Dubai Shares Drop a Third Day on Global Rout; Abu Dhabi Gains

Dubai’s benchmark stock index fell for a third day, tracking a global equities rout that triggered more than $6 billion of redemptions from emerging markets last week. Abu Dhabi’s measure advanced.

The DFM General Index dropped 0.4 percent to 3,754.43, the lowest close since Jan. 27. The gauge has still almost doubled in the past 12 months, making it one of the world’s best performing benchmarks tracked by Bloomberg. Emaar Properties PJSC, the builder with the highest weighting on the benchmark, lost the most since Jan. 29 and Dubai Islamic Bank retreated 1.2 percent. Abu Dhabi’s measure rose 0.4 percent.

Global equities declined last week as the U.S. Federal Reserve cut stimulus for a second month. Emerging market equity funds posted net outflows of $6.33 billion, the biggest weekly drop in almost three years, according to EPFR Global data. The MSCI Emerging Markets Index has declined 6.6 percent this year, while the Standard & Poor’s 500 Index has dropped 3.6 percent.

“There is always a correlation between the United Arab Emirates and international markets and the level of correlation becomes higher when we have a significant event like Fed Policy decision,” Tariq Qaqish, who oversees the equivalent of $136 million as head of asset management at Dubai-based Al Mal Capital PSC, said in an e-mailed response to questions.

Arabtec Gains

On the heels of the Fed decision, central banks in Europe will probably maintain a steady course this week. The European Central Bank and the Bank of England will hold their key rates at record lows, according to economists surveyed by Bloomberg.

Emaar fell 1.4 percent to 7.89 dirhams, while Dubai Islamic Bank, the emirate’s largest Shariah-compliant lender, dropped to 5.87 dirhams.

Arabtec Holding PJSC climbed 2.8 percent to the highest since September 2008 after winning a 22.4 billion-dirham ($6.1 billion) contract from Aabar Investments PJSC. In addition, Aabar plans to award Arabtec, the U.A.E.’s largest publicly traded contractor, $20 billion of deals in countries including the U.S., Egypt, Morocco and Serbia.

The contract awarded is “more than 50 percent of its backlog, which is completely unheard of,” said Nayal Khan, head of institutional sales and trading at Naeem Holding in Dubai.

Egypt’s EGX 30 Index gained for a fifth day, advancing 0.4 percent to 7,436.22, the highest close since April 2010. The measure jumped 9.2 percent last month.

Saudi Arabia’s Tadawul All Share Index advanced 0.9 percent, the most since Dec. 8. Oman’s benchmark gained 0.1 percent, Qatar’s added 0.2 percent and Kuwait’s climbed 0.7 percent. Bahrain’s gauge slipped 0.2 percent.

Israel’s TA-25 Index was little changed at 2:40 p.m. in Tel Aviv. The yield on the government’s benchmark bond due in March 2023 rose one basis point, or 0.01 of a percentage point, to 3.53 percent.

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