Dubai shares fell, extending a rout to four days, as rumors surrounding the future of Arabtec Holding Co. (ARTC) added to a selloff after the United Arab Emirates’ central bank issued a warning on property values.
The DFM General Index retreated 0.6 percent to 4,665.24 at the close in Dubai, bringing its decline in the last four days to 8.5 percent. The central bank said June 8 that the country’s real estate market may be overheating. Arabtec, the U.A.E.’s biggest publicly-traded construction company, fell 7.8 percent as some investors said the company may delist, and others that the second-biggest shareholder was selling its stake.
Dubai’s shares have declined 8.3 percent since it was included in MSCI Inc.’s emerging-markets gauge at the start of the month. The U.A.E.’s central bank said rental yields in Dubai and Abu Dhabi had fallen below historical averages as real estate prices rose, indicating the market may be imbalanced.
“There is some profit taking post-MSCI inclusion, and the U.A.E. central bank statement on the property sector hasn’t helped matters,” Nayal Khan, head of institutional sales and trading at Naeem Holding in Dubai, said by phone. “Wildfire rumors about Aabar selling their Arabtec stake” and the company delisting have exacerbated matters further, he said.
Abu Dhabi-controlled Aabar Investments PJSC owns 21.57 percent of Arabtec through its energy, petroleum and real estate investment units, according to data compiled by Bloomberg. Arabtec fell to 4.50 dirhams, the lowest close since April 7.
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