Mixed day for UAE shares as Dubai benchmark falls

Dubai: UAE shares had a mixed day with the Dubai benchmark declining more than five per cent and Abu Dhabi index gaining more than one per cent after both the bourses had substantially jumped the day before.

Worries about Dubai's real estate sector and debt financing persist, with a Citigroup report saying that the emirate was the most "vulnerable" among the six Gulf countries to a global downturn.

Oil prices climbed above $55 (Dh183.7) but remain a concern for the Gulf region and Dubai, "booming on the oil surpluses" from neighbouring Gulf states and Russia, is most likely to be badly hit as a result.

"Dubai's two specific concerns are its real estate sector and how it will refinance the debt it has built up in recent years," Mustaq Khan wrote in the Citigroup report.

Moody's Investor Service had, in a note last month, said global slowdown would force Dubai to rely on Abu Dhabi to repay its debts.

Dragged by real estate stocks, which were the biggest gainers in Monday's eight per cent jump, the Dubai Financial Market General Index slipped 5.12 per cent to close at 2,033.14. Emaar Properties was one of the two top losers, tumbling 10 per cent to end at Dh2.97.

Other property developers which dropped were Deyaar Development, down 7.41 per cent and Union Properties, retreating 9.30 per cent.

Emirates NBD, UAE's largest bank in terms of assets, slumped for the ninth straight trading day, to close 3.61 per cent lower at Dh4.

'Negative sentiment'

"Today, there was profit booking, as expected, but the sentiments about the economy in general remain negative," said Sherif Abdul Khalek, manager, institutional accounts, Beltone Financial Securities.

"There is a lot of talk that there may be something wrong that is not known to the public."

Amro Diab, head of GCC institutional sales, EFG-Hermes, agreed. "Worries still persist about the real estate sector. Most of the major companies are related to the real estate and the market sentiment reflects that."

The Abu Dhabi Securities Exchnage Index closed 1.30 per cent higher at 2,883.78, extending its two-day gain to 4.60 per cent. The real estate index advanced 7.04 per cent.

"Rumour mills were agog that certain sovereign fund is providing liquidity to some of the select Abu Dhabi companies," said Vyas Jayabhanu, head of the Abu Dhabi-based Al Dhafra Brokerage.

Aldar Properties was up 7.56 per cent to close at Dh4.98), while Sorouh Real Estate climbed 6.46 per cent to Dh3.13.

- With additional inputs from Bloomberg