Dubai Shares Drop to 3-Month Low on Greek Crisis, Oil Decline
Dubai’s shares fell to the lowest in three months, following Asian and European markets, as talks to form a new Greek government failed and oil tumbled.
Arabtec Holding PJSC (ARTC), the United Arab Emirates’ biggest publicly traded construction company, dropped 2.4 percent, while Emaar Properties PJSC (EMAAR), developer of the world’s tallest skyscraper, retreated the most since May 14. The DFM General Index (DFMGI) declined 1.6 percent to 1,463.21, the lowest intraday level since Feb. 8, at 12:19 p.m. in the emirate. The Bloomberg GCC 200 Index (BGCC200) slipped 0.8 percent.
Asian and European markets fell, adding to losses in the U.S., amid deepening speculation Greece will have to leave the euro-currency bloc. New elections in Greece may be scheduled as early as June 10 after President Karolos Papoulias failed to broker a governing coalition in meetings yesterday with Pasok party head Evangelos Venizelos and other political leaders.
The drop “was expected due to the uncertainty in Greece, which is affecting international markets as a whole,” said Marwan Shurrab, vice-president at Gulfmena Investments Ltd. “Commodities have been losing ground, down almost 12 percent this month, which is affecting sentiment to a certain extent as they reflect the surpluses of the governments in the region.”
Oil slid after U.S. crude stockpiles increased and on concerns over Europe. Crude for June delivery decreased as much as 2.3 percent to $91.81 a barrel in electronic trading on the New York Mercantile Exchange, the lowest intraday price since Nov. 3. Gulf Arab oil exporters, including Saudi Arabia and the U.A.E., supply about a fifth of the world’s oil.
Dubai’s benchmark index has dropped 17 percent from this year’s peak in March, leaving the 31 companies on Dubai’s index valued at 9.7 times estimated earnings compared with 12 times for Saudi Arabia’s Tadawul All Share Index (SASEIDX), according to data compiled by Bloomberg. The kingdom’s measure lost 1 percent.
Arabtec decreased to 2.85 dirhams, set for the lowest close since May 13. Emaar declined 1.7 percent to 2.89 dirhams.
About 48 million shares traded in Dubai so far today, compared with this year’s peak of 835 million.
Elsewhere in the six-nation Gulf Cooperation Council, Qatar’s QE Index (DSM) decreased 0.8 percent, Abu Dhabi’s ADX General Index (ADSMI) fell 0.3 percent, while Bahrain’s and Kuwait’s measures were little changed. Oman’s benchmark stock index rose 1.1 percent after declining 1.2 percent yesterday.
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