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Dubai’s Stocks Retreat Most in a Year on Bets Rally Overdone

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March 6 (Bloomberg) -- Dubai’s benchmark stock index retreated the most in more than a year, led by Arabtec Holding Co., to become the world’s worst-performer amid speculation this year’s rally was overdone.

Arabtec, the biggest construction company in the United Arab Emirates that surged 104 percent so far this year, slumped 7.1 percent. Dubai Financial Market PJSC, the only publicly traded Gulf Arab stock market, declined the most since January. The DFM General Index fell 3.7 percent, the most since February 2011 and the worst among 93 global indexes tracked by Bloomberg, to 1,689.18 at the 2 p.m. close in the emirate.

“Investors are booking some of their profits on the Dubai Financial Market after a series of good performance,” said Samer Darwiche, a Dubai-based analyst at Gulfmena Investments.

Dubai’s stocks have soared 25 percent so far this year after companies reported improved earnings and dividends. That compares with a 7.7 percent increase in the Bloomberg GCC 200 Index. Arabtec has rallied on speculation investors are accumulating the shares, betting the company will benefit from regional infrastructure spending. The shares fell the most since March 2011 to 3.25 dirhams.

Aabar Investments PJSC, the Abu Dhabi government company which owns stakes in Daimler AG and UniCredit SpA, increased its ownership in Arabtec to 5.28 percent, according to data posted on Dubai’s stock market. The shareholding is listed under Aabar Petroleum Investments Co., which in 2008 sold most of its energy assets to Mubadala Development Co., an investment company owned by the Abu Dhabi government.

Du Declines

The value of shares traded in Dubai declined to about 844 million dirhams ($230 million) today after jumping to 981 million dirhams yesterday. That was the highest since April 2010, according to data compiled by Bloomberg.

In Europe, the Stoxx Europe 600 Index decreased 1.5 percent in London as investors weighed prospects for private-creditor participation in Greece’ debt restructuring. U.S. index futures and Asian shares also dropped.

Dubai Financial Market, which yesterday surged 4.2 percent, declined 6.5 percent, the most since Jan. 16, to 1.16 dirhams.

Emirates Integrated Telecommunications Co. decreased for a second day, falling 1.9 percent to 3.12 dirhams. The U.A.E.’s second-biggest phone company said full-year profit dropped 16 percent as royalty to the government increased and that it plans to pay its first dividend.

Qatar’s QE Index fell 0.7 percent and Abu Dhabi’s ADX General Index dropped 0.6 percent. Saudi Arabia’s Tadawul All Share Index added 0.5 percent in its 14th day of gains at 2:47 p.m. in Riyadh, the longest winning streak since August 2005. The Kuwaiti gauge and Bahrain’s BB All Share Index advanced 0.4 percent. Oman’s MSM 30 Index fell 0.1 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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