Abu Dhabi Shares Retreat Most Since March on Etisalat, Europe

Abu Dhabi’s benchmark index fell the most in almost five months as Emirates Telecommunications Corp. declined amid concern its smaller rival is increasing market share and European stocks retreated.

Etisalat, as Emirates Telecommunications Corp. is known, dropped to the lowest level in almost two months. Construction- supplies maker Arkan Building Materials Co. (ARKAN) lost for the third time in four days. Abu Dhabi’s ADX General Index (ADSMI) fell 1.2 percent, the most since March 2, to 2,641.41 at the 2:00 p.m. close in the emirate. The measure has dropped 2.3 percent this month. The Bloomberg GCC 200 Index (BGCC200), which tracks the biggest 200 companies in the Persian Gulf region, declined 0.5 percent at 2:11 p.m. in Riyadh.

The shares of Etisalat have tumbled 6.8 percent since it said July 18 that second-quarter profit declined 15 percent, missing analysts’ estimates. The United Arab Emirates’ second phone company, Emirates Integrated Telecommunications Co. (DU), or Du, is forecast to report a 54 percent jump in second-quarter profit next month, according to the mean estimate of three analysts on Bloomberg. Du has fallen 0.3 percent since Etisalat’s earnings.

“Du is picking up a lot of market share,” said Dubai- based Haissam Arabi, chief executive officer at Gulfmena Alternative Investments. Etisalat’s second-quarter “earnings weren’t spectacular.”

Debt Ceiling

European stocks fell for a third day with the Stoxx Europe 600 Index declining 0.5 percent. The gauge has retreated 7.7 percent from this year’s high in February amid concern that Europe’s fiscal crisis will derail the economic recovery and speculation that U.S. lawmakers will fail to agree on increasing the nation’s debt ceiling by next week’s deadline.

Etisalat, which has the biggest weighting on Abu Dhabi’s benchmark index, fell 1 percent to 10.30 dirhams, the lowest level since May 31. Without adjusting for a 25-fils cash dividend, the shares lost 3.3 percent. Du retreated 0.3 percent to 3.16 dirhams.

Arkan Building declined 3.1 percent to 1.24 dirhams. Each dirham has 100 fils.

Dubai’s DFM General Index (DFMGI), Saudi Arabia’s Tadawul All Share Index (SASEIDX) and Qatar’s gauge dropped 0.3 percent. Kuwait’s measure and Oman’s MSM30 Index (MSM30) retreated 0.4 percent, while Bahrain’s gauge rose 0.4 percent.

To contact the reporter on this story: Alaa Shahine in Dubai at asalha@bloomberg.net

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

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