UAE bourses fell on Wednesda as investors exited their positions in Emaar Properties ahead of the stock's upcoming ex-dividend date, and the impact of a reweighting of the constituents of the MSCI emerging markets index was felt.
The Abu Dhabi Securities Exchange General Index closed 0.8 per cent down, while the Dubai Financial Market General Index ended 2.5 per cent lower. Emaar fell 5.2 per cent, with 53 million shares traded – significantly above the 50-week average of around 22 million shares.
“Because you can trade Emaar up until the 30th [of November] and still be eligible for the dividend, some people may have thought that, if Emaar doesn’t go up before ex-dividend, then there’s no holding the stock,” said Sanyalaksna Manibhandhu, a senior equities analyst at the National Bank of Abu Dhabi.
The price should, in theory, fall by around Dh1.2 when the share goes ex-dividend, he said.
Every six months, the MSCI Emerging Markets index is rebalanced, meaning that the weight of its constituent shares is changed.
Passive investors tracking the index change their holdings of listed shares, boosting some and lowering others.
“There were some buyers who bought shares significantly before the rebalancing, and who were taking profit yesterday [Wednesday] and on Tuesday,” said Mr Manibhandhu.
The Saudi Tadawul closed 1.6 per cent down, after Opec, which is due to meet in Vienna on Thursday, said it would not cut oil production.
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