Dubai: Dubai stock market snapped five days of gains, led lower by the blue-chip banking and property shares, while its Abu Dhabi peers showed a muted performance with losses in banks capped by gains in telco Etisalat.
Dubai Financial Market traded down 0.8 per cent to close at 2,601 points. The pullback followed five sessions of back-to-back gains which together added 3.5 per cent to the index's value.
Leading the losses were financial and real estate sectors whose vast majority of stocks closed the day in the red with the emirate's top lender, Emirates NBD, and its biggest developer, Emaar Properties, dragging the index the most because of their high weightage on the gauge.
Underperforming on dividend
But in percentage term, Emaar Development underperformed all other stocks declining 3.5 per cent after its board of directors sought shareholders' nod for their proposal of no dividend payouts for 2020. The company earlier reported 39 per cent plunge in the full-year profits against a drop of 23 per cent in its revenues, forcing the board to go that way.
The substantially lower profits stemmed from sector-wide lackluster activates throughout the last few years, but the mood was further darkened by the virus-inflicted lockdowns which brought in social and commercial curbs to the regional tourism and business hub.
But the real sector picked up in the final months of last year with Emaar Development recording 75 per cent growth in sales during the fourth quarter compared to the third quarter of 2020. The recent reports show the recovery is still on as investors are taking advantage of lower property prices in Dubai. So the Wednesday's drop looks temporary and comes after recent gains.
Abu Dhabi Securities Exchange closed nearly unchanged at 5,746 points, pairing most of losses that amounted to more that 0.5 per cent at one point during the session. Banking stocks traded lower, but their underperformance was largely compensated by the telco Etisalat which climbed 1 per cent continuing its impressive run for an eight day.
The telco rally was enabled by regional and global optimism about economic activities getting back to normal soon but the stock has also been on surge due to the events that unfolded to it earlier this year - special dividends, higher full-year profits and raising foreign ownership limit to 49.