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UAE Shares Decline on Gloomy Outlook

Both bourses fell for a third straight session, with the Dubai Financial Market benchmark index ending 2.17 per cent lower to 1,4827.26 as property stocks lost 4.52 per cent.

Abu Dhabi’s benchmark index slipped 1.32 per cent to 2,226.09 with property issues falling 5.11 percent. “We expect the property market to witness further correction in 2009,” said Faisal Hasan, vice president and head of research of Global Investment House.“Massive layoffs and the freeze in business activity will lead to lower expatriate population growth and therefore lower demand on both residential and commercial properties especially in Dubai.”

HSBC Holdings Plc in a report said Dubai is delaying or cancelling close to 60 real estate projects worth $75 billion amid falling sales and tightening financing.On the one hand, the Real Estate Regulatory Authority said in published reports over the weekend that the number of property developers registered in Dubai dropped 40 per cent in two months.

Emaar, the Middle East’s biggest property company closed 4.59 per cent lower at Dh1.87. The company said Sunday it bought a 40 per cent stake in Emaar Turkey from Cihan Kamer, chairman of the Atasay Group.

Deyaar Development, gave up 3.77 per cent to Dh0.51.Arabtec Holding, the country’s biggest construction firm building the world’s tallest structure in Dubai, was still unable to recover from previous slides as it skidded 9.48 per cent to Dh1.05.

The drop in registered property developers was expected and natural consolidation in the sector is seen. I see this (in the long run) as more positive than negative as it restricts future supply and helps the market take a breath and concentrate on current demand levels,” said Matthew Wakeman, managing director of cash and equity linked trading at EFG-Hermes.

Disappointing results in Abu Dhabi property stocks led Sorouh to go down 6.25 percent to Dh2.61 while Aldar Properties slipped 4.31 per cent to Dh2.33.

Wakeman said the bourses will see more consolidation in the coming sessions as investors await for fresh positive catalysts.

“Retail investors need catalysts to keep them interested and stay invested in the markets. The UAE stocks aren’t delivering on this front.”


rocel@khaleejtimes.com