Emaar Malls weighed on the Dubai Financial Market yesterday as reports circulated that the company was bidding against Amazon.com to buy the regional online retailer Souq.com.
Emaar Malls shares fell 0.78 per cent to close at Dh2.54 after news reports said the retailer was offering to pay US$800 million for Souq.com including a $500m convertible deposit.
“Investors will have been worried about two things with this deal,” said Sanyalak Manibhandu, the head of research at NBAD Securities. “Firstly the pricing – is Emaar Malls offering too much? And secondly the convertible deposit – that could dilute the shareholding.”
While Emaar Malls was the strongest drag on the DFM yesterday, the index as a whole closed up 0.2 per cent at 3,468.48.
Union Properties was one of the biggest gainers of the day, closing up 3.08 per cent at 97 fils after the Dubai developer’s board recommended an 8 per cent dividend.
Like many global markets, the DFM index had soared at the end of 2016 after the election of Donald Trump. But since February 8, when the index closed at 3,725.93, it has slumped 7 per cent.
“It is unusual for the markets to price in so many positives for so long,” Mr Manibhandu added. “Since the US healthcare bill was scrapped on Friday the bears out there will be saying: ‘If Trump can’t deliver on this bill then can he really deliver on anything?’”
The Abu Dhabi index closed down 0.67 per cent at 4,465.19. Bank and property stocks were the biggest losers as interest rate rises weighed on the minds of investors. FGB dropped 1.15 per cent to close at Dh12.85.
lbarnard@thenational.ae
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