Business | Economy
Aabar and Emaar lead decline in UAE markets
UAE shares declined amid concern that the worst of the credit crisis in the US, the world's biggest economy, may not be over.
- Blooberg
- Published: 00:08 May 22, 2008
Dubai: UAE shares declined amid concern that the worst of the credit crisis in the US, the world's biggest economy, may not be over.
Aabar Energy dropped for a third day after the company's chief executive officer resigned following the completion of a unit sale. Emaar Properties, the Middle East's biggest developer, also fell.
The Abu Dhabi Securities Exchange General Index fell 0.6 per cent to 4,904.89, dropping for a fifth day. The Dubai Financial Market General Index lost 0.6 per cent.
"Liquidity has been hurt as investors closely watch the US markets and fear that more troubles there may affect us here especially since all our currencies are pegged to the dollar,'' Mohammad Dwaikat, a senior broker at Abu Dhabi-based Al-Fajer Securities, said.
US stocks fell on Tuesday, dragging down the Standard & Poor's 500 Index from a four-month high, as analysts forecast more credit losses, and faster inflation and record oil prices threatened to undermine profitability. The S&P 500 lost 0.9 per cent, its biggest drop since May 7.
Soaring oil
Soaring oil prices may cause an energy crisis that will eventually lead to a new world financial system based on multiple currencies instead of the US dollar, according to a Rice University study. All Gulf states except Kuwait have pegged their currencies to the dollar.
The dollar has weakened 11 per cent against both the euro and the yen since September 18, when the Federal Reserve started cutting interest rates.
About 116 million shares traded in Dubai's index today, almost 74 per cent less than the six-month daily average. In Abu Dhabi, volumes have fallen 32 per cent, compared with the six-month average.
Aabar declined 1.8 per cent to Dh3.36. David Woodward, CEO of the former oil and natural-gas explorer, resigned and will join Mubadala Development Co.
Aabar said it completed Tuesday the $833.3 million sale of its wholly owned exploration and production unit Pearl Energy to Mubadala Development, owned by the Government of Abu Dhabi.
Emaar retreated 1.3 per cent to Dh11.3. Arkan Building Materials Co dropped 3.4 per cent to Dh5.47. The stock has jumped 44 per cent so far this year.
Liquidity has been hurt as investors closely watch the US markets and fear that more troubles there may affect us here."
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