Business | Markets
UAE stocks crash to record lows
UAE stocks tumbled to new record lows yesterday, wiping more than Dh12.1 billion in market capitalisation, as foreigners, institutions and individuals continue to liquidate their positions.
- By Ahmed A. Elewa, Staff Reporter
- Published: 01:01 August 23, 2007
- Image Credit: Gulf News
- Emaar falls 3.47% to Dh9.75 as investors go on a selling spree.
Abu Dhabi: UAE stocks tumbled to new record lows yesterday, wiping more than Dh12.1 billion in market capitalisation, as foreigners, institutions and individuals continue to liquidate their positions.
The Emirates Securities general index plunged 2.15 per cent to 4,166.01, squeezing the recorded gains since the beginning of the year to 3.35 per cent.
Most analysts forecast a further decline as investors continue to sell.
"However, at a certain point, the prices will be extremely attractive to local investors, absent for the time-being due to the summer holidays," said Rami Sidani, senior associate partner at Shuaa Capital.
In Dubai, Emaar Properties continued to post heavy losses. It fell by 3.47 per cent to Dh9.75, as the company upset investors by postponing its share-swap deal with Dubai Holding for the fourth time since the partnership was announced more than four months ago.
"This represented a serious lack of transparency that negatively affected investor sentiment, and accordingly resulted in more sell-offs," Sidani said, referring to the Dh2.1 billion worth of losses in market capitalisation recorded by the company yesterday.
All leading shares recorded substantial losses, though the services sector was the worst performer falling by 0.88 per cent and accounting for Dh7.9 billion of the losses.
Dubai's general index plummeted below the 4,000 mark for the first time in almost a year, declining by 2.44 per cent to 3,968.09.
Meanwhile, Abu Dhabi's benchmark index fell by 1.95 per cent to 3327.86.
All the sectors ended the session in the red. Real estate companies incurred the heaviest losses with Sorouh Real Estate and Aldar Properties falling 4.18 and 5.06 per cent to Dh4.18 and Dh6 respectively.
Some analysts expect the downtrend to result in banks' margin calls, forcing individual investors to liquidate, hence dragging prices further down.
The banking sector lost more than Dh3 billion in market capitalisation, with the National Bank of Abu Dhabi falling by 3.2 per cent to Dh18.10 and Dubai Islamic Bank losing 2.98 per cent to close at Dh8.78. Both banks alone accounted for more than Dh1.85 billion of the sector's losses.
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