UAE Shares Fall; DFM Down 2.76pc

DUBAI — UAE shares fell on Tuesday, dragged by property and banking stocks with anxious investors expecting poor fourth quarter company earnings.

By Rocel Felix

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Published: Thu 15 Jan 2009, 1:00 AM

Last updated: Sun 5 Apr 2015, 9:36 PM

The Dubai Financial Market Index lost 2.76 per cent to 1,708.53, weighed by property issues which slipped 4.86 per cent.

Abu Dhabi’s benchmark index shed 1.2 per cent to 2,484.60, with real estate stocks falling 4.1 per cent, while banks edged down 1.03 per cent.

“All the negative news have been factored in, investors are now awaiting earnings reports and they expect it to be very bad. From all indications, the results will be anything but positive,” said Vyas Jayabhanu at Al Dhafra Financial Brokerage.

Listed companies are expected to start releasing fourth quarter results and guidance statements on January 15. Analysts expect results to reflect the impact of the worldwide credit crisis and the recession gripping global economies.

“The resilience we saw in the UAE markets over the last few days evaporated on the back of global sentiment on earnings,” said Matthew Wakeman, managing director of cash and equity linked trading at EFG-Hermes.

Adding to weak sentiment was a report by Colliers International which showed Dubai house prices declined 8 per cent in the fourth quarter as tight credit and the global downturn curbing demand.

The fourth quarter decline snapped strong price surges in the first three quarters that saw house prices jumping 64 per cent. Colliers said apartment prices in the last quarter fell 11 per cent, villas, 3 per cent, but townhouse prices rose 1 per cent.

Emaar Properties, the Middle East’s largest property developer gave up 4.83 per cent to Dh2.36, still reeling from its more than 80 per cent drop in 2008.

Most Dubai developers suffered from liquidity drying up especially in the fourth quarter, when banks tightened rules on lending, forcing them to cut jobs and delay projects as the economy braces for a slowdown this year.

UAE’s largest construction firm Arabtec Holding slipped 8.91 per cent after HSBC cut the stock’s price target to Dh2.4 from Dh7.5. Arabtec shares have been declining since the recent cancellation of a $1.3 billion racecourse contract with Dubai’s Meydan LLC.

“The consensus on Arabtec appears to be shifting from a base case to a bear case scenario. Assumptions are changing in the market place since the Meydan project was cancelled as to what is considered a safe project — for which Arabtec will get paid fully — and what isn’t considered safe,”said Ali Khan, executive director of Arqaam Capital.

Among banks, Emirates NBD lost 4.01 per cent to Dh3.59, while the Dubai Islamic Bank edged down 3.03 per cent to Dh1.92. In Abu Dhabi, property stocks lost 4.1 per cent. Sorouh Real Estate, the emirates second biggest property firm sank 5.96 per cent to Dh3.33.

Top-ranked Aldar Properties gave up 2.59 per cent to Dh4.0.

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