Dubai shares suffered their largest one-day loss in seven weeks as a global equity sell-off and negative property news sent the trademark index almost 6 per cent per cent lower, ending a gradual recovery in prices since late June. The Dubai Financial Market General Index ended down 5.8 per cent, while the Abu Dhabi Securities Exchange General Index lost 2.4 per cent and the rest of the Gulf's stock indexes finished the day lower.
"The market is getting its cues from the US and global markets," said Hashem Montasser, the head of regional asset management at EFG-Hermes. "This region is very much sentiment-driven and that sentiment is set abroad. It is a reaction to what is happening in the US [and] Asia, and the oil weakness." Negative sentiment from US consumer confidence figures released on Friday spread to Asia yesterday, sending markets broadly lower. European markets also traded lower.
Dubai property stocks were hardest hit by the sell-off after Dubai Holding announced a fresh round of restructuring on Sunday. That rekindled investors' fears over future financing. Dubai Holding said it would reorganise its companies into four units in response to the global downturn. Three of Dubai Holding's property units are slated to merge with Emaar, a deal that would dilute share value. Emaar closed 8.8 per cent lower at Dh2.92.
Investors also continued to reel from a Dh228m second-quarter loss at Union Properties. Since announcing the loss on Thursday, the developer has lost 18 per cent. Sorouh Real Estate fell 7.8 per cent. Analysts and economists say the current correction could be more than just a blip. "I suspect we could see some real corrections from here on. The size of them will depend on how much fresh liquidity comes in. If there is enough, it could be a mild correction, if not, markets could give more than they took in recent months," Mr Montasser said.
Qatar's stock market closed 2.2 per cent lower, Saudi Arabia's Tadawul Index ended down 2.5 per cent lower while Egypt's index fell 3.5 per cent. uharnischfeger@thenational.ae
