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UAE indices drops to the lowest in one year

DUBAI — Leading UAE stock indices took a deep dive yesterday to hit their lowest during the past 12 months. While the Dubai Financial Market Index slipped 4.5 per cent to 588 points, the Abu Dhabi Index was down 2.3 per cent to 3843 points. The national benchmark NBAD General Index was down 2.5 per cent 12,902 points.

Both bourses reported across the board losses yesterday as NBAD's services sector subindex slipped 550 points. While the overall market turnover was down 17.6 per cent at Dh1.4 billion the total market capitalisation shrank more than Dh26 billion.

Share prices across the Arab region tumbled yesterday as investor confidence confidence suffered a set back from geopolitical tensions arising from West's nuclear standoff with Iran.

The main index on the Saudi bourse, the largest in the GCC, closed the morning 2.7 per cent down at 12,765 points, but had looked set for another record-breaking dive in early trading when it fell more than 7 per cent.

The region's other bourses also closed down. Qatar's main index fell 3 per cent as Bahrain's market, the least liquid in the Gulf, closed 1.46 per cent down, posting its biggest one-day fall since a mid-March slump.

In 11,300 deals Dubai Financial Market traded 145 million shares worth Dh1.3 billion. Leading services sector shares such as Amlak and Emaar came under heavy selling pressure yesterday. While Amlak fell more than 7 per cent, Emaar closed 4.2 per cent at Dh14.50. “Emaar and Amlak have been under selling pressure during the last week as the banks were demanding higher margins from speculators. A number of banks which were lending money to day traders have stopped funding completely,” said a broker.

The sudden stop of leverage in the market is expected further dampen the market.

Du, UAE's second telecom operator which listed its shares yesterday amidst huge investor demand also suffered in the market slide. The share opened Dh6.85 but slipped 13.25 per cent to close at Dh5.94. Leading services sector shares such as Mazaya Holding, Tabreed and National Real Estate Company fell in the range of 4 to 6 per cent yesterday.

In the banking sector, Commercial Bank of Dubai and Dubai Islamic Bank fell 4.7 per cent and 3.3 per cent respectively as Abu Dhabi listed banking sector shares reported across the board fall in prices. While UNB fell close to 9 per cent Abu Dhabi Islamic Bank and First Gulf Bank fell 3 per cent and 0.66 per cent each. In the services sector all leading real estate shares were headed south as Etisalat closed 1.6 per cent down at Dh17.60.