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DFM at five-month low, ADX retreats 2 per cent
DUBAI — The Dubai Financial Market’s General Index, or DFMGI, on Tuesday slumped to a five-month low after a heavy loss from Dubai Holding Commercial Operations Group, which declared a $6.2 billion loss for 2009.
Most Middle East markets declined as oil prices dropped three per cent to $72 per barrel and world stocks fell as expectations that slowing growth in China and the eurozone would hamper the global economic recovery.
The DFMGI fell 3.06 per cent to 1,531.15 points to touch a five-month low, in a sell-off led by real estate stocks. Abu Dhabi Securities Market’s General Index, ADXGI, fell 1.97 per cent to 2,552.99 points, its lowest levels since December last year.
“Foreign investors are away from the market and a major part of what we are seeing today has to do with the announcement from the Dubai Holding unit,” said Samer Al Jaouni, General Manager for Middle East Financial Brokerage Company. “I believe we are seeing negative sentiments widening further in the region.”
Real estate stocks took a beating, with market heavyweight Emaar Properties falling six per cent. Developer Deyaar dropped 7.4 per cent and Union Properties ended 6.5 per cent lower.
UBS analyst Saud Masud said concerns that the Dubai Holding subsidiary would add more units to the property market was the main cause of concern for the sell-off in property stocks.
“The amount of pipeline that they plan to bring into the market (about 21,000 units) and when you take into account that Nakheel is going to add more units, it is going to create significant over supply in the market,” he said.
Saudi Arabia’s benchmark index fell 2.5 per cent as investors sold petrochemicals stocks amid falling oil prices.
Yanbu National Petrochemical (Yansab) fell 5.2 per cent. Index heavyweight Saudi Basic Industries Corp (SABIC) dropped 3.1 per cent. The broader petrochemical index fell 3.3 per cent.
Qatar rises
Qatar’s main index bucked the downtrend in regional and global markets to end up 0.7 per cent at 6,833 points.
“The prices are not very attractive for sellers and we don’t have any major concerns in the economy unlike some of the other regions. Also, banks in the region are at a comparatively better position, despite the slowdown,” Jaouni said.
Oman’s index fell 1.3 per cent to 6,210 points as risk-averse investors hold back from making new buys. —
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