Dubai Stocks Fall Most in Two Weeks on Concern Gains Overdone
Dubai’s benchmark stock index dropped the most in more than two weeks on concern a rally this quarter, prompted by an economic recovery in the emirate, was overdone.
Dubai Islamic Bank PJSC, (DIB) the United Arab Emirates’ biggest Shariah-compliant lender, fell 1 percent, trimming the surge in the second quarter to 47 percent. Air Arabia PJSC (AIRARABI) lost the most since March 31. The DFM General Index retreated 0.9 percent, the most since April 18, to 2,149.53 at the close in Dubai. The measure climbed to the highest since November 2009 yesterday.
Today’s drop pared the DFM’s gain this quarter to 18 percent, the best performance among 94 indexes tracked by Bloomberg globally. Shares on Dubai’s benchmark trade at a price-to-book value of 0.9 times, the highest level in more than three years. The gauge’s 14-day relative strength index fell to 75 today from 81. A reading above 70 indicates to some analysts that a security or index is poised to retreat.
The decline is due to “expected profit-taking activities after the market reached new highs for the year,” said Marwan Shurrab, fund manager and chief trader at Gulfmena Investments Ltd. in Dubai. “Over all, the market is moving in a bullish formation and I would expect further upside.”
The second-biggest sheikhdom in the U.A.E. is recovering from a property crash and a debt crisis helped by a rebound in tourism, trade and retail. Dubai’s economy is set to expand 4.6 percent, on average, between 2012 and 2015, more than twice the growth of the previous four years, according to government forecasts.
Shares with a combined value of 473 million dirhams ($129 million) traded today, compared with a three-month daily average of 330 million dirhams.
Dubai Islamic Bank retreated to 2.96 dirhams, while Air Arabia, the region’s biggest budget airline, decreased 3 percent to 99.9 fils. The shares surged 26 percent in April.
Elsewhere in the Middle East, Saudi Arabia’s Tadawul All Share Index lost 0.2 percent. Benchmarks in Abu Dhabi and Bahrain gained 0.4 percent, Oman’s rose 0.2 percent and Qatar’s 0.6 percent. Kuwait’s gauge was little changed.
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