s measure lost 0.3 per cent to 1,471 points. The Kuwait Stock Exchange Index added less than 0.04 per cent at 6,986 points and Qatar’s DSM-20 index rose 0.3 per cent to 6,885 points. Saudi Arabia’s exchange is closed for the weekend.


· With inputs from agencies

More news from Business