Dubai Stocks Sink to 2-Month Low as Syria Spurs Regional Selloff
The benchmark DFM General Index tumbled 2 percent to 2,324.54, the lowest close since July 7 and the second-biggest decline among 94 global indexes monitored by Bloomberg. Abu Dhabi’s gauge lost 1.4 percent and the Bloomberg GCC 200 Index of regional stocks decreased 0.3 percent. Emirates NBD PJSC (EMIRATES), the United Arab Emirates’ biggest bank, retreated the most in almost two weeks, while First Gulf Bank PJSC (FGB) fell to a three-month low.
Dubai’s equity index has fallen 7.9 percent this month as President Barack Obama tries to persuade Congress to support air strikes against Syria over a chemical attack. Investors have are selling shares in one of the world’s five best-performing equity indexes this year amid concern a conflict would affect Dubai’s trade and tourism industries.
“It’s a continuation of investors’ nervousness to the political developments in Syria and profit taking,” Tariq Qaqish, a director at Dubai-based fund manager Al Mal Capital PSC, said by e-mail today.
Syrian President Bashar al-Assad said the U.S. should “expect every action” in retaliation if it proceeds with limited military strikes.
The DFM, which has posted the biggest price swings in the world in the past month, is up 43 percent in 2013. The emirate earned safe-haven status among investors after being unaffected by uprisings that spread through the Middle East since 2011. Wholesale and retail trade in Dubai, which account for almost a third of the economy, grew at the fastest pace in five years in 2012, according to government data.
Emirates NBD fell 5.6 percent, the most since Aug. 27, to 4.9 dirhams, trimming a rally this year to 72 percent. First Gulf Bank, the lender controlled by Abu Dhabi’s ruling family, slid 2 percent to 14.6 dirhams, the weakest since May 28.
Elsewhere in the region, Qatar’s QE Index (DSM) retreated 1.2 percent, Oman’s benchmark gauge fell 1.1 percent and Bahrain’s BB All Share Index (BHSEASI) lost 0.2 percent. Kuwait’s benchmark index was little changed while Saudi Arabia’s Tadawul All Share Index (SASEIDX) advanced 0.1 percent, after earlier tumbling 0.9 percent.
To contact the reporters on this story: Arif Sharif in Dubai at firstname.lastname@example.org
To contact the editor responsible for this story: Claudia Maedler at email@example.com