Dubai leads Gulf stock fall as crude slump raises risk

The DFM General Index slumped to a one-year low while the ADX General Index remained the region's only gainer on Monday

Almost every benchmark stock index in the Arab Gulf declined, led by Dubai equities, after Opec's failure to set a cap on oil production spooked investors who had already been concerned by the Middle East's geopolitical risks.
Emaar Properties PJSC, the stock that makes up almost a fifth of Dubai's DFM General Index, slumped to a two-year low and was the biggest contributor to losses in the emirate, the steepest drop in emerging markets. The developer of the Burj Khalifa in Dubai, the world's tallest tower, is about 30 per cent owned by the government. The Bloomberg GCC 200 Index, which tracks the region's top 200 companies, fell 0.5 per cent at 3:49pm in Dubai.
"Stocks held by foreigners, such as Emaar Properties, are being punished because they don't feel the risk is worth the return anymore, especially now that oil is falling again and the geopolitical risks are still high," said Tariq Qaqish, the head of asset management at Dubai-based Al Mal Capital.
While Dubai doesn't rely on crude revenue to fund spending, the emirate thrives on trade and spending from nations in the six-member Gulf Cooperation Council, where oil is the main source of income.
Brent crude, a pricing benchmark for half the world's oil, dropped near a six-year low on Friday as the Organisation of Petroleum Exporting Countries implied that the earliest it can consider reducing production is June. Brent declined one per cent to $42.57 a barrel on Monday.
Emaar's shares fell four per cent to Dh5.57, dragging Dubai's index down 2.2 per cent. Saudi Arabia's Tadawul All Share Index dropped 1.3 per cent and Qatar's QE Index lost 0.8 per cent.
"Nobody believes that they should buy now or they'll miss out," Mohammed Ali Yasin, managing director of NBAD Securities in Abu Dhabi, said by phone. "There is a feeling in the market that the declines will continue into 2016."
Abu Dhabi's ADX General Index was the region's only gainer, erasing earlier losses of as much as 0.9 per cent, after Emirates Telecommunications Group climbed 1.9 per cent. The company known as etisalat, the second-heaviest weighted stock on the gauge, joined MSCI's UAE index last week. Abu Dhabi stocks advanced 0.3 per cent.