Dubai stocks lead Mideast drop on global rout, Abu Dhabi falls2 min read . Updated: 26 Jan 2014, 10:07 PM IST
The DFM General Index dropped 2.2%, the most since 11 November, to 3,733.70, in Dubai
Dubai: Dubai’s benchmark stock index retreated the most in more than two months, joining a global equities selloff. Abu Dhabi’s gauge had the biggest decline in almost five months.
The DFM General Index dropped 2.2%, the most since 11 November, to 3,733.70, in Dubai. The measure, which jumped at the end of last week, has still more than doubled in the past 12 months. Emaar Properties PJSC, the emirate’s biggest real-estate developer, declined the most since 7 January, while Dubai Islamic Bank lost 2.6%. Abu Dhabi’s gauge slid 1.8%, the biggest drop since 5 September, as the United Arab Emirates’ government said the country’s president is recovering from a stroke.
The declines follow a broader retreat in world markets last week, when China spurred investor concern that global growth will slow. The MSCI Emerging Markets Index lost 2.3% last week, while the Standard & Poor’s 500 Index posted the largest weekly slump since June 2012.
“Investors here are following this global weakness," Montasser Khelifi, a Dubai-based senior manager for global markets at Quantum Investment Bank Ltd, said by phone. “The president’s stroke may have a limited effect on the market," he said.
Sheikh Khalifa bin Zayed Al Nahyan suffered a stroke on 24 January, state-run WAM news agency reported on Saturday. His brother, Sheikh Mohammed Bin Zayed Al Nahyan, is the Crown Prince of Abu Dhabi. In recent years, Sheikh Mohammed has been at the forefront of the UAE’s foreign policy and has led efforts for closer economic and financial integration with Dubai, the country’s second-biggest emirate and commercial hub.
Emaar declined 2.7% to 7.80 dirhams. DIB, Dubai’s largest Islamic lender, fell to 5.90 dirhams.
Dubai’s benchmark index on 23 January jumped 3.6%, the most in more than four months, on speculation the emirate reached an agreement with neighbouring Abu Dhabi on $20 billion of debt it received to stave off a default.
“The declines are normal profit taking," Wadah Al Taha, the chief investment officer at Dubai-based Al Zarooni Group, said by phone on Sunday. “It’s not related to what’s happening to the international market," he said.
Egypt’s benchmark EGX 30 Index declined 0.2% following violence that marked the anniversary of the country’s 2011 uprising. At least 67 people were killed over the past two days in clashes between protesters and police as five bombings struck Cairo.
“The market has proved previously that it’s quite resilient to violence," Tariq Hussein, co-head of MENA sales trading at Cairo-based Commercial International Brokerage Co., said by phone. “Terrorism is something we’ll likely be living with for the foreseeable future. How it affects market sentiment will always come down to scale and damage."
“Presidential elections will be held before parliamentary elections," Interim President Adly Mansour said in a speech on Sunday. “The government won’t hesitate to take exceptional measures if needed to combat terrorism," he said.
Israel’s TA-25 Index declined 1.6%, the most since 12 December, at 3:37 pm in Tel Aviv. The yield on the government’s benchmark bond due in March 2023 lost one basis point, or 0.01 percentage point, to 3.49%.
“Tel Aviv is following the sharp selloff in global equities," Zach Herzog, head of international sales at the brokerage unit of Psagot Investment House Ltd., said on Sunday by phone.
Teva Pharmaceutical Industries Ltd., the world’s biggest maker of generic drugs, lost 2.5% to 149.5 shekels, or $42.77, closing the gap to its US-traded shares, which closed at $42.93 on 24 January.
Saudi Arabia’s Tadawul All Share Index and Qatar’s benchmark retreated 0.4%, while Oman’s fell 0.8% and Bahrain’s 0.2%. Kuwait’s measure added 0.1%. Bloomberg