Stock markets battered

Dubai: Nearly Dh13 billion in value has been wiped off Dubai's benchmark stock exchange in the last three weeks amid calls for greater transparency and volatile world markets.

Local investors have witnessed a bloodbath since the Dubai Financial Market (DFM) General Index started its long descent in late April with blue chip companies feeling the brunt of the sell-off.

The DFM's market cap, when taking into account the 31 key members of the index, fell from Dh114.6 billion on April 24 to Dh101.7 billion at the close yesterday, shaving Dh12.9 billion off the value of Dubai's most prominent names.

"It is a sharp correction but to put things into context, the index is still up 8 per cent year-to-date. We are catching up with negative sentiment on a macro-level, but we are still in positive territory and the fundamentals in Dubai are improving," Anastasios Dalgiannakis, institutional trading manager at Mubasher Financial Services, said.

Huge losses

Arabtec is among the stocks suffering higher volatility in recent weeks, losing Dh900 million since April 24, after Aabar Investments built up a 21 per cent holding in the company via subsidiaries.

"It will be also important to see how the Securities and Commodities Authority treats developments surrounding Arabtec and whether they introduce rules to protect minorities including retail investors. Arabtec was the main driver of the index's rally in the first quarter but it has also contributed to the recent correction," Dalgiannakis added.

Emaar Properties lost Dh2.5 billion while DFM, the Arab world's only publicly listed stock market, is now worth Dh2 billion less than it was just three weeks ago. Du had Dh1.1 billion shaved off its stock and mashreq, which only traded in three sessions during the period, saw Dh2.6 billion worth of shares sold.

"The advent of euro area turmoil, particularly related to Greece's [potential] exit, is exerting a toll on international markets and in turn putting pressure on the region's capital markets," said Sulaiman Abu Al Hosn, assistant fund manager at Al Masah Capital.

Meanwhile, US stocks trimmed gains and the euro retreated yesterday on speculation that the European Central Bank has stopped funding operations for some Greek banks.

Earlier, stock markets plunged to new lows with the Sensex dropping below the psychological 16,000 barrier and the rupee plummeting along to historic low levels of 54.56 as the deepening Eurozone crisis drove investors to shift capital away. With the rupee sliding to record low levels, jittery foreign funds resorted to aggressive selling pulling down the key index below 16,000 level for the first time in a little more than four months. Though it managed to close at 16,030.09 — a drop of 298.16 points or 1.83 per cent — a whopping notional loss of Rs770 billion for investors — in a session in which 6 out of 10 stocks fell across the counters.