Dubai Stocks Drop to Lowest Since May Amid Emerging-Market Rout
Dubai’s benchmark stock index slumped to its lowest in more than a month, leading declines in the Middle East, amid an emerging-market rout after China signaled it will maintain efforts to curb credit.
The DFM General Index lost 1.9 percent to close at 2,255.97 in Dubai. The measure, the second-best performer this year after Ghana’s among 93 benchmarks tracked by Bloomberg, plunged as much as 5.1 percent as volume fell to about a third the 30-day average. Abu Dhabi’s ADX General Index retreated 1.1 percent.
“The higher you rise the faster you fall,” Mark Watts, head of the National Bank of Abu Dhabi’s asset management group, said by phone today. “The United Arab Emirates has had a stupendous year-to-date performance, so it’s only natural that if people are looking to lighten up on emerging-market exposure they will target the ones that have risen the highest.”
Emerging-market stocks tumbled to a one-year low, with the MSCI Emerging Markets Index falling 1.4 percent at 2:36 pm in Dubai. China’s shares lost the most in four years after the central bank signaled it will maintain efforts to curb speculative lending and Goldman Sachs said a cash squeeze is hurting growth.
Dubai’s measure has retreated 5.7 percent in the last three days. Emaar Properties PJSC (EMAAR), the builder of the world’s tallest tower in Dubai, fell 2 percent today, while Dubai Investments PJSC slid 4.2 percent.
“The fact the market recouped 50 percent of its losses during the session is an encouraging sign that it could find a bottom for the time being,” Fadi Al Said, senior fund manager at ING Investment Management in Dubai, said by e-mail. “Emerging market and international managers are locking in profits made in the U.A.E. markets after a great performance.”
Dubai’s benchmark is still up 39 percent this year, while Abu Dhabi’s benchmark has rallied 34 percent.
Elsewhere in the Middle East, Saudi Arabia’s Tadawul All Share Index (SASEIDX) fell 0.7 percent. Oman’s MSM30 Index dropped 0.9 percent, Kuwait’s SE Price Index declined 1.6 percent, Bahrain’s measure lost 0.4 percent and Qatar’s QE Index retreated 0.6 percent.
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