Dubai Stocks Drop Most in Emerging Markets as Real Estate SlidesSarmad Khan
Dubai stocks retreated the most in emerging markets after profit at developer Union Properties PJSC plunged, helping spark a selloff in real estate companies.
The emirate’s DFM General Index slid 1.8 percent, the sharpest drop since May 3, to close at 4,071.58. Union Properties, Dubai’s second-largest developer by market value, slumped 9.7 percent, the most this year. The DFM Real Estate and Construction Index dropped 2.5 percent, the most in more than a week.
Real estate sales in Dubai, which recovered from one of world’s worst property slumps during the financial crisis, declined 31 percent in the first four months of 2015 from a year earlier, according to Dubai Land Department data. First quarter profit at Union Properties fell 84 percent to 28 million dirhams ($7.6 million) as other income dropped. The company last year reported a saving of 100 million dirhams in the period as it settled liabilities with contractors.
“Union Properties has triggered the push down today in the market, in particular in property and constructions stocks,” Wadah Al Taha, the Dubai-based chief investment officer of Al Zarooni Group, said by phone today. “Union Properties’ results are not as bad as it seems if you eliminate last year’s saving. It’s more of a big number perception. And the reports of a decline in property sales in Dubai are also casting a negative shadow.”
Emaar Properties PJSC, which has the biggest weighting on Dubai’s gauge, slipped the most in a week and Arabtec Holding Co., the United Arab Emirates’ largest builder, fell the most in almost seven weeks. Emaar lost 1.4 percent and Arabtec dropped 4.8 percent.