Dubai stock market index plunges to 18-month low

Abu Dhabi: The UAE's stock markets continued to slide for the second consecutive day, bringing Dubai's benchmark index below the 450 mark yesterday. It closed at 435.58 points, 1.5 per cent lower than the previous closing, accumulating a loss of 4.2 per cent of its value in two days.

"The index has not fallen so low in more than 18 months, and there is a real threat of a major sell-off if it further declines below 430," a Dubai-based analyst said.

Following Emaar's slow response to the Securities and Commodities Authority's (Esca) request to specify the percentage of share buyback, "investors seem to have lost interest in maintaining their positions. Some of them have switched to Abu Dhabi market," he added.

Dubai's market turnover is still at record lows, with Dh417 million stocks traded yesterday, indicating that liquidation is the major trend.

Abdullah Al Turreifi, Esca's executive director, told Gulf News yesterday, "We are processing buyback applications at full speed."

"Ten per cent of Emaar's stock amounts to 600 million shares, or more than Dh6 billion, according to the present market value. Such a transaction will have a tremendous effect on the market and the company. However, Emaar is expected to pursue gradually, given the heavy burden of acquiring 600 million shares in one move," said Ziad Al Dabbas, financial analyst at the National Bank of Abu Dhabi.

A company spokesman said, "Emaar is still in discussions with Esca, and things are moving forward."