• Home
• /
• Local business

Shares Fall on Disappointing Earnings

Both bourses were dragged down by real estate and banking companies. Dubai index mover Emaar Properties tumbled by 6 per cent toDh4.39. Abu Dhabi’s second largest property company, Sorouh Real Estate, fell by 6.3 per cent to Dh3.60 after its third quarter profit plunged by 76 per cent from a year ago to Dh187.3 million. Dubai Financial Market PJSC, the only listed stock market operator in the Gulf, slumped by 8.6 per cent after posting a 67 per cent drop in net profit to Dh258 million compared to Dh781 million a year earlier.

At Nasdaq Dubai, port operator DP World slumped by 6.6 per cent to $0.49. The company earlier this week posted a 6 per cent drop in third quarter container volumes.

“Earnings results were below consensus, that didn’t motivate investors to enter the market,” said Marwan Shurrab, vice-president and chief trader at Gulfmena Alternative Investments.

The main index of the Dubai Financial Market fell by 3.9 per cent to 2,197.52, its lowest since June 14, when it closed at 2,198.31. The index lost 2.1 per cent from the previous week.

The benchmark index of the Abu Dhabi Securities Exchange edged down by 2.4 per cent to 3,023.10, and was 3.1 per cent lower from last week.

Gulfmena’s Shurrab said selling was a bit overdone, considering that investors have already priced in earnings expectations for the third quarter.

“Investors were looking for signs of stability in the third quarter, that was what prompted the rallies. But now, investors will be looking at the fourth quarter and see if indicators will point to either a continuation of problems, or if economies can stand alone and move forward with most of the stimulus measures already implemented.”

Asian markets fell on Thursday, along with European markets, as weaker earnings, along with gloomy US economic data revived concerns that global economic recovery is faltering.

Global oil prices eased further on Thursday on concerns over fuel demand, with light sweet crude for December delivery trading at $77.06 a barrel, while Brent crude was at $75.71 a barrel. Nervouness about the United States economy and weakness in energy demand have prompted oil prices to fall about 6 per cent over five out of six trading sessions, since striking a one-year high of $82 on October 21. Construction-related companies were also one of the biggest losers.

Arabtec Construction, the UAE’s biggest construction company, fell by 5.3 per cent to Dh3.24 after its third quarter profit declined by 35 per cent to Dh166.6 million. Abu Dhabi-based Arkan Building Materials Co. lost by 6.5 per cent to Dh3.20, as its quarterly profit Dh28.2 million compared to Dh30.7 million a year earlier.

Banks also weighed on both bourses. In Dubai, Emirates NBD, lost by 4.9 per cent to Dh4.40, while the Dubai Islamic Bank dropped by 3.9 per cent to Dh2.97. Abu Dhabi Commercial Bank edged down by 5.8 per cent to Dh1.96. Abu Dhabi Islamic Bank fell by 3.7 per cent to Dh3.08.

The bank said its third quarter net profit rose by 11 per cent from a year ago to Dh239.5 million.

rocel@khaleejtimes.com