Dubai Stocks Fall Most in a Month on Concern Rally Is OverdoneSherine El Madany
Dubai shares declined the most in more than a month on investor bets gains this year are overdone and as stocks in Europe and Asia retreated from a five-year high. Abu Dhabi’s gauge also decreased.
Emaar Properties PJSC, the developer of the world’s tallest building, slid the most in more than four weeks. Emirates NBD PJSC, the United Arab Emirates’ second-biggest bank by assets, lost 1.6 percent. Dubai’s benchmark DFM General Index dropped 0.9 percent, the most since April 18, to 2,319.35 at the close in the emirate. The measure is still up 43 percent this year and two days ago closed at the highest since October 2009. Abu Dhabi’s benchmark declined 0.4 percent, trimming the gain for the year to 33 percent.
Shares on Dubai’s benchmark trade at an average price-to-book value of 0.94, the highest since 2009, and compared with 0.69 at the end of last year. In Europe, the Stoxx Europe 600 Index slipped 0.5 percent at 12:24 p.m. in London, as remarks by a Federal Reserve official fueled concern the central bank may reduce stimulus measures.
“The pullback stems from a combination of profit taking and a generally heightened sense of risk aversion on the back of the decline we’ve seen in global equity markets,” said Gus Chehayeb, director of Middle East and North Africa research at investment bank Exotix Ltd.
Emaar fell 1.7 percent to 5.87 dirhams and Emirates NBD declined to 5.70 dirhams. The shares this year surged 57 percent and doubled, respectively.
Arabtec Holding Co. lost for a second day, decreasing 0.8 percent to 2.37 dirhams after a group of the company’s construction workers striked this week. Arabtec said today the walkout won’t affect project delivery time lines and that it’s working with the U.A.E. Ministry of Labour, Dubai Police and security authorities to resolve it.
In Abu Dhabi, Sorouh Real Estate Co. dropped 0.4 percent and First Gulf Bank PJSC fell 1 percent.