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Syrian crisis hits markets

Dubai’s stock index on Tuesday nosedived the most in the world, leading a Gulf-wide dip on the ominous prospects of a US-led military intervention in Syria.

The benchmark Dubai Financial Market General Index plummeted seven per cent to close at 2,549.61 points, the most since November 2009 and the steepest fall among more than 90 global benchmarks.

Tuesday’s fall came two days after the Dubai benchmark measure rose to its highest level since November 2008 to 2,748.27 points.

The Kuwait Stock Exchange fell six per cent as the largest Arab stock market, Saudi Arabia, shed more than 3.5 per cent, nearly two hours before closing time.

Emaar Properties, the region’s leading developer and one of the largest publicly traded-entities, suffered the biggest shock with a 8.36 per cent decline to Dh5.7. Gulf Navigation Holding, whose tanker fleet ships oil and gas, dipped 9.4 per cent to 28.9 fils as all seven Arabian Gulf benchmarks recorded steep declines. Abu Dhabi’s index dipped 2.8 per cent, Oman’s 1.1 per cent, Qatar’s 1.3 per cent and Bahrain’s 1.2 per cent.

The Gulf-wide crash was in sequence with depressed market trends across the globe in the wake of a stern warning by US Secretary of State John Kerry on Monday that the US would demand “accountability” after the deadly chemical weapons attack on Syrian civilians.

“Markets across the Middle East reacted as the US stance triggered a wide spread apprehension of an impeding attack that could further destabilise the region,” a Dubai-based analyst said.

Iran’s foreign ministry has warned that a US attack on Syria would drag the entire Middle East into conflict. Crude oil rose 0.8 per cent to $106.81 a barrel at 2:11pm in Dubai on concern the unrest may disrupt supplies from the Middle East, which, according to the International Energy Agency, accounted for 35 per cent of global crude output in the first quarter.

Tuesday’s decline trimmed the overall gain of Dubai’s benchmark to 57 per cent this year, still the second-best among global benchmarks after Ghana’s market.

International investors and emerging market funds have shown great interest in meeting DFM-listed companies in the wake of the UAE attaining the MSCI emerging-market status. This MSCI recognition is certainly the highlight of this year’s DFM road shows overseas as it has been attracting a diverse range of investors compared to previous road shows, which were mostly attended by hedge fund managers, the DFM said on Tuesday in a statement.

Currently, foreign investors represent over a third of the trading value at DFM and they were net buyers of as much as Dh1 billion of shares during the first half of this year. Trading value has jumped 82 per cent to Dh59 billion during the same period.