Billions of dirhams were wiped off the value of Dubai shares yesterday, as stock markets across the Arabian Gulf lost US$58 billion on a day of calamitous trading.
The sharp sell-offs came in the wake of sliding oil prices and a global equity rout on Friday, spurred by fears of a slowdown in China’s economic expansion, a key engine of global growth.
Dubai's stock market led losses in the Middle East yesterday. The Dubai Financial Market General Index fell as much as 7.2 per cent on the day, before closing down 6.9 per cent at 3,451.48, its lowest level since the end of March.
“There’s been absolutely no discrimination, it’s red across the board,” said Sebastien Henin of the National Investor in Abu Dhabi. “Many stocks are back to their lowest level since December or January.”
Emaar Properties, the heaviest-weighted stock on Dubai's headline index, ended the day down 8.3 per cent at Dh6.18, its lowest level since December.
The market plunge in Dubai was closely mirrored in Saudi Arabia, where equities have suffered severe losses in the past month in the wake of plummeting oil prices.
The Tadawul All-Share Index endured its worst day of the year yesterday, closing down 6.8 per cent at 7,463.32, its lowest level since December.
That was also true for Abu Dhabi shares, with the Abu Dhabi Securities Exchange General Index closing down 5 per cent at 4,286.49.
In the United States, the Dow Jones Industrial Average suffered its biggest loss in four years on Friday, ending trade down 3.1 per cent, after China released data revealing that manufacturing activity this month shrank at its fastest pace since 2009.
Meanwhile, oil prices sank to their lowest level in more than six years on Friday, with Brent crude ending the day at US$45.46 a barrel.
"There's a realisation that the current period of lower oil prices is going to last longer than previously expected, and this has weighed on sentiment across the region," said Rami Sidani, the head of Middle East and North Africa equities at Schroder Investment Management in Dubai. "We're also seeing a devaluation of currencies across emerging markets, causing massive outflows, which has also impacted this region."
Mr Henin, however, suggested that stock prices might not fall much further, with investors keen to snap up regional blue chips at more competitive valuations.
“Some stocks have started to look attractive in the UAE, so there will be no surprise if we see some selective growth in the coming days,” he said.
Furthermore, Arabian Gulf companies were likely to be affected less by a slowdown in China’s economic growth than their international peers, he noted.
“The impact of China’s slowdown will be pretty limited for this part of the world outside of oil, which has already taken a hit,” said Mr Henin. “This region will continue to import from China and will now do so at a discount. Outside of oil we’re not a large exporter to China, so the impact for regional corporates will be more limited than for manufacturers in Europe and elsewhere.”
Mr Sidani said although blue-chip shares were now trading at attractive prices, it was too early to say when stock prices would finally stabilise.
“Gradually as the dust settles we will start to see prices based more on fundamentals, but there needs to be some stability of both oil prices on the global equity scene before we get to that point,” he said.
jeverington@thenational.ae
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Rooney's club record
At Everton Appearances: 77; Goals: 17
At Manchester United Appearances: 559; Goals: 253
Teachers' pay - what you need to know
Pay varies significantly depending on the school, its rating and the curriculum. Here's a rough guide as of January 2021:
- top end schools tend to pay Dh16,000-17,000 a month - plus a monthly housing allowance of up to Dh6,000. These tend to be British curriculum schools rated 'outstanding' or 'very good', followed by American schools
- average salary across curriculums and skill levels is about Dh10,000, recruiters say
- it is becoming more common for schools to provide accommodation, sometimes in an apartment block with other teachers, rather than hand teachers a cash housing allowance
- some strong performing schools have cut back on salaries since the pandemic began, sometimes offering Dh16,000 including the housing allowance, which reflects the slump in rental costs, and sheer demand for jobs
- maths and science teachers are most in demand and some schools will pay up to Dh3,000 more than other teachers in recognition of their technical skills
- at the other end of the market, teachers in some Indian schools, where fees are lower and competition among applicants is intense, can be paid as low as Dh3,000 per month
- in Indian schools, it has also become common for teachers to share residential accommodation, living in a block with colleagues
Our legal consultants
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Who was Alfred Nobel?
The Nobel Prize was created by wealthy Swedish chemist and entrepreneur Alfred Nobel.
- In his will he dictated that the bulk of his estate should be used to fund "prizes to those who, during the preceding year, have conferred the greatest benefit to humankind".
- Nobel is best known as the inventor of dynamite, but also wrote poetry and drama and could speak Russian, French, English and German by the age of 17. The five original prize categories reflect the interests closest to his heart.
- Nobel died in 1896 but it took until 1901, following a legal battle over his will, before the first prizes were awarded.
What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
Milestones on the road to union
1970
October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar.
December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.
1971
March 1: Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.
July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.
July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.
August 6: The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.
August 15: Bahrain becomes independent.
September 3: Qatar becomes independent.
November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.
November 29: At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.
November 30: Despite a power sharing agreement, Tehran takes full control of Abu Musa.
November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties
December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.
December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.
December 9: UAE joins the United Nations.
