Emaar share price dips below Dh10

Dubai: Shares of Emaar Properties sank below Dh10 on Wednesday morning for the first time since April 2005 after the company warned its US unit John Laing Homes (JLH) would take a hit in the third quarter from the mortgage market crisis in the United States.

The stock is down 2.28 per cent, having hit Dh9.77, its lowest since April 13, 2005.

JLH made up 16 per cent of Emaar's revenues in the second quarter. The slowing US housing market was one of the reasons the Dubai developer missed analysts' second-quarter profit forecasts.

That was before the crisis in US subprime mortgages -- loans made to less creditworthy individuals -- spilled into global credit markets in July, driving up borrowing costs and triggering a flight from risky assets.

Emaar bought John Laing for $1.05 billion in June 2006 as the US housing market was peaking after five years of expansion. With defaults on mortgages and a glut of new homes, housing construction in the US is sliding.