Concern at China rate rise

Shares in Dubai gained during the first half of yesterday's trading session only to reverse the trend later as concerns over China's interest rate increase scared off investors.

Some investors believe China's rate rise will not be enough to slow inflation. The People's Bank of China (PBC) unexpectedly raised its one-year lending rate over the weekend to 5.81 per cent from 5.56 per cent, the second increase in three months.

"A weak Asia will have a knock-on effect," said Julian Bruce, the director of equity sales at EFG-Hermes in Dubai. The Dubai Financial Market General Index closed flat at 1,603.36. The Abu Dhabi Securities Exchange General Index gained 0.3 per cent to close at 2,702.67.

Arabtec Holding closed 0.5 per cent lower to Dh1.91. Deyaar Development lost 0.3 per cent to 30 fils a share and Union Properties dropped 1.9 per cent to 36 fils a share.

"We have a severe case of apathy by institutional investors, both western and domestic," said Mr Bruce. "There is no real momentum because clients have already closed their books."

Aldar Properties added 1.8 per cent to Dh2.26 a share, while Dana Gas lost 1.3 per cent to 73 fils and First Gulf Bank gained 1.9 per cent to Dh18.70 a share.

Elsewhere in the region: Kuwait's measure gained 0.3 per cent to 6,939.30; Bahrain's index added 0.1 per cent to 1,427.73; Oman's main measure rose to 6,753.62; Qatar's QE Index lost 0.8 per cent to 8,645.65; and the Saudi Tadawul All-Share Index gained 0.4 per cent to 6,612.86.