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Dubai stocks decline on global slump

DUBAI — Dubai shares fell to the lowest in a week on concern Dubai World will stop paying interest on loans starting this month, and as stocks slid globally as a deepening debt crisis in Europe’s threatens to slow an economic recovery.

Dubai Islamic Bank PJSC, the United Arab Emirates’ largest Islamic lender, dropped the most in more than two weeks after it said first-quarter profit slumped 46 per cent. Emaar Properties PJSC, the developer of the world’s tallest skyscraper, retreated for a third time this week.

The Dubai Financial Market General Index lost 0.7 per cent to 1,723.28 as of 12:38 p.m. in Dubai, bringing the decline for the week to 0.9 per cent. The Bloomberg GCC 200 Index of 200 companies in the gulf region slipped 0.2 per cent to the lowest in two weeks.

“The focus here remains on the Dubai World process and possible implications for banks and trade creditors,” said Ali Khan, head of cash-equity trading at Dubai-based Arqaam Capital Ltd.

“The backdrop to international markets remains weak.”

Asian stocks slumped, dragging the MSCI Asia Pacific Index down the most in three months and erasing its 2010 gain amid fears European government debt levels and efforts by China to crack down on property speculation will hurt the global recovery.

The MSCI Emerging Markets Index declined 1.4 per cent and the MSCI World Index retreated to the lowest in more than two months.

Dubai World, one of the emirate’s three main state-owned holding companies, and Nakheel are seeking to renegotiate borrowings of $24.8 billion.

Dubai Islamic Bank dropped as much as 2.6 per cent, the biggest intraday decline since April 19, to Dh2.22 and last traded at Dh2.23.

The Shariah-compliant bank reported net income of Dh200 million ($54.5 million), down from Dh370.3 million a year-earlier. Emaar declined 1.3 per cent to Dh3.84.

Abu Dhabi’s ADX General Index advanced 0.2 per cent, while Bahrain’s gauge was little changed.

Oman’s MSM30 Index dropped 0.3 per cent and Qatar’s QE Index lost 0.5 per cent to the lowest in more than a month. The Kuwait Stock Exchange Index slid 1.1 per cent.

Saudi Arabia’s Tadawul All Share Index is closed for the weekend.