Real estate bogs down UAE markets

Dubai: UAE markets continued to slide for the third consecutive session this week, dragged down by real estate stocks as investors continue to be extremely jittery over the sector's future amid the prevailing bearish sentiment on the overall economy.

"Investors are putting pressure on some of the real estate and banking sectors, especially these two, because there is speculation that may be more bad news will come in the fourth quarter affecting the prices further," said Sherif Abdul Khalek, manager, institutional accounts, Beltone Financial Securities.

Also, he said, with global recession and negative sentiments, fund managers are liquidating their positions - this is unlike the usual trend when they buy at the end of the year - to have some cash at the beginning of the year.

Blue chip stocks

The Dubai Financial Market benchmark dropped to 1,693.74, down 2.22 per cent, taking the three-day decline to 11.71 per cent.

Except for Dubai Financial Market company, which gained 3.54 per cent to end at Dh1.17, all blue chip stocks retreated.

Emaar Properties closed 3.6 per cent lower at Dh2.41; Arabtec, the construction company building the world's tallest tower, led the list of losers, plunging 9.93 per cent to Dh3.81; and Union Properties lost 3.45 per cent to close at Dh0.84.

Emirates NBD fell 3.79 per cent to Dh3.05; Air Arabia slid 4.30 per cent to Dh0.89; Shuaa Capital shed 4.85 per cent to end at Dh0.98 and Dubai Islamic Bank sank 5.70 per cent to Dh1.82.

Dar Takaful was an exception, surging 12.62 per cent to end at Dh1.16.

Abu Dhabi shares fell more sharply than Dubai, closing 3.69 per cent lower to 2,409.94.

Aldar Properties lost 6.41 per cent to Dh3.94; Sorouh Real Estate declined 4.17 per cent to Dh2.76; and Rak Properties fell 3.45 per cent to Dh0.56.

Banks and finance stocks also faced substantial selling pressure with 11 of 17 declining. None gained. National Bank of Abu Dhabi lost 4.28 per cent to end at Dh8.50 and ADCB tumbled 8.33 per cent to Dh1.65.

Kuwait City (Bloomberg) Kuwaiti shares rose for the first time in six days, led by financial companies, on speculation the government will start pumping funds into the market tomorrow.

Kuwait Finance House KSC climbed the most in more than a month. Al Rai reported Kuwait Investment Authority transferred funds to start purchasing shares tomorrow.

National Bank of Kuwait gained for the first time in eight days. The lender got approval to buy as much as 40 per cent of Boubyan Bank KSC.

Opportunity

The Kuwait Stock Exchange Index advanced 2.8 per cent to 8,438.8 at the close, trimming the drop for the year to 33 per cent.

"There are some reports saying that the government will begin purchasing shares from tomorrow," Faisal Hasan, head of research at Global Investment House KSCC, said in an interview from Kuwait.

"Investors are taking this as an opportunity to buy financial shares which have seen a massive sell-off in recent days."

Kuwait's cabinet last month agreed to a request from the central bank to start an "urgent investment portfolio" to shore up the local stock market, the state news agency KUNA reported.

The government's portfolio will have as much as 700 million dinars (Dh9.17 billion) for the first phase of the stock purchase, according to Al Rai's report yesterday.

Kuwait Finance House, the country's biggest Islamic bank, rose 6.8 per cent, the most since November 20, to 1,580 fils.

National Bank of Kuwait climbed 8.3 per cent to 1,300 fils. The country's biggest lender received approval from the Central Bank of Kuwait to acquire as much as 40 per cent of its smaller competitor Boubyan Bank. Boubyan shares climbed 7.3 per cent to 370 fils.

Elsewhere in the Gulf, Oman's Muscat Securities Market 30 Index lost 3.8 per cent to 5,563.01, the lowest close since April 2007. Saudi Arabia's Tadawul dropped to 4,743.89.