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Dubai’s Shares Extend Loss on Bets Rally Overdone; Qatar Gains

Dubai Financial Market
A visitor holds prayer beads as he watches financial data on screens inside the Dubai Financial Market in Dubai, United Arab Emirates. Photographer: Duncan Chard/Bloomberg

Nov. 17 (Bloomberg) -- Dubai’s benchmark stock index fell, extending the declines of the past two weeks, on concern this year’s rally may be overdone. Shares in Qatar rose.

The DFM General Index lost 0.4 percent to 2,813.1 at the close in the emirate, paring the gain for the year to 73 percent. Deyaar Development PJSC, a builder of residential towers in the emirate, declined for a fifth time in six days. Investment bank Shuaa Capital PSC retreated to its lowest in more than a month and Dubai Investments PJSC dropped 1.4 percent. Qatar’s QE Index climbed 0.7 percent and Israel’s TA-25 Index advanced 0.9 percent at the close in Tel Aviv.

Dubai’s benchmark index is among the five best-performing gauges tracked by Bloomberg globally this year as the emirate’s real-estate industry rebounds from a more than 60 percent decline in home prices. A decision on Dubai’s bid to host the World Expo in 2020 will be announced Nov. 27, with investors expecting a win to boost economic activity. Dubai’s measure trades at an estimated price-to-earnings multiple of 14.6 compared with 11.7 for the MSCI Emerging Markets Index.

“Dubai’s gains for the year have been substantial, so it’s no surprise to see some investors book their gains ahead of an event like the Expo 2020 decision,” Amer Khan, a director at Dubai-based Shuaa Asset Management which had 780 million dirhams ($212 million) under management at the end of September, said by e-mail. “Some others may choose to wait before deploying further capital.”

Expo Expansion

Deyaar declined 1.6 percent, the most in almost a week, to 68.5 fils and Shuaa, a bank controlled by Dubai’s ruler, dropped 3.6 percent to 89 fils. Dubai Investments, which owns stakes in more than 40 companies, slid to 2.1 dirhams.

Dubai’s economy, the second-biggest among the seven sheikhdoms that make up the U.A.E., is set to expand an average 4.6 percent a year between 2012 and 2015, more than twice the rate of the previous four years, according to government forecasts. Annual economic growth will be boosted by about 0.5 percentage points in the run-up to the Expo and by about 2 percentage points during the event should Dubai be selected, Bank of America Merrill Lynch said Sept. 23.

Abu Dhabi’s ADX General Index fell 0.1 percent, while Oman’s benchmark was little changed. Kuwait’s index gained 0.1 percent and Saudi Arabia’s Tadawul All Share Index increased 0.8 percent.

Egypt’s benchmark EGX 30 Index climbed 0.8 percent, rising after two days of losses. Upper Egypt Contracting Co. was the biggest gainer, jumping 7 percent.

Standard & Poor’s raised Egypt to B- from CCC+ on Nov. 15, citing reduced pressure on balance of payments because of foreign aid. Pro- and anti-government groups have called for rallies on Nov. 19, the second anniversary of clashes between protesters and security forces that left dozens dead.

Coffee Exit

In Tel Aviv, Israel Chemicals Ltd. advanced 3.5 percent to 30.12 shekels and Strauss Group Ltd. gained 2.4 percent after daily TheMarker reported the company has picked bankers for the sale of its coffee unit. A spokeswoman for Strauss said there was no decision on the matter yet.

The yield on Israel’s benchmark bonds due March 2023 slipped one basis point, or 0.01 percentage point, to 3.53 percent. Israeli economic growth slowed more than expected to 2.2 percent in the third quarter as industrial exports and tourism fell.

To contact the reporter on this story: Arif Sharif in Dubai at asharif2@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

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