Abu Dhabi index falls for second day

Dubai: Abu Dhabi index fell for the second day, losing 1.07 per cent yesterday to close at 5,063.24.

Led by Abu Dhabi National Energy Company, Taqa, the state-controlled global energy investment company, which had the biggest one-day drop in two years, the energy sector tumbled 5.49 per cent.

Taqa, which announced this week the sale of $4.15 billion worth of bonds convertible to shares primarily to its shareholders, lost 9.79 per cent to close at Dh3.41. Dana Gas and Aabar Investments also dragged lower, declining 1.45 per cent and 0.26 per cent respectively.

"We don't really have any fundamental reason for it or any real underlying news," said Julian Bruce, director of institutional equity sales, EFG-Hermes. "If you take the other two companies - Aabar Investments, with the weakness elsewhere, that's a company where locals are taking some profits. And Dana Gas, there were a few jitters yesterday [Tuesday], because of the news that Iranians may divert the gas supply that was originally going to be coming to the Crescent, elsewhere within the domestic network."

With regard to Taqa, Bruce said that "it's possible further acquisitions which may weaken its cash position. It's also writing additional debt through the sukuk. There may be some concerns over its financing capabilities...other than that there's no specific cat-alyst".

The real estate and construction sectors also suffered losses, falling 1.50 per cent and 1.86 per cent respectively. Aldar Properties and Sorouh Real Estate declined 1.14 per cent and 2.02 per cent to end at Dh9.71and Dh13.05.

"Over the past week the real estate stocks have been performing well. But then there was broader market sell off yesterday and little bit of over spill because there is still profit to be taken out of it. Again, mainly local players because foreigners can't still access those stocks," Bruce added.

Dubai bounced back, edging up 0.66 per cent to close at 5,596.98. Emaar Properties and Emirates NBD led the advance, gaining 1.80 per cent and 2.13 per cent to close at Dh11.30 and Dh12.00 respectively. Dubai Islamic Bank continued its decline, losing 2.27 per cent to close at Dh8.18.