UAE stocks plunge as virus fears grow

Dubai: Indices on the Dubai and Abu Dhabi bourses slumped on Sunday, with investors in panic-mode as countries worldwide rolled out bans on big gatherings and stricter travel restrictions as the new coronavirus spread further.

The Dubai Financial Market (DFM) index dropped 4.5 per cent or 116.2 points to 2,473.82, while the Abu Dhabi Securities Exchange (ADX) fell 3.6 per cent or 177.61 points to 4,723.82.

Investor sentiment took a hit as governments in the Middle East over the weekend warned their citizens and residents against traveling to coronavirus-hit countries including Iran where hundreds have tested positive for the virus and 43 people have died from it.

More pressure

Analysts expected the selling pressure seen in the UAE markets to persist rest of the week, as global markets are widely expected to remain in the negative unless central banks intervene with interest rate cuts.

The central bank of the UAE on Saturday advised banks to reschedule loans and reduce fees and commissions as part of measures to mitigate the economic effects of the coronavirus outbreak.

The UAE is a regional business hub and major transit point for passengers travelling to China and other destinations in Asia. The country has reported 21 people infected with the coronavirus, five of whom have recovered.

Lenders lead losses

Shares in Dubai’s top lender Emirates NBD and real estate giant Emaar Properties, key indicators for region wide sentiment, sank 6.7 per cent and 5.1 per cent respectively. Budget carrier Air Arabia too was down over 7.1 per cent.

Emirates Group has seen a “measurable slowdown” in business from the coronavirus outbreak, Reuters reported, citing an internal document.

In Abu Dhabi, lenders drove declines with Abu Dhabi Commercial Bank (ADCB) shares down 5.6 per cent, Abu Dhabi Islamic Bank (ADIB) down 5.3 per cent and First Abu Dhabi Bank falling 4 per cent.

Other GCC indices hit

Among others hit, Kuwait’s bourse - trading after a three session break - plunged 11 per cent to its biggest ever fall in a single day.

The declines were led by a 14.5 per cent drop in National Bank of Kuwait and a 10 per cent slide in Kuwait Finance House. The bourse said it had suspended trading for rest of the day due to the steep decline.

Kuwait, which recorded 45 people infected with the coronavirus, called on its citizens to avoid travelling over concerns about the spread of the disease, a health ministry official said at a media conference on Saturday.

Elsewhere, Saudi Arabia’s Tadawul shed 3.6 per cent, with the country’s top lenders Al Rajhi Bank down 4.2 per cent and and National Commercial Bank down 3.1 per cent.

State-owned oil giant Saudi Aramco slipped 2.4 per cent to 32.55 riyals, hitting its lowest since it began trading on Dec. 11. It was still trading above its debut price of 32 riyals.

Qatar, which reported its first coronavirus case, was close for a public holiday.