Dubai Leads Gulf Stocks Lower on Dubai Holding Debt Concern; Emaar Falls
Dubai’s benchmark index declined to the lowest level since March on concern Dubai Holding LLC, a company owned by the emirate’s ruler, may have to restructure some of its $12 billion in debt and as European stocks fell.
Emirates NBD PJSC, the United Arab Emirates’ largest bank by assets, dropped for a second time this week. Emaar Properties PJSC, developer of the world’s tallest tower, retreated 2.8 percent. Union Properties PJSC declined the most in almost two weeks. The DFM General Index lost 2 percent to 1,706.58, the lowest close since March 11. Oil pared yesterday’s gain, dropping as much as 1.9 percent.
Dubai Holding, owned by Sheikh Mohammed Bin Rashid Al- Maktoum, and its units owe banks $12 billion, a person with knowledge of the matter said yesterday. Dubai International Capital LLC is talking to banks to refinance a $1.25 billion loan due in June and Dubai Holding Commercial Operations Group LLC, asked lenders to roll over a $555 million credit facility due in July, the person said.
“Lack of visibility into Dubai Inc.’s deleveraging and housing market in general may reinforce bearish sentiment and may motivate some investors to sell into any strength,” said Saud Masud, a Dubai-based analyst at UBS AG.
European stocks also fell on concern a $1 trillion lending package, which sent the Stoxx Europe 600 Index to the biggest gain in 17 months yesterday, won’t solve the region’s debt crisis. Asian shares and U.S. index futures slid. Crude oil declined to as low as $75.36 a barrel.
Dubai, the second-biggest of seven states that make up the U.A.E., and its state-owned companies have debt of $109.3 billion, according to International Monetary Fund estimates. Dubai World, one the emirate’s three main state-owned holding companies, and its real-estate unit, Nakheel PJSC, are in talks with banks to restructure $24.8 billion of debt.
Emirates NBD, one of the main creditors to Dubai World, lost 1.3 percent to 2.95 dirhams.
Emaar fell to 3.81 dirhams. The company is implementing measures to seize properties from buyers who defaulted on payments for residences in Dubai Marina, according to report in Abu-Dhabi based daily The National.
Union Properties, Dubai’s third-largest developer by market value, declined 3.5 percent to 44.8 fils.
Saudi Arabia’s Tadawul All Share Index fell 1.1 percent. Abu Dhabi’s benchmark index lost 0.2 percent after surging the most since December yesterday. The Kuwait Stock Exchange Index dropped 0.1 percent, Bahrain’s gauge declined 0.4 percent and Oman’s MSM30 Index retreated 0.2 percent, while Qatar’s QE Index gained 0.3 percent.
Ras Al Khaimah Ceramics PSC rose the most in more than a week, gaining 5.3 percent to 1.58 dirhams. The U.A.E.-based maker of tiles, sinks and bathtubs said first-quarter profit increased 16 percent to 77.86 million dirhams ($21 million).