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Abu Dhabi’s Shares Retreat on Speculation 11-Day Rally Overdone

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March 5 (Bloomberg) -- Abu Dhabi’s benchmark stock index retreated for the first time in 12 days amid speculation a rally spurred by improved earnings at the emirate’s companies and infrastructure spending plans was overdone.

Abu Dhabi Commercial Bank PJSC, the United Arab Emirates’ third-biggest bank, dropped 1.5 percent. First Gulf Bank PJSC, which is controlled by Abu Dhabi’s ruling family, fell the most in seven weeks. The ADX General Index decreased 0.6 percent, the first decline since Feb. 16 and the most since Jan. 17, to 2,625.42 at the 2 p.m. close in the emirate. The measure advanced 6.7 percent in the eleven days through yesterday. Dubai’s DFM General Index was little changed.

“We expected there to be some profit-taking after such a strong rally,” said Ziad Dabbas, a financial analyst at National Bank of Abu Dhabi PJSC, the U.A.E.’s second-biggest bank by assets. “We have mainly seen speculators in the market and we do need to see some long-term investors come in, that may happen gradually.”

Abu Dhabi’s shares have advanced since the government said in January it plans to resume real-estate projects after reviewing their viability and as corporate earnings improved. The emirate’s gauge is up 9.3 percent this year, compared with an 8.2 percent gain in the Bloomberg GCC 200 Index of Persian Gulf stocks.

Abu Dhabi Commercial, which rallied 2.8 percent yesterday, fell the most since Jan. 30 to 3.27 dirhams. The bank said in January fourth-quarter profit climbed 39 percent as it gained from lending and reduced provisions. First Gulf retreated 1.9 percent, the most since Jan. 16, to 21.1 dirhams.

The Bloomberg GCC 200 Index and Qatar’s QE Index fell 0.2 percent. Saudi Arabia’s Tadawul All Share Index increased less than 0.1 percent, its 13th day of gains. Bahrain’s gauge climbed 0.4 percent. Oman’s MSM30 Index advanced 0.4 percent, its ninth day of gains and the longest winning streak since March 2010. Kuwait’s gauge climbed 0.2 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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