Business | Markets

Slide continues on UAE bourses

Regional stock markets also finish lower as oil prices cast shadow on long-term plans.

  • By Gaurav Ghose, Financial Features Editor
  • Published: 00:04 November 24, 2008
  • Gulf News

  • Investors at the Dubai Financial Market are downcast as the benchmark index lost 4.73 per cent.
  • Image Credit: Ahmed Kutty/Gulf News

Dubai: UAE shares retreated on the first trading day of the week on Sunday as plunging oil prices continue to raise uneasy questions about current spending and development plans in the long term and their impact on the country's economy as a whole.

Crude oil settled at $49.93 a barrel on the New York Mercantile Exchange on November 21. Oil has slumped 66 per cent since reaching a record $147.27 a barrel on July 11.

Six years of high oil prices led the Gulf countries to diversify into infrastructure, tourism and real estate and now, with tumbling oil prices, governments of the region are bracing for lower revenue flows and a slowdown in different sectors.

Support levels

"The mood is just bearish and we have broken the support levels of 2000 and, with price of crude oil continuously falling, it does tend to affect investor sentiment," said Shiv Prakash, equity investment analyst at Mac Sharaf Securities.

"Lower revenues are likely to affect infrastructure developments, which will have an impact on the property and construction sectors."

The Dubai Financial Market (DFM) benchmark fell 4.73 per cent to 1,917.15 and the Abu Dhabi Securities Exchange (ADX) shed 1.26 per cent to close at 2,797.76.

Emaar Properties, the largest property developer in the region, declined 7.77 per cent to Dh2.73, its lowest close since August 2004. Aabar Investments dropped to its lowest since February 2007, closing down 7.44 per cent to Dh1.99.

Real estate and finance/-investment firms lost 7.55 per cent and 7.82 per cent respectively on the DFM.

Deyaar Development slid 6.58 per cent to Dh0.71 and Union Properties shed 6.48 per cent to Dh1.01.

du, the telecom company, tumbled 9.09 per cent to Dh2.60. Amlak Finance at Dh.02 and Tamweel at 0.99 closed unchanged after the UAE government intervened to merge them.

On ADX, some of the prominent losers included Aldar Properties, down 2.35 per cent to Dh4.99, Sorouh Real Estate, which slid 2.54 per cent to Dh3.07, Dana Gas, which declined 5.41 per cent to Dh0.70 and Abu Dhabi National Energy Co, also known as TAQA, which dropped 6.08 per cent to end at Dh1.39.

"I think there is much negative sentiment in the Gulf bourses because of the flurry of [bad] news from the international markets," said Faisal Hassan, head of economic research at Kuwait's Global Investment House. "There was also a contagion effect from the slump of the Saudi market" on Saturday, he said.

The Saudi Tadawul All-Shares Index (TASI), which dived 9.2 per cent on Saturday, slid another 3.8 per cent to 4,264.52 points, a near five-year low, despite the news of the Saudi Arabian Monetary Agency (SAMA) cutting the repurchase rate to 3.0 per cent.

The Kuwait Stock Exchange, the second largest Arab bourse, closed 0.75 per cent lower at 8,809.30 points despite a 1.1 per cent increase by the leading banking sector.

Doha Securities Market ended the day four per cent weaker at 5,575.81 points, a two-year low, while the Muscat Securities Market dropped 2.6 per cent. Bahrain Stock Exchange finished 0.85 per cent lower.

"I think we are near to the bottom, but stocks are likely to remain volatile for some more weeks," Hassan said.

- With inputs from agencies

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