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Property and Banks Drag UAE Stocks Lower

DUBAI — Property and banking shares dragged down the UAE bourses on Wednesday, as investors darted toward the exits following a rout of overseas stocks amid growing worries about the health of the global economy.

The benchmark index of the Dubai Financial Market declined for a third day, ending 0.9 per cent lower at 1,879.49 points, with 15 out of 27 stocks traded, ending in negative territory. The main index of the Abu Dhabi Securities Exchange, slipped by 1.8 per cent to 2,859.01 points, its weakest close in two weeks. Losers outnumbered gainers, 22 to 5. Asian stocks fell on Wednesday while European stocks were trading lower following Wall Street’s weak closing 
on Wednesday.

Dubai index heavyweight Emaar Properties, the Middle East’s biggest property company edged down by 1.5 per cent to Dh3.33, while Arabtec Holding, the country’s largest construction firm, gave up 2.4 per cent at Dh2.81. Abu Dhabi-based Aldar Properties lost 5.1 per cent at Dh4.70, while Sorouh Real Estate shed 4.8 per cent at Dh3.03.

Abu Dhabi-based Aabar Investments lost 4.9 per cent to Dh2.47, extending its losses to 11.6 per cent since posting a second quarter loss of Dh2.18 billion this week. “Investors decided to close positions as global markets fell. With the local bourses rallying in recent sessions while other markets were going down, investors cashed out earnings,” said Mohammed Yasin, chief executive at 
Shuaa Securities.

Analysts said the surprise rallies since March this year have largely been due to expectations of a recovery in company earnings, but with very little signs of real improvement in the economy, some investors are reluctant to push stocks higher.

“Some investors are not making big moves at this point as the stimulus for rallies are running out of steam,” said Vyas Jabahanu, head of investments at Al Dhafra Financial Brokerage.

There is a growing consensus that investors may have run ahead of themselves in the previous rallies and are now opting to be more cautious while keeping a keen eye on economic data that will indicate if recovery is forthcoming, and whether it will be sooner or later, said Haissam Arabi, chief executive at Gulfmena 
Alternative Investments.

“Investors for now will closely watch the performance of bigger markets like Wall Street and take directions from these markets while waiting for third quarter results.”

Shuaa’s Yasin said the UAE markets are going through a healthy consolidation phase. “If prices stabilise further, investors will see it as a good sign for building positions that could set off bigger rallies in the fourth quarter.”

Banks were some of the biggest decliners. Emirates NBD, the country’s biggest bank by assets, fell by 2.4 per cent to Dh3.61. In Abu Dhabi, the Abu Dhabi Commercial Bank shed 3 per cent to Dh1.95; the National Bank of Abu Dhabi lost nearly 1 per cent at Dh10.85, while First Fulf Bank gave up 2.4 per cent to 
Dh16.35.

rocel@khaleejtimes.com