Equities continue their slide on UAE markets

Abu Dhabi: UAE stocks on Monday continued with their decline with Emaar Properties, the largest listed real estate developer, falling to record-low levels to close 1.46 per cent down at Dh10.10.

Analysts, who agreed that the Dh10 represented a strong support level, are now expecting the decline to continue, with levels as low as Dh9 or even Dh8 likely to be reached.

"Emaar's share price never hit the Dh10 support level, with the historical low recorded at Dh10.40. Anything can happen now," said Mohammad Beheiri, dealings and portfolio manager at Amanah Financial Services.

Accordingly, Dubai's new general index retreated to approach its record-low levels, below the 4000 mark, since its inception in August 2006. The benchmark fell by 1.32 per cent to 4067.17.

"We expect the index in Dubai to fall further by at least 100 points," Beheiri said.

The reason for the pessimism is the return of the vicious circle of banks' margin calls, followed by sell-offs, dragging prices down to induce more margin calls.

"One unfortunate incident is leading to another, and it all started with the foreigners' withdrawal to cover up for their losses overseas. This was followed by institutions and banks, with no one expecting a repositioning during a downtrend," he explained.

All the leading shares nosedived in Dubai. These include Dubai Islamic Bank that saw a rise in its losses by 3.2 per cent yesterday to close at Dh9.05 .

"Foreigners account for about 30 to 35 per cent of trading in Dubai, an influential stake by any measure that is taken into account by institutional investors, and their withdrawal had a strong ripple effect on the market," Beheiri said.

In Abu Dhabi, the decline in the market's index was less steep, with analysts attributing the slow-pace to the government's strong grip, and accordingly the weak foreign influence. However, the value of traded shares fell below average to Dh230.6 million, compared to Dh494.13 million in Dubai.

The gains of 2.75 per cent recorded by the National Bank of Abu Dhabi that stood at Dh18.70 by the close offset the losses recorded across the board. However, these gains came as a result of five transactions worth less than Dh470,000.

Overall, the Emirates Securities general index fell by 0.61 per cent to 4257.65, while the market capitalisation of the listed companies declined by Dh3.47 billion.