UAE stock markets reel from Dh29b loss

Dubai: UAE indices went tumbling on Sunday, as bearish sentiment and selling pressure from foreign funds continued. Weak regional and global markets also played their part.

The Dubai Financial Market General Index plunged 4.64 per cent to close at 4,471.71 and the Abu Dhabi Securities Exchange index slumped 3.74 per cent to end at 4,149.57.

The combined market loss was Dh28.77 billion. Since August 7, the total loss of market capitalisation has been Dh114.03 billion.

Bearing the brunt

Of the 29 stocks traded on DFM yesterday, 25 declined, three advanced and one ended flat, with the real estate sector bearing the brunt of the losses. Market capitalisation on DFM fell by Dh13.63 billion. Since August 7, the market has lost Dh54.54 billion.

"All the markets are weak and when the sentiment is negative, people see the bad news more than they see the good news," said Chahir Hosni, director of high networth sales, EFG-Hermes UAE Limited. "With the US market going down last week, taking Europe with it, and Saturday's more than five per cent fall in Saudi Arabia, it was expected that the UAE markets would fall today."

Given the continuous selling over the past two months, the market could now be described as "oversold without any fundamental reason", said P. Krishna Murthy, CEO of Dubai International Securities. "The reason for the market going down is the bearish mood. For the 12th week now, foreign investors are selling. So, when the dollar is strengthening and oil is moving up and down, they take a stand on exiting profitable positions. That is what they are doing now."

The real estate index on DFM fell 668 points or 7.3 per cent to close at 8,490. Emaar Properties, the largest Arab developer, dived 7.98 per cent to Dh8.07. The most liquid stock of the day, it traded shares worth Dh417.7 million or 39.5 per cent of the value traded on the market yesterday. It touched a low of Dh7.88.

It was no different on the Abu Dhabi Securities Exchange, with real estate stocks leading the decline. Of the 38 stocks traded, 35 retreated and three advanced. The market lost Dh15.13 billion on Sunday and since August 7, the loss has been Dh59.49 billion.

Have you invested in stocks in the recent past? Do you think the market is bottomed out at this point? Will you be willing to purchase stocks considering the dip in rates? Is this the right time to invest in stocks?Tell us at letter2editor@gulfnews.com or fil in the form bellow to send your comments.

The whole world is facing this problem - credit bubbles collapsing. In all other countries, a tightening of credit leads to house prices falls which in turn leads to a slowdown and recession. The UAE bubble is bigger than most. It will do more damage when it bursts. UAE shares over the next few months seem highly risky to me. The UAE should have diversified its economy more - but reliance on oil and real estate, and the high inflation that is forcing every other industry under will be its undoing. Further falls in the markets are to be expected as credit tightens, although I expect a sucker's rally along soon.
Paul
Dubai,UAE
Posted: September 08, 2008, 13:03

Recent ups/down of the DFM Market cost me huge loss, I lost nearly half of my money. I don't know where this market is going, but certainly it is a good time to buy. I am expecting a great chance of market recovery soon.
Hasan
Dubai,UAE
Posted: September 08, 2008, 09:19

Investing in stocks (other than Real Estate stocks) are good. Real estate shares will not recover in the near future as a big set back is expected soon.
K.K
Dubai,UAE
Posted: September 08, 2008, 08:38

It is a good time to buy shares from the market. It is a matter of time before they recover.
Roshan
Dubai,UAE
Posted: September 08, 2008, 08:04