Dubai’s shares fell to the lowest level in more than two months as Arabtec Holding Co. tumbled and unrest in Iraq escalated.
The DFM General Index dropped 3.1 percent to 4,468.67, the lowest since March 31, at the close. The gauge, which retreated as much as 5.2 percent during the day, was the the worst performer among more than 90 tracked globally by Bloomberg. Arabtec slid 10 percent, the maximum allowed, and Emaar Properties PJSC, the stock with the biggest weighting on the measure, retreated 3.2 percent.
Arabtec shares sank to 4.05 dirhams, the lowest since March 25 and a 45 percent decline from a record 7.40 dirhams on May 14. The shares closed 10 percent lower yesterday as the Dubai Financial Market website showed Abu Dhabi-controlled Aabar Investments PJSC had reduced its holding in the company to 14.32 percent from 18.85 percent. The website later updated the stake to 18.94 percent and blamed a “temporary system glitch” for the error. Aabar last week cut its ownership from 21.57 percent.
“Arabtec is adding to negative sentiment in the market and no one understands what’s going on here,” Hisham Khairy, the Dubai-based head of institutional trade at Mena Corp. Financial Services LLC, said in a note to investors today.
Chief Executive Officer Hasan Ismaik told Al Arabiya Television today there are no disputes with Aabar’s management, and he has no plans to further raise his stake in the construction company. Ismaik tripled his holding in Arabtec to 28.84 percent this year, data compiled by Bloomberg show.
Iraqi Prime Minister Nouri al-Maliki’s Shiite Muslim-led government is seeking to regain control over territory held by breakaway al-Qaeda group, Islamic State in Iraq and the Levant, whose advances put in doubt his rule over a unified Iraq. Sectarian strife is pushing OPEC’s second-largest oil producer closer to civil war, three years after the U.S. withdrew its forces from the country.
“The Iraq situation is not helping and it’s stopping people from putting new liquidity in the market,” Mohammed Ali Yasin, managing director of NBAD Securities LLC, said by telephone from Abu Dhabi today. “We are seeing some really good prices but people are not coming in.”
The price of Iraq’s 2028 government bond fell 2 percent to 88.4 cents as of 2:03 p.m. in Baghdad, sending the yield 23 basis points, or 0.23 of a percentage point, higher to 7.15 percent.
Abu Dhabi’s ADX General Index fell 1 percent and Qatar’s QE Index slumped 1.7 percent. Kuwait’s SE Price Index retreated 0.5 percent and Saudi Arabia’s Tadawul All Share Index slid 1 percent to 9,628.24 at 1:49 p.m. in Riyadh.
The estimated price-earnings ratio of Dubai’s DFM General Index has declined to 15.5 from 18 at the end of last month, according to data compiled by Bloomberg. The gauge has slipped 17 percent since the peak on May 6 this year.
Emaar shares dropped to 9.05 dirhams, the lowest since April 6.
Of the regularly traded shares in Dubai’s 30-member main index, only four traded above their 50-day moving average price yesterday, compared with 23 in December, according to data compiled by Bloomberg.