Dubai’s Shares Retreat Most Since 2010; Arabtec Leads Drop Before Earnings

Dubai’s stocks retreated the most in more than two years, the worst-performing equity market in the world today, ahead of Arabtec Holding Co. (ARTC) financial results and on concern over the success of Greece’s debt swap.

Arabtec, the biggest United Arab Emirates construction company that’s estimated to report a 57 percent drop in 2011 profit, slumped 9.9 percent. Dubai Financial Market PJSC (DFM) fell the most in more than seven weeks. The DFM General Index (DFMGI) slid 4.8 percent, the most since January 2010 and was the biggest daily decliner among 93 global indexes tracked by Bloomberg, to 1,607.77 at the 2 p.m. close in the emirate. Abu Dhabi stocks decreased 2.2 percent, the most since Aug. 7.

“Both U.S. and European equity markets came under pressure yesterday,” hurting sentiment locally, said Sherif El Zeneiny, head of equity trading at National Bank of Abu Dhabi PJSC. “The U.A.E. markets witnessed a selloff today, as many investors were taking money off the table. We might see some selling pressure in the short term, but would expect the markets to stabilize shortly after that and continue its upward trend.”

In Europe, the Stoxx Europe 600 Index (SXXP) rose 0.5 percent after tumbling 2.7 percent yesterday amid concern that Greece may not get adequate participation in a debt swap. The Standard and Poor’s 500 (SPX) Index dropped 1.5 percent yesterday, while MSCI AC Asia Pacific Index (MXAP) lost as much as 1 percent today.

Arabtec Meets

Dubai’s stocks have advanced 19 percent this year after companies reported improved earnings and dividends. That compares with a 7.4 percent increase in the Bloomberg GCC 200 Index. (BGCC200) Arabtec shares dropped the most since December 2009, slumping to 2.93 dirhams. The company, whose board is meeting today, may post a drop in full-year profit to 133 million dirhams ($36 million), according to the average estimate of 12 analysts on Bloomberg.

Aabar Investments PJSC (AABAR), the Abu Dhabi government company which owns stakes in Daimler AG (DAI) and UniCredit SpA (UCG), increased its ownership in Arabtec to 5.28 percent. That disappointed some investors who had bet on Arabtec winning contracts amid regional infrastructure spending. The shares are trading at 30 times estimated earnings compared with 10.3 times for Dubai’s benchmark.

Dubai Financial Market, the only publicly traded Gulf Arab stock market, tumbled 9.5 percent, the most since Jan. 16, to 1.05 dirhams.

Qatar’s QE Index (DSM) fell 0.7 percent, its fourth day of declines. The Kuwaiti (KWSEIDX) gauge and Oman’s MSM 30 Index (MSM30) slipped 0.7 percent, while Bahrain’s BB All Share Index (BHSEASI) rose 0.1 percent. Saudi Arabia’s Tadawul All Share Index (SASEIDX) declined 0.3 percent, snapping a 14-day rally, and trimming this week’s gain to 1.4 percent.

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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