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UAE Stocks Fall on Global Recession Fears

DUBAI - Uncertainty returned to stock markets around the world on Wednesday as investors worried that coordinated action by governments may not be enough to ward off a global recession. Attention turned from possible stabilising measures for capital markets to concerns over the length and depth of the downturn.

In the UAE markets fell as the dramatic rises in the previous two days were outweighed by fears the UAE economy will not be immune to the deteriorating economic climate. The benchmark Dubai Financial Market General Index plummeted 7.44 per cent, or by 275.48 points, erasing most of the previous day’s gains.

Once again the real estate sector was in focus with the sub index declining nearly 10 per cent. Emaar Properties fell 9.88 per cent with almost 110 million shares changing hands. The Abu Dhabi Securities Exchange General Index retreated 2.1 per cent. According to Khaled Masri, Partner, Asset Management at Rasmala, “The panic in global and regional markets is leading to a brutal disregard for the stark differences between the economic situation in the MENA region, especially the GCC block, and that in other global economic blocks.”

However, Faisal Hasan, Head of Research at Global Investment House said the outlook for the UAE economy remains positive. “We feel UAE continues to be one of the most diversified economies in GCC with (the) non-oil sector contributing in a big way. Although we have seen a significant fall in oil price, the prices are still above the break-even point for the government budgets to remain in surplus.”

Elsewhere Saudi Arabia’s Tadawul All Share Index gained for a third day adding 0.5 per cent, in Qatar the DSM 20 Index lost 3.3 per cent while the Bahrain All Share Index fell 1.1 per cent. The Muscat Securities Market 30 Index eased 0.4 per cent and the Kuwait Exchange was down 0.6 per cent.

mark_townsend@khaleejtimes.com