Dubai Stocks Drop Most Since April on Growth Slowdown ConcernSherine El Madany
Dubai’s benchmark index declined the most in more than a month on concern slower global economic growth may hurt company earnings.
Emaar Properties PJSC, the developer of the world’s tallest building, retreated to the lowest in more than a week. Dubai Islamic Bank PJSC, the United Arab Emirates’ largest Shariah-compliant lender, decreased the most since May 9. The DFM General Index lost 1.1 percent to 2,281.27 at the close in the emirate, bringing the two-day drop to 1.8 percent. Abu Dhabi’s benchmark fell 1 percent. The declines pared the gauges’ gains this year to 41 percent and 30 percent, respectively
The MSCI Emerging Markets Index lost 1.8 percent last week, the most since the week ended April 5, after Chinese manufacturing contracted for the first time in seven months and amid concern the Federal Reserve will scale back asset purchases. The economy of Dubai, home to the world’s biggest airline by international traffic, is underpinned by trade, tourism and real-estate.
The Chinese data and the Fed comments are “the catalysts for the decline in the U.A.E. markets,” said Sebastien Henin, Abu Dhabi-based portfolio manager at The National Investor. “We are still in a cycle of profit takings.”
Dubai’s and Abu Dhabi’s benchmarks are among the 10 best performing this year of 94 gauges tracked globally by Bloomberg.
Emaar lost 1.6 percent to 5.72 dirhams, the lowest price since May 14, and Dubai Islamic Bank decreased 2.5 percent. Abu Dhabi-based First Gulf Bank PJSC dropped 3.1 percent to 13.95 dirhams after Kuwait-based Global Investment House cut the bank to hold. The bank was the biggest decliner by index points on the emirate’s benchmark.
Elsewhere in the Middle East, Kuwait’s SE Price Index advanced 2.1 percent, taking this year’s rally to 40 percent. Qatar’s QE Index rose 0.4 percent, Oman’s MSM30 Index increased 0.2 percent and Bahrain’s gauge climbed 0.9 percent. Saudi Arabia’s Tadawul All Share Index declined 0.2 percent and Egypt’s EGX 30 dropped 0.8 percent.
Israel’s TA-25 Index gained 0.7 percent. The yield on the nation’s benchmark 4.25 percent bonds maturing in March 2023 rose one basis point, or 0.01 of a percentage point, to 3.57 percent.