News of former Tamweel CEO's arrest drags Dubai index down

Dubai: Negative sentiments surrounding the news of the arrest of Tamweel's former chief executive led to the Dubai Financial Market index declining 0.57 per cent to 4,988.82.

Shares of Tamweel, the largest real estate finance provider in the UAE, fell 4.09 per cent on Sunday to Dh5.86, extending the losses to 9.80 per cent in the last two sessions. On Thursday, it declined 5.71 per cent to close at Dh6.11.

"In terms of investors and how they react to this kind of news, you can see it from what happened to the stock on Thursday and today," said Anne Marie Browne, foreign institutional sales, Al Futtaim HC Securities. "It obviously had a sudden impact regardless of the fact that the [second-quarter] results of the company were excellent. But invest-ors react to such news negatively and immediately."

Tamweel announced in late July that its second quarter profits had more than tripled to Dh210.95 million ($57.43) from the same period last year.

Looking ahead, Rami Sidani head of MENA Investments, Schroders Investment Management, said: "Accordingly the negative sentiment that is prevailing on the stock will soon evaporate once the overall sentiment in the market improves, and once you get more clarity on the issue. At the moment I see it as an opportunity to buy. The company's profitability will not be hampered in any way."

Dubai was quiet with low trading volumes of 127.25 million shares valued at Dh491.97million.

Other decliners included Emirates NBD, Ajman Bank and Dubai Financial Market, shedding 2.98 per cent, 0.34 per cent and 0.25 per cent respectively.

The real estate sector however managed to stay in the black yesterday, with Emaar Properties closing at Dh9.69, up 0.31 per cent. Deyaar also closed up 0.51 per cent to Dh1.96.

The Abu Dhabi index closed 0.02 per cent down at 4,533.83. Volumes were low, with 69.47 million shares traded worth Dh349.2 million.

Aldar gained 1.97 per cent to Dh10.35 while Sorouh fell 1.37 per cent to Dh7.91.