UAE Shares Decline on Lacklustre Trade

DUBAI — UAE shares declined on Thursday in lacklustre trade as investors stayed out of the market in the absence of compelling catalysts.

Published: Sat 20 Dec 2008, 1:00 AM

Last updated: Sun 5 Apr 2015, 11:28 AM

“It has been the same pattern for the most part this week, there would be strong buying interest at the start but would dissipate towards the end,” said Ali Khan, executive director of Arqaam Capital, adding “it will likely stay that way in the coming sessions if there are no positive leads that the markets could focus on.”

The benchmark Dubai Financial Market Index dropped 1.02 per cent to 1,909.31 while the Abu Dhabi Securities Exchange main index lost 1.31 per cent to 2,676.04.

“We did not see much movement in both indexes, these markets are still being dominated by retail investors so there was a lot of swing trades,” said Sherif Abdul Khalek of Beltone Financial.

The announcement by the Organisation of Petroleum Exporting Countries of a cut in oil output also failed to inspire investors.

“The announcement did not have that much effect on oil prices as there are concerns from the demand side. With the major economies in recession, there are expectations of reduced demand which is fuelling the slide in commodity prices,” said Faisal Hasan, research head of Global Investment House.

Declines in Dubai were led by banks with Global Investment House dragging shares further after Standard & Poor’s cut its credit rating after Wednesday’s session on concern Kuwait’s biggest investment bank will fail to pay its debts that matured last December 15.

Global has asked for a reprieve until December 21 and is in talks with several banks to refinance its debts.

Global shares fell 9.98 per cent to Dh8.02. Among local banks, the Commercial Bank of Dubai dropped 5.0 per cent to Dh4.75 while the Dubai Islamic Bank lost 2.5 per cent to Dh2.34.

Bucking the trend were select property stocks led by Emaar Properties, the Middle East’s biggest property developer. Its shares rose 0.34 per cent to Dh2.92 after it said its Egyptian unit will develop a $100-million city in Cairo.

Credit Suisse on Thursday maintained its “overweight rating” on the UAE property sector, saying the sector will recover quickly from the current turmoil because of its solid fundamentals.

The Dubai Financial Market gained 4.8 per cent to Dh1.31 after its holding company Borse Dubai which also holds a 20 per cent stake in Nasdaq OMX Group said it will pay off its $4.1 billion loan if talks with banks to refinance the debt collapse.

Borse Dubai raised $4.1 billion in 2007 via a club deal to fund its OMX takeover. The refinancing is due on February 20.

rocel@khaleejtimes.com