Dubai Index Drops to Week-Low as U.S. Data Weighs; Tadawul Falls

Dubai shares retreated to a one-week low ahead of first-quarter earnings and after a U.S. jobs report missed estimates, fueling concern about the strength of the global economic recovery. Saudi shares tumbled.

Arabtec Holding Co. (ARTC), the United Arab Emirates construction company whose shares have more than doubled this year, declined 4.4 percent. Dubai Islamic Bank PJSC (DIB), the U.A.E.’s biggest bank complying with Shariah rules, fell to the lowest since January. The DFM General Index (DFMGI) decreased 1.1 percent to 1,668.62 at the 2 p.m. close in the emirate, the lowest since April 2. Saudi Arabia (SABIC)’s Tadawul All Share Index (SASEIDX) fell 1.8 percent, the most since Aug. 20, to 7,717.72. The index is up 20 percent in 2012.

Today’s declines are “a mixture of the effect of recent weakness in international markets and the anticipation of the first-quarter results for U.A.E. companies,” said Tariq Qaqish, deputy head of asset management at Dubai-based Al Mal Capital.

Emerging market stocks declined 0.5 percent last week and the Standard & Poor’s 500 Index (SPX) retreated 0.7 percent after the Federal Reserve signaled it will refrain from further monetary stimulus and concern intensified that Europe’s debt crisis may worsen. The U.S. Labor Department said employers added 120,000 jobs, the fewest in five months and less than the median economist forecast in a Bloomberg survey. The U.S. market was closed April 6 for a holiday.

Saudi Drop

The earnings season in the Persian Gulf has started, with companies in Saudi Arabia and Qatar reporting results. Almarai Co. (ALMARAI) slumped the most in more than a year yesterday, and extended losses today, dropping 1.8 percent to 67 riyals after Saudi Arabia’s largest food producer by market value reported profit that fell short of the median forecast of three analysts compiled by Bloomberg.

“Indicators were overbought to extreme levels,” said Musa Haddad, head trader at the National Bank of Abu Dhabi PJSC’s asset-management group. “This is very healthy in order for the market to gain more strength and continue its move higher. As long as the market sustains above the 7,000 level, then the uptrend is still intact.”

Arabtec fell to 3.29 dirhams, the lowest since April 2. Dubai Islamic lost 1.5 percent to 2.03 dirhams, the lowest since Jan. 26.

The Bloomberg GCC 200 Index (BGCC200) fell 1.1 percent and Qatar’s QE Index (DSM) declined 0.5 percent, while Abu Dhabi’s ADX General Index (ADSMI) was little changed. Kuwait’s gauge rose 0.1 percent, Oman’s benchmark stock index increased 0.3 percent and Bahrain’s measure gained 0.2 percent. In North Africa, Egypt’s EGX30 Index (EGX30) fell 2.2 percent, the fourth day of losses.

Election Confusion

“The market had rallied on catalysts that haven’t come through yet, such as the International Monetary Fund loan and Mobinil’s acquisition by France Telecom,” said Mohamed Radwan, head of international sales at Cairo-based Pharos Holding for Financial Investment. “The confusion surrounding the presidential elections scene is also adding more vagueness to the outlook.”

Egypt is seeking a $3.2 billion loan from the IMF, negotiations for which started in January. France Telecom (FTE) SA reached an agreement in February to buy most of billionaire Naguib Sawiris’s stake in their Cairo-based wireless venture Mobinil. Shares valued at 235 million pounds changed hands today, compared with a daily average of about 448 million pounds since the start of the year.

In Israel, the TA-25 Index (TA-25) slipped 0.7 percent, while the yield on the country’s 5.5 percent notes due January 2022 declined five basis points, or 0.05 percentage point, to 4.63 percent.

To contact the reporters on this story: Zahra Hankir in Dubai at zhankir@bloomberg.net; Ahmed A Namatalla in Cairo at anamatalla@bloomberg.net

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

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