Abu Dhabi Stocks Drop for a Fourth Week on Greek Debt Concern
Abu Dhabi Islamic Bank PJSC (ADIB), the United Arab Emirates’ second-biggest Shariah-compliant lender, slumped as much as 1.9 percent. First Gulf Bank PJSC (FGB), a lender controlled by Abu Dhabi’s ruling family, tumbled the most since March. Abu Dhabi’s ADX General Index (ADSMI) fell 0.4 percent, the biggest drop since April 19, to 2,464.68 at the 2 p.m. close in the emirate. The measure slipped 0.1 percent this week and is down 1.6 percent this month.
“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.”
Persian Gulf shares have declined, with the Bloomberg GCC 200 Index (BGCC200) falling 4.5 percent the past month, 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.
Global markets slipped before the U.A.E. markets closed, with the MSCI AC Asia Pacific Index (MXAP) declining as much as 0.6 percent before trimming the drop, while the STOXX Europe 600 Index fell as much as 0.3 percent before rebounding. The index gained 1 percent at 3:15 p.m. in Dubai.
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.
“The Chinese economy is legitimately struggling, and Europe’s Greek tragedy, which is already a financial-systemic risk headache for investors, is now morphing into a macro headwind as euro-zone growth is grinding to a halt,” said Dubai-based Akram Annous, Middle East and North Africa equity strategist at Rasmala Investment Bank Ltd. “Put these things together, and you don’t exactly have a risk conducive environment for equity oriented investors.”
Volumes have slumped in the U.A.E., with about 57 million shares traded in Dubai today, compared with this year’s March 5 peak of 835 million. In Abu Dhabi, about 31 million shares were traded today, compared with a 12-month daily average of 62 million.
Abu Dhabi Islamic tumbled to 3.10 dirhams before closing 0.3 percent lower at 3.15 dirhams. First Gulf Bank lost 1.6 percent, the most since March 20, to 8.77 dirhams.
Dubai’s DFM General Index (DFMGI) was little changed and the Bloomberg GCC 200 Index slipped 0.1 percent. Kuwait’s measure fell 0.4 percent, Qatar’s QE Index (DSM) decreased less than 0.1 percent and Oman’s MSM30 Index (MSM30) retreated 0.2 percent. Bahrain’s measure gained 0.7 percent, snapping a five-day drop. Saudi Arabia (SABIC)’s market was closed for the weekend.
To contact the reporter on this story: Zahra Hankir in Dubai at email@example.com
To contact the editor responsible for this story: Claudia Maedler at firstname.lastname@example.org