Sell-off on UAE bourses continues for second day

The sell-off on the UAE stock markets continued for the second day at the opening of the trade on Monday.
Dubai Financial Market General Index was down by 2.7 per cent to 1,894 points.
Barring Aman shares, all 22 stocks were trading in negative territory. Amlak Finance, Damac Properties, Emaar Malls, Shuaa Capital and DXB Entertainments were the worst performing scrips on Monday morning.
Abu Dhabi Securities Exchange was also down by 0.7 per cent on Monday morning, led by fall in Watania, Dana Gas, Waha Capital, RAK Properties and Eshraq. Similar to Dubai bourse, only Abu Dhabi Ship Building scrip was trading in positive on Monday morning.
The sell-off was prompted by regional economic worries, slump in oil prices and renewed US-China trade war worries.
WTI crude was down by nearly 7 per cent while Brent was trading 1.44 per cent lower on Monday morning.
Saudi finance minister Mohammed Al Jaddan comments also caused a worry among investors, who stated of likely painful and deep spending cuts for the country post the current oil price fall and global slowdown.
The comments mark a complete reversal of stance from a week earlier where the overall tone was more reassuring. Jaddan is considered to be the voice of Saudi leadership. As such, the comments indicate the kingdom is likely to slash spending by more than initial numbers of 15 to 20 per cent.
On Saturday, Moody's Investors Service cut the kingdom's rating outlook, citing deteriorating state of reserves. Saudi Arabia, whose reserves have fallen to lowest in over a decade, is about to enter into a contraction this year.  The rating agency has nevertheless kept the rating at A1, fifth highest grade and more than what Fitch and S&P have assigned currently.
On Sunday, Dubai Financial Market had sank four per cent while Abu Dhabi lost nearly three per cent. The two UAE bourses lost $6 billion in market capital on the previous year.
waheedabbas@khaleejtimes.com