Emaar shares tumble as quarterly results disappoint investors

Markets Wrap: Dubai's benchmark stock index retreated the most in almost 11 months yesterday after quarterly profit for Emaar Properties missed estimates.

Dubai's benchmark stock index yesterday retreated the most in almost 11 months. Pawan Singh / The National

Dubai's benchmark stock index retreated the most in almost 11 months yesterday after quarterly profit for Emaar Properties missed estimates.

The developer of Burj Khalifa slumped 3.7 per cent.

As a result, the Dubai Financial Market (DFM) General Index retreated 2.1 per cent, the biggest decrease since March 7, to 1,848.28 at the close.

The Abu Dhabi Securities Exchange General Index was barely changed on the day, down 0.03 per cent with a close of 2,880.87.

Dubai's stocks had surged 16 per cent in January as investors believed Emaar's profit would improve amid a property recovery in the city.

"Recent gains were pricing in stellar fourth-quarter numbers and the reality was somewhat different so some profit-taking is evident," according to Julian Bruce, the Dubai-based head of institutional trading at EFG-Hermes Holding. "Looking ahead, volumes are lighter amid this weakness, so I see this more [as] a much-needed consolidation rather than any sort of turnaround in recent positive sentiment."

Emaar shares fell to 4.69 dirhams in their biggest drop since June 3. The stock had risen 46 per cent last year.

Egypt's EGX 30 Index rose 1.5 per cent, following a drop of 1.5 per cent last week when clashes between demonstrators and police left more than 50 people dead.

"The market is growing accustomed to the violence and the fact that the death toll wasn't high is enough as a positive signal for some investors," said Hassan Kenawi, equities trader at Cairo-based HC Brokerage.

The Saudi Tadawul All Share Index closed down 0.34 per cent at 7,033.30.

* Bloomberg News