Banking and financial stocks are on the retreat as Dubai-related conglomerates are again shaking investor confidence. Analysts say investors would like to close the door on the tumultuous past six months that have centred on Dubai World's restructuring and get back into financial stocks. But every news release of a distressed Dubai entity sends them back into retreat.
The lack of appetite for financial services stocks was evident from the decline of major banking stocks last week after the Dubai Holding Commercial Operations Group, an entity of Dubai Holding, reported a net loss of Dh23.5 billion (US$6.2bn) against a net profit of Dh10bn in 2008. Emirates NBD, the largest lender in the country by assets, ended last week 4.3 per cent down and dropped another 0.8 per cent to Dh2.66 yesterday in Dubai, where only two financial services stocks moved up on weak trading volume.
Dubai Islamic Bank, the largest Sharia-compliant lender in the country, closed down 2.8 per cent last week and dropped another 2.4 per cent to Dh2.03 yesterday. The bank is also facing the pressure of a legal battle in Bahrain against four businessmen. The losses were more pronounced last week in Abu Dhabi where the heavyweight First Gulf Bank ended the week with a 9.1 per cent decline. It dropped another 3 per cent yesterday to finish trade at Dh14.55.
National Bank of Abu Dhabi was down 5.6 per cent for the week and 1 per cent lower at Dh10 yesterday. Rounding out the group was Abu Dhabi Commercial, which lost 3.1 per cent to Dh1.57 yesterday after falling 4.7 per cent last week. None of the Abu Dhabi banking stocks advanced yesterday in Abu Dhabi. "All in all, I expect June to be a tough month for banks," said Saud Masud, a property analyst with UBS.
skhan@thenational.ae
