Business | Markets
UAE shares decline again led by property sector
UAE markets declined yesterday led by property stocks and financials as worries of poor results in the fourth quarter, just days away from being announced, continued to drive retail investor behaviour.
- By Gaurav Ghose, Financial Features Editor
- Published: 23:33 January 14, 2009
Dubai: UAE markets declined yesterday led by property stocks and financials as worries of poor results in the fourth quarter, just days away from being announced, continued to drive retail investor behaviour.
The Dubai Financial Market General Index fell for the second straight day this week, retreating by 10 points or 0.60 per cent to close at 1698.30.
"Most of the real estate and banking and financial companies will be definitely affected in the fourth quarter," said Tariq Qaqish, fund manager, asset management group, Al Mal Capital.
"We know that Qatar National Bank dropped more than 40 per cent quarter-over-quarter, and so it is expected that banks and real estate companies will be affected by the slowdown in the business. And banks and real estate weigh heavily on the index, and so it's going to affect the markets for a while."
Shares of Arabtec, UAE's largest construction firm, have plunged more than 18 per cent in the past two days, closing 9.78 per cent lower yesterday at Dh1.66. HSBC Holdings cut its recommendation of Arabtec to "neutral" from "overweight."
The termination of the Meydan racecourse contract could lead to a loss of Dh505 million for Arabtec, but it comprises only five per cent of its overall backlog, according to a note issued by investment bank Beltone Financial.
"The issue is significant, but more than that the investors are looking at the future when more cancellations are likely. The other issue is liquidity, which is important.
"The developers are squeezed by the liquidity. Also, it's a government project [racecourse] and it's not going to be the first one," Qaqish said.
Other losers included Emaar Properties, which slipped 0.85 per cent to Dh2.34; and Dubai Islamic Bank, which ended 2.60 per cent lower at Dh1.87
The Abu Dhabi benchmark retreated 1.18 per cent to close at 2455.18. The decline was led by Aldar Properties and Sorouh Real Estate.
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