Dubai’s Shares Drop Most in Week on Bets Rally Overdone

Dubai’s benchmark stock index retreated the most in more than a week on investor speculation this year’s rally was overdone and before the board of Emaar Properties PJSC (EMAAR) meets to discuss a dividend payment.

Emaar, developer of the world’s tallest skyscraper, dropped 1.3 percent. Dubai Financial Market PJSC (DFM), the only publicly traded Gulf Arab stock market, declined for a third day. The DFM General Index (DFMGI) fell 1.4 percent, the most since March 7, to 1,660.47 at the 2 p.m. close in Dubai. The measure has surged 23 percent so far this year. The Bloomberg GCC 200 Index (BGCC200) rose 0.3 percent.

“It’s a technical correction,” said Nabil Farhat, a partner at Abu Dhabi-based Al Fajer Securities. “Some investors are on the sidelines awaiting the results of Emaar’s board meeting, which could impact stocks prices.”

Emaar, which last year agreed to investor demands to make its first dividend payout since 2008, will meet tomorrow to discuss distributions for 2011. The company’s shares, up 19 percent so far this year, said last month fourth-quarter profit more than doubled as it cut costs and generated more revenue from hotels and international operations. Emaar retreated the most since March 7, dropping to 3.06 dirhams.

Dubai’s stocks gained this year as companies posted improved earnings and after the emirate’s government said it expects two of its main companies to refinance debt without government help. The benchmark stock gauge tumbled 17 percent in 2011 on the heels of the uprisings in the Middle East and on concern that Europe’s debt crisis will slow global growth.

Oil Declines

The value of shares traded in Dubai jumped to 981 million dirhams ($267 million) on March 5, the highest since April 2010, according to data compiled by Bloomberg. The value of shares traded declined to about 218 million dirhams today.

Dubai Financial Market decreased 3.4 percent, the most since March 7, to 1.14 dirhams.

Oil for April delivery fell 0.3 percent to $107.06 a barrel last week in electronic trading on the New York Mercantile Exchange. Gulf Arab oil exporters, including Qatar and the United Arab Emirates, supply about a fifth of the world’s oil.

Abu Dhabi’s ADX General Index (ADSMI) decreased 0.7 percent and Oman’s MSM 30 Index (MSM30) slipped 0.4 percent. Saudi Arabia’s Tadawul All Share Index (SASEIDX) gained 0.2 percent, while Qatar’s QE Index (DSM) and Bahrain’s BB All Share Index (BHSEASI) rose 0.1 percent. Kuwait (KWSEIDX)’s gauge increased 0.5 percent.

In North Africa, Egypt’s EGX30 Index (EGX30) slumped 2 percent, the first drop since March 13. In Israel, the TA-25 Index (TA-25) gained 0.4 percent, while the yield on the country’s 5.5 percent notes due January 2022 declined one basis point, or 0.01 percentage point, to 4.77 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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