Dubai stocks tumble on Obama plan
Dubai stocks fell to a one-month low after most Gulf markets opened for the first time since a global sell-off last Friday, triggered by Barack Obama, the US president, and his bid to curb the financial risk-taking of banks in his country. The Dubai Financial Market General Index fell 5 per cent yesterday, the biggest drop among Gulf exchanges. That took its overall decline to 13 per cent since the start of the year.
Emaar Properties, the region's largest listed developer, declined 9.7 per cent to Dh2.97, its lowest in six weeks. Other property companies also recorded declines yesterday, with Union Properties and Deyaar Properties both falling by more than 7 per cent. Shuaa Capital, the UAE's largest investment bank, retreated 8.7 per cent while Arabtec, the country's biggest builder, lost 8.1 per cent. "Declines were expected today as there is a strong correlation between global equities and regional markets," said Wadah al Taha, a market analyst in Dubai. "In the absence of a local stimulant, I expect the markets to go down further."
The decline in Gulf markets comes ahead of several earnings releases and trading updates expected this week from major corporations. "We are expecting Emaar to release earnings on Thursday. If they come out with a good report, we will probably see an uptrend in the next week," Mr al Taha said. The Abu Dhabi Securities Exchange General Index retreated 1.4 per cent to a six-week low as the market fell for the fourth consecutive session.
Arkan Building Materials was the major loser of the day falling 9.4 per cent to Dh2.11. Aldar Properties retreated 7 per cent while Sorouh closed 6.6 per cent lower. RAK Properties, the third-largest Abu Dhabi-listed developer, ended the day 5.7 per cent lower. "The volumes were low and the sentiment was generally down last week and we expect the same trend to continue this week," said Ayman el Saheb, the head of operations at Darahem Financial Brokerage in Dubai.
Elsewhere in the region, Qatar's main measure declined 1.6 per cent, the Kuwait index declined 0.5 per cent, while the Muscat and Bahrain markets closed 0.6 per cent and 0.4 per cent lower, respectively. Saudi Arabia's Tadawul, the region's largest exchange, gained 0.1 per cent after falling 1.4 per cent on Saturday when banking and petrochemical stocks took a battering from Friday's slump on Wall Street.
The Standard & Poor's 500 Index on Friday lost the most since October on Mr Obama's plan to curtail the activities of banks. Beshr Bakheet, the chief executive of equities trading and investment at Bakheet Investment Group, said the recovery of regional markets would be closely linked to the health of US equities. "When it rains in the US, we have to open umbrellas here," Mr Bakheet said. @Email:firstname.lastname@example.org
Published: January 24, 2010 04:00 AM