UAE stock markets dropped sharply to new lows this morning as Egypt's political fallout prompted investors to sell their positions and reduce exposure to risk.
The Dubai Financial Market (DFM) General Index fell 6.4 per cent to 1,507.99 points at 10.30 am in Dubai, the most since August and the Abu Dhabi Securities Exchange retreated 3.7 per cent to 2,559.85 points, the lowest since September.
Egypt's market has impacted the UAE more than Tunisia's because of its interest from foreign investors, partly due to its MSCI classification as an emerging market.
"Egypt's market is open to foreigners, who have big shares in the markets," said Amjad Bakir, trading manager at Wafa Financial Services.
"Wait till Saudi opens. I think we'll go down even further," he said.
The country's heavyweight stocks took the biggest hit.
Aldar Properties, the most traded stock in Abu Dhabi, dropped to the lowest on record as it fell 8.8 per cent to Dh1.65, and in Dubai, Emaar Properties, the country's biggest developer by market value, dropped to the lowest since July by 9.1 per cent to Dh3.08.
19 private jets carrying families of wealthy Egyptian and Arab businessmen have flown out of the capital, including the family of telecom mogul Naguib Sawiris, the executive chairman of Orascom Telecom, according to the Canadian Press.
Egypt's index closed 10.5 per cent down to 5,646.50 points on Friday after protestors defied the government's ban on demonstrations and took to the streets of Cairo.
Global markets also ended down on Friday, with the Dow Jones industrial average down 1.4 per cent, the Standard & Poor's 500 Index down 1.8 per cent. In Asia, the Hang Seng and the Nikkei 225 also fell 0.6 per cent and 1.1 per cent respectively.
