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Dubai Stocks Extends Drop on Concern Mideast Unrest May Spread

Dubai’s benchmark stock index declined for a second day to the lowest intraday level in seven years on concern political unrest in the region may spread to Saudi Arabia and after Libyan warplanes bombed rebels.

Emaar Properties PJSC (EMAAR), builder of the world’s tallest skyscraper, retreated 5.6 percent and Dubai Financial Market (DFM) PJSC tumbled to the lowest in two years. The DFM General Index (DFMGI) declined 2.5 percent to 1,339.81, the lowest level since June 2004, at 12:56 p.m. in Dubai. The gauge has lost 18 percent since Tunisia’s Zine El Abidine Ben Ali was ousted in January.

Investors are shunning assets in the Middle East and North Africa as the political turmoil, which started in Tunisia more than two months ago, expanded to Oman, Bahrain, Yemen, Libya and Iran. Websites have called for a nationwide Saudi “Day of Rage” on March 11 and March 20, Human Rights Watch said in a statement on its website on Feb. 28.

“It is the Saudi March 11 protest that is spooking investors here in the United Arab Emirates,” said Nabil Farhat, partner at Abu Dhabi-based Al Fajer Securities. “Investors are apprehensive about holding any positions over the weekend on worry over any deterioration in political situation.”

New Protests

Saudi Arabia’s benchmark stock index plunged 15 percent this week on concern protests may extend to the kingdom, the biggest supplier in the Organization of Petroleum Exporting Countries. Prince Talal Bin Abdul Aziz Al Saud, a member of Saudi Arabia’s royal family, said on Feb. 17 that the kingdom may see protests unless King Abdullah introduces reforms, according to BBC Arabic TV. The king last week announced plans to spend about 110 billion riyals ($29 billion) on programs aimed at boosting housing, education and social welfare.

In Libya, Qaddafi’s ground forces fought unsuccessfully for a main Libyan oil port and opposition leaders appealed for foreign nations to launch airstrikes against regime mercenaries amid violent protests demanding the ouster of the leader. The Bloomberg GCC 200 Index (BGCC200) of Persian Gulf stocks retreated 0.2 percent, bringing the drop this year to 15 percent.

“Investors are worried about fresh calls for protests” in the region, Farhat said. “If these calls die down then we might see a sharp rebound in stock prices.”

Emaar retreated 5.6 percent to 2.36 dirhams, the lowest since Decmeber 2009. Dubai Financial Market, the only Gulf Arab stock market to sell its own shares to the public, slumped 7.7 percent to 1.08 dirhams, the lowest since March 2009.

Tunisia Closed

Bahrain’s BB All Share Index lost 0.9 percent. Kuwait’s SE Price Index fell 0.5 percent and Qatar’s measure declined 2 percent. Abu Dhabi’s ADX General Index (ADSMI) gained 0.3 percent and Oman’s MSM30 Index (MSM30) advanced 0.7 percent. Saudi Arabia’s market is closed for the weekend.

The Tunisian bourse suspended trading from Feb. 28 until further notice, it said that day. Egypt stock trading is set to resume March 6 after a suspension of more than a month amid a popular revolution that toppled the 30-year-old regime of former President Hosni Mubarak. The measure lost 16 percent in the week ended Jan. 27, when it last traded.

-- Editor: Claudia Maedler, Shanthy Nambiar

To contact the reporter on this story: Zahra Hankir in Dubai at zhankir@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

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