Abu Dhabi Stocks Head for Biggest Drop in a Month on Europe
Abu Dhabi shares were set for the biggest drop in more than a month after German business confidence fell more than economists forecast damping the outlook for Europe’s debt crisis.
Abu Dhabi Islamic Bank PJSC (ADIB), the United Arab Emirates’ second-biggest Shariah-compliant lender, slumped 1.9 percent. In neighboring Dubai, Air Arabia PJSC (AIRARABI) declined for a second day. Abu Dhabi’s ADX General Index (ADSMI) decreased 0.4 percent, headed for the biggest drop since April 19, to 2,465.09 at 1:11 p.m. in the emirate. The measure has slipped 0.1 percent this week. Dubai’s DFM General Index (DFMGI) and the Bloomberg GCC 200 Index (BGCC200) fell 0.1 percent.
“Full attention is on Europe, at least leading to the next election in Greece next month,” said Ibrahim Masood, who helps manage about $400 million at Mashreqbank PSC. (MASQ) “There’s not a lot of news flow to expect domestically for the next several weeks.”
The MSCI AC Asia Pacific Index (MXAP) slipped 0.2 percent and futures on the Standard & Poor’s 500 Index (SPX) gauge lost 0.1 percent after German business confidence fell in May and French confidence declined for a second month. In Asia, China’s manufacturing may shrink for a seventh month, a private survey showed, reinforcing the need for stimulus as Premier Wen Jiabao accelerates a shift in policy to support growth.
Dubai’s measure has dropped 16 percent from this year’s high on March 5 amid investor concern that Greece may abandon the euro and put other debt-stricken nations such as Italy and Spain at risk. Greece is scheduled to hold a second election on June 17 following an inconclusive ballot this month.
Volumes have slumped in the U.A.E., with about 42 million shares traded in Dubai today, compared with this year’s March 5 peak of 835 million. In Abu Dhabi, about 23 million shares were traded so far today, compared with a 12-month daily average of 62 million.
Abu Dhabi Islamic headed for the biggest drop since April 12 as it fell to 3.10 dirhams. Air Arabia, the Middle East’s biggest discount airline, lost 0.8 percent to 59.6 fils, the lowest intraday level since May 21.
Kuwait’s measure fell 0.4 percent, Qatar’s QE Index (DSM) decreased 0.2 percent and Oman’s MSM30 Index (MSM30) dropped 0.2 percent. Bahrain’s measure rose 0.2 percent, while Saudi Arabia (SABIC)’s market was closed for the weekend.
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