Panic selling grips investors as DFM falls

Abu Dhabi: A major sell-off of shares in construction giant Emaar sparked panic on the Dubai Financial Market (DFM) on Wednesday, dragging the index to its lowest level since mid-August.

The market lost 2.22 per cent as it sank to 408.25.

In market capitalisation terms, the market value of the listed shares lost Dh2.8 billion.

Emaar lost 2.17 per cent as it fell to Dh13.55 in a flurry of selling towards the end of the session, while Tabreed, considered a market indicator by many analysts, lost 2.32 per cent to close at Dh2.95.

"It seems that the index is heading back towards the 400 points mark. Hopefully it's not yet another freefall," said Ahmad Abdul Rahman, an analyst at Amanah Capital.

Only Shuaa Capital ended in the black, while all other leading shares declined.

"The sell-off only occurred during the last 30 minutes of the session, and the only thing that would seem logical at this point is a rebound, as the price levels are falling to very attractive points once again," Rahman said.

Many analysts linked the fall to an overall regional trend as the Saudi Tadawul index touched the 9,500 level yesterday.

In Abu Dhabi losses were even higher in terms of value, as market capitalisation fell Dh4 billion. The banking sector, led by the National Bank of Abu Dhabi, accounted for the biggest losses. etisalat, which lost 0.76 per cent to close at Dh19.35, accounted for about Dh600 million of the losses.

"There seems to be a serious liquidity problem that will be tested when the new Initial Public Offering (IPO) of the DFM opens for subscription," said a broker. The IPO is expected this month.