Dubai stocks lead Middle East slump as Qatar extends retreat on Fifa

Investors took advantage of a four-day rally to sell positions before the start of the Muslim holy month of Ramadan.

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Dubai stocks led declines across most Middle East equity markets as investors took advantage of a four-day rally to sell positions before the start of the Muslim holy month of Ramadan. Qatari shares fell for a third day.

The DFM General Index dropped 1.5 per cent to 3,971.86 at 11.31am in the emirate. Dubai developers and construction companies led the slide, as Emaar Properties lost the most since May 27. The DFM Real Estate Index sank 2.1 per cent, its biggest decline in a week. Qatar’s QE Index retreated 1.2 per cent.

“We are seeing some profit taking in Dubai this morning,” Ramez Merhi, a Dubai-based director for asset management at Al Masah Capital, which manages $500 million, said by email.

“With Ramadan on our doorstep and summer upon us we expect volumes to dry up while people partake in the holiday season.”

Ramadan, when Muslims fast from dawn to dusk and most employees in the six-nation GCC work reduced hours, starts next week. Trading volumes across the region typically decline, increasing volatility.

Shares of Amlak Finance, an Islamic mortgage provider that isn’t in Dubai’s benchmark index, rose 4 per cent to Dh1.39 in a third day of gains. The stock, which resumed trading last week after a six-and-a-half year suspension, has increased 36 per cent in the period.

Industries Qatar led declines in Doha as the QE Index dropped to 11,946.24. The benchmark gauge is poised to close below the 12,000 level for the second time since April as US and Swiss authorities continue to probe football’s governing body in investigations that include the awarding of the 2018 and 2022 World Cup’s to Russia and Qatar, respectively.

Qatar is spending about $200 billion on infrastructure in the run-up to hosting the world’s most-watched sporting event.

“There is still uncertainty with how the story will play out,” Mr Merhi said. Investors will “handicap Qatari stocks until the investigation is over,” he said.

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