01/07/2010 00:00 AST
Gulf markets extended losses yesterday, with Dubai falling to a 16-month low as overnight losses on US bourses pushed regional investors to sell.
Saudi Arabia’s benchmark fell 0.7% to 6,094 points.
Dubai’s index fell 1.4% to 1,462 points. Abu Dhabi’s measure dropped 0.7% to 2,514 points.
Kuwait’s benchmark fell 0.7% to 6,543 points. Oman’s measure slipped 0.2% to 6,058 points. Bahrain’s index dipped 0.4% to 1,396 points.
Saudi and Omani stocks fell for the sixth session in seven, Kuwaiti shares for the fifth in six.
“It’s still too early to position for Q2 numbers, especially with the inherent volatility,” said Julian Bruce, EFG-Hermes director of institutional equity sales.
Dubai’s index fell to 1,462 points, its lowest close since February 9, 2009. Arabtec dipped 2.8% and Dubai Financial Market lost 2.1%.
“Today was a reaction to the aggressive sell-off on international markets following disappointing economic numbers from China and there’s a lack of interest locally in our markets so they are moving lower,” said Marwan Shurrab, vice-president and chief trader at Gulfmena Alternative Investments.
“China and Asia had been expected to lead growth in 2010, while the Europe and the US were facing problems.”
On Tuesday, a Chinese economic indicator was revised downwards, hitting global sentiment.
Dubai investment bank Shuaa Capital fell 6.3% to a 13-month low after the chief executive of its brokerage arm resigned. Abu Dhabi’s benchmark also declined as Aldar Properties and Sorouh Real Estate lost 3.5 and 4.9% respectively.
“Abu Dhabi real estate stocks are following the high beta names in Dubai - there’s no appetite from long-term investors and short term investors took intraday positions before selling off at the end of the session,” added Shurrab.
Saudi Arabia’s index dropped, but Hesham Abo-Jamee, Bakheet Investment Group head of asset management, said this decline was unjustified.
“Expectations are for Q2 earnings to be good for most companies,” he said. “After the financial statements are issued, investors will again buy stocks and prices should increase, especially in the petrochemicals sector.”
Bakheet forecasts combined Saudi bank profits will rise 8% quarter-on-quarter.
Kuwait’s index dropped to a two-week low as stocks gave up Tuesday’s fleeting gains.
“Even with end-of-quarter window dressing, the market still fell because of what has been happening on global markets, so you can imagine how Kuwait will perform tomorrow, especially with the index breaking a support at 6,600 points,” said a Kuwait analyst who asked not to be named. “The index is heading towards 6,200 to 6,300 points in the near- to medium-term.”
Logistics firm Agility dropped 6% to its lowest level since October 2003. Last week, US prosecutors accused Agility of being a fugitive from justice that had defrauded the US military.
Reuters
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