Emerging markets delay dampen spirits on UAE bourses

Market Wrap: UAE equities declined after Sorouh Real Estate reported a 42 per cent drop in profits for the first quarter. Shares of Sorouh declined 4 per cent.

UAE equities took a hit during trading after Abu Dhabi's second biggest developer reported a 42 per cent drop in earnings for the first quarter.

Sorouh Real Estate reported net profits of Dh76.3 million for the quarter, compared with Dh132 million in the same period last year, according to a filing on the Abu Dhabi bourse.

Revenues, however, increased to Dh452 million from Dh431 million. Shares were down 4 per cent to Dh1.42 at the close at 2pm.

"Sorouh's results were certainly below market expectations and so the weakness in the stock today is no surprise," said Matthew Wakeman, managing director for cash and equity linked trading at EFG Hermes in Dubai.

Other property stocks also fell, leading Abu Dhabi's benchmark lower. Aldar Properties, the emirate's biggest developer, lost 1.9 per cent to Dh1.53 a share. RAK Properties declined by 2.4 per cent to 40 fils. The Abu Dhabi Securities Exchange General Index lost 0.3 per cent to 2695.50 points.

The delay in the adoption of a new settlement system, a key requirement to be upgraded to emerging markets status by index bench-marker MSCI also dampened sentiment. The UAE is currently classified as a frontier market.

The deadline for enforcing the delivery versus payment was postponed to May 29. It was initially scheduled to commence today (Apr 28). "This doesn't close the door to the MSCI Emerging Markets Index entry, but it increases the uncertainty in investor's minds," Mr Wakeman said.

The Dubai Financial Market General Index was down 1.9 per cent to 1634.13.

Elsewhere in the region, Kuwait's index added 0.5 per cent to 6521.70. Bahrain's measure slipped by 0.1 per cent to 1404.90. Oman's benchmark added 0.2 per cent to 6335.49. Qatar's measure gained 0.6 per cent to 8548.30. The Saudi Tadawul All-Share Index was up 0.5 per cent to 6724.26.