Gulf shares too decline on recession worries

Dubai: Gulf shares declined for the first time in three days on concerns that the world's biggest economies may slip into a recession, curbing earnings in the region.

Arabtec Holding PJSC, the company building the world's tallest tower in Dubai, fell for the second time this week, as did Emaar Properties PJSC.

Emirates NBD PJSC and Abu Dhabi Islamic Bank PJSC dropped after a report by EFG-Hermes Holding SAE on the banks.

The Dubai Financial Market General Index lost 5.9 per cent to 3,484.91 at 11:15am local time. The measure surged 22 per cent in the previous two days. The Abu Dhabi Securities Exchange General Index declined 1.8 per cent and the Kuwait Stock Exchange Index dropped 1.3 per cent.

"The world's financial system probably has avoided a complete collapse, but the economies aren't out of the woods yet," Nadim Abou Jalad, a trader at Naeem Shares & Bonds in Dubai, said in a telephone interview on Wednesday. "The global downturn is going to affect our real-estate market and companies' profitability."

Asian stocks declined as concern earnings will deteriorate overshadowed a $2 trillion global bank rescue. BNP economists led by Paul Mortimer-Lee in London said falling US home prices are still threatening the global financial system, even after the US joined the UK, Germany and France in offering to buy stakes in banks.

Banks

In Qatar, the DSM 20 Index lost 3.7 per cent and the Bahrain All Share Index retreated 0.3 per cent. Oman's Muscat Securities Market 30 Index gained 0.2 per cent.

Arabtec declined 7.2 per cent to 8.5 dirhams. Emaar, the Middle East's largest real-estate developer, dropped 6.3 per cent to 6.35 dirhams.

Emirates NBD lost 4.9 per cent to 7.55 dirhams. The United Arab Emirates' biggest bank by assets has the largest holding among local banks of shares and bonds, which is a "concern," EFG-Hermes said in a report on Wednesday.

Abu Dhabi Islamic Bank retreated 1.7 per cent to 4.78 dirhams. The bank is likely to report the biggest loss among UAE banks from the fall in share and bond prices in the third quarter, EFG-Hermes wrote in Wednesday's report.