Sitting in the office is so yesterdayMay 27, 2015 4:49
Dubai stocks plunge to 14-month low
Concerns over the viability of Dubai Holding, owned by the emirate’s ruler, prompted investors Sunday to dump equities in a mass sell-off.
June 7, 2010 10:00 by Rasha Reslan
Dubai’s index fell to a 14-month low on Sunday as worries over the financial health of Dubai Holding, owned by the emirate’s ruler, and an end-of-week sell-off in global equities pushed Middle East investors to the exit.
Other regional markets also declined, with the latest worries in the euro-zone increasing risk aversion.
Dubai fell 1.8 percent to 1,513 points – its lowest close since March 18, 2009. The Abu Dhabi index fell 1.3 percent to 2,538 points.
“There are jitters about Dubai Holding rolling over some of its debt and although officials say it won’t need to restructure debts there have been various articles saying this could still happen,” said Zahed Chowdhury of Al-Mal Capital. “This is causing uncertainty.”
On Tuesday, Dubai Holding’s main unit said it may resort to asset sales to deal with its debt after posting a $6.2 billion loss for 2009, while in late May, investment arm Dubai International Capital asked for a three-month delay on debt repayment.
Emaar Properties and fellow developer Deyaar dropped 3.1 and 1.5 percent respectively.
On Thursday, Credit Suisse issued a report saying Dubai residential property prices could fall another 15 percent to 20 percent as oversupply peaks in 2011.
The Kuwaiti index dropped 0.4 percent to 6,709 points.
Saudi Basic Industries Corp. (SABIC) fell 1.5 percent, declining for a fourth day on worries a debt crisis in the euro zone would harm a global economic recovery and, with it, demand for petrochemical products.
Saudi Arabia’s Tadawul All-Share Index (TASI) slipped 0.05 percent, taking its losses to 14.5 percent since April 26’s 18-month high. The index closed at 5,924.59 points. On the sector front, 7 sectors saw negative closes, whereas 8 sectors managed to close with gains. Declining sectors ranged from a loss of 0.10 percent in the Banks & Financial Services sector, to a loss of 1.85 percent in the Insurance sector. Gains on the other hand ranged from 0.04 percent in the Real Estate Development sector, to a gain of 2.49 percent in the Energy & Utilities sector. Overall market breadth is still negative, with 56 advancers and 63 decliners recording an AD ratio of 0.89, the Financial Transaction House (FTH) said in its daily market commentary.
Saudi Electricity Co. shares rose 3 percent, gaining for a second day since saying it would raise tariffs for government, commercial and industrial users as of July 1.
In Egypt, CIB dropped 3.9 percent and Orascom Telecom declined 5.7 percent. The pair are typically among the top picks for foreign funds, implying overseas investors were easing back on Cairo stocks. The Egypt index dipped 2.3 percent to 6,367 points.
“The de-risking on global and emerging markets in May is continuing this month, but at a slower pace,” added Chowdhury.
Oman insurance stocks declined after a cyclone ravaged the country last week, killing 16 people, while other shares also dipped, tracking losses on regional and global markets as Muscat’s index slumped to a 2010 low.
Oman United Insurance Co. fell 5.6 percent and Dhofar Insurance dropped 1.2 percent. The Omani index fell 0.9 percent to 6,140 points.
The Qatari index slipped 0.4 percent to 6,774 points.