Emaar heads losers as Dubai dips for 3rd day
Dubai, September 6, 2011
Dubai's index declined for a third day, extending year-to-date losses as some investors looked to cut positions following more turmoil on international markets on Tuesday.
The emirate's benchmark slipped 0.4 per cent to 1,474 points to leave it down 9.7 per cent in 2011 as losers outnumbered gainers nine to one.
'UAE markets are pretty much following what's happening globally - there may be the odd spike based on individual company news, but these will be short-lived,' remarked Hashem Montasser, managing partner at Frontlane Capital, a Dubai-based asset management firm.
In the early trading, Air Arabia dropped 0.5 per cent, Emaar Properties slid 1.1 per cent and Dubai Financial Market lost 0.9 per cent.
The only gainer was Takaful Emarat Insurance, the second-smallest stock on the index with a market value of $25 million, which rose 2.9 percent.
Unlike most global and emerging markets, Dubai's index had made little recovery since the financial crisis and is presently 77 per cent below a 2008 peak as the emirate's own debt woes and real estate price crash has sent the property-dominated bourse into freefall.
'There has been a prolonged bear market,' said Walid Shihabi, Shuaa Securities chief executive.
To turn around, the bourse first needs a more benign international backdrop and then for listed firms to outperform their peers on emerging markets, Shihabi explained, while liquidity will also need to improve dramatically.
Trading slumped to six-year low in 2010, with little improvement this year.
'The composition of the market, especially in the UAE, doesn't help - there isn't enough representation of the real economy on which we're seeing good news on,' added Shihabi.
Tarik Lotfy, Arqaam Capital Head of Mena equities, says these sustained declines mean UAE markets have limited further downside, but lack catalysts to spur a rally.
'Risk-reward for UAE and Qatar markets looks interesting,' says Lotfy.
'We are over-sold and under-owned - there has been a lot of selling over the past couple of months and those who want to exit have done so. The question is when the next round of buying will happen.'
Abu Dhabi's benchmark edges up 0.07 per cent to 2,605 points, despite losers outnumbering gainers eight to zero, with the bourse's use of volume weight average pricing creating this anomaly.
Aldar Properties and Sorouh Real Estate accounted for about two-thirds of shares traded and fell 1.6 and 1.7 per cent respectively.
Asian shares and the euro fell on Tuesday, gold jumped to a fresh record while European stocks appear set to slide further on fears that Europe's sovereign debt troubles are worsening and could trigger a second full-blown banking crisis.-Reuters