Another bad day for Dubai stocks

Dubai: The continued massive sell-off on the Dubai Financial Market on Wednesday erased one year's gains, forcing the index down 6.39 per cent to 1,533.36. The DFM year-to-day balance stood at minus 6.29 per cent at the closing.

Al Madina Investments and Dubai Investments were hardest hit, falling the maximum permitted ten per cent, followed by Dubai Islamic Bank, Arabtec, Aramex, Drake & Scull and the DFM stock itself, all down more than nine per cent.

Heavyweight Emaar lost 9.86 per cent amid the highest volume of any stock traded on Wednesday. Analysts say that most investors still are waiting for news of Dubai World's restructuring and withdrew their funds as a safety measure. Although the shares technically are at attractive lows, they are attracting almost no buyers.

One exception was Ajman Bank, which managed to rise 2.44 per cent to Dh0.84.

There is a widespread fear among investors that restructuring of Dubai's companies could be hampered by raising capital costs. Dubai World's investment unit Istithmar's failure to keep control of the W hotel in New York also did not help to restore confidence.

Financial and properties are usually the two most liquid sectors on the bourse, making it easy for investors to offload stocks.

Analysts say that there is no relief in sight for Dubai's stocks as long as there is no firm news about the way Dubai World will be restructured.

Abu Dhabi

The Abu Dhabi Securities Exchange (ADX) continued its slide on Wednesday with the general index falling another 2.82 per cent as investors booked profits amid high volatility and weakness.

The market breached the 2,500 support level, raising concerns that it would correct further in the absence of any update on Dubai World's debt restructuring talks with lenders.

The uncertainty has caused investors to dump stocks and exit the market despite strong fundamentals of the Abu Dhabi economy, say analysts.

All sub-indices declined except healthcare. The ADX general index closed at 2,467.04.

"On December 21, the creditors of Nakheel are scheduled to meet the company. The markets will continue to slide until we get more visibility on the matter," Rami Sidani, Head of Investments-Middle East and North Africa at Schroder Investment Management Limited, told Gulf News.

On Wednesday, 99.75 million shares were traded, compared with 108.66 million on Tuesday. The shares were worth a combined Dh201.50 million.

Of the 30 companies traded, only 3 rose, 26 fell and 1 remained unchanged. Julphar was the biggest gainer, ending 2.42 per cent higher at Dh1.69.

Abu Dhabi Ship Building was the main loser, falling 9.97 per cent to Dh2.80.

Aldar Properties was the most active by value, and DanaGas was the most active in terms of volume.