Deyaar stock still weighs on DFM

Local markets were dragged down by a global sell-off yesterday on fears of slowing economic growth in China. Deyaar Development continued to be a drag on the Dubai bourse, dropping for the third consecutive session yesterday on large volumes that remain unexplained. With more than 147 million shares changing hands, Deyaar accounted for more than half of the day's total volume on the Dubai Financial Market (DFM). Analysts said they could not explain why the stock had suddenly attracted so much liquidity. Aabar, the Abu Dhabi Government-backed investment company fell 6 per cent as investors were kept waiting on news about the company's planned delisting.

Yesterday's 6.6 per cent decline, to 30.8 fils, effectively wiped out Deyaar's strong gains from last week. The company said yesterday its board had reviewed new developments regarding its projects and plans, without giving details. It also handed over management of the Skycourts project in Dubailand to the local company National Bonds, although neither move seems to justify such intense investor interest.

"There is probably some leak in the market. It is definitely not speculation as speculation doesn't happen on such high volumes," said Saud Masud, the head of research at the Swiss bank UBS. The DFM General Index retreated 2.2 per cent to 1,481.82. Emaar Properties declined 3.1 per cent to Dh3.10 while Arabtec Holding retreated 2.7 per cent to Dh1.77. The Abu Dhabi Securities Exchange General Index declined 0.8 per cent to 2,531.44, weighed down again by Aabar.

The investment company continued its losing streak, ending 6 per cent lower at Dh1.41. Aldar dropped 4 per cent to Dh2.86 and National Bank of Abu Dhabi declined 2.2 per cent to Dh10.95. Elsewhere, Qatar dropped 1 per cent, while the Muscat and Bahrain bourses declined 0.9 and 0.3 per cent, respectively. Kuwait advanced 0.4 per cent and Saudi shares closed down 2.65 per cent. [e-mail]