Dubai Shares Fall to Lowest in 3 Weeks on Oil Decline

05/05/2011 00:00 AST

Dubai shares fell to the lowest level in three weeks, leading a decline in Persian Gulf stocks, as Air Arabia (AIRARABI) reported a drop in first-quarter earnings and oil retreated for a fourth day.

Air Arabia, the Middle East’s biggest low-cost airline, tumbled to the lowest on record. Emaar Properties PJSC (EMAAR), the builder of the world’s tallest skyscraper in Dubai, fell to the lowest level in a month. The benchmark DFM General Index retreated 0.7 percent to 1,607.29 at the 2:00 p.m. close in the emirate, the lowest since April 13. The measure has lost 1.6 percent this week. The Bloomberg GCC200 Index, which tracks 200 companies in the region, dropped 0.2 percent.

“We have reached the end of the earnings season and the market is lacking conviction,” said Mahdi Mattar, head of research at Abu Dhabi-based CAPM Investment PJSC. “Investors don’t see any strong catalyst to push them to accumulate more.”

Dubai’s gauge rallied 19 percent from a low on March 3, driven in part by optimism that the United Arab Emirates will secure an upgrade to emerging market status at index provider MSCI Inc. The U.A.E. stock exchanges last week delayed the implementation of a new settlement system until May 29. The so- called delivery-versus-payment is one of MSCI’s criteria for an upgrade.

Oil declined for a fourth day in New York, the longest losing streak in almost eight weeks, as a drop in gasoline consumption added to signs of slowing growth in the U.S. economy, the world’s biggest crude consumer. Crude for June delivery lost as much as $3.04 to $106.20 a barrel in electronic trading on the New York Mercantile Exchange.

Air Arabia dropped 1.6 percent to 73 fils. First-quarter net income retreated to 42.7 million dirhams ($11.6 million) from 49.6 million dirhams a year earlier. Emaar declined 1.5 percent to 3.19 dirhams, the lowest level since April 6.

Abu Dhabi’s ADX General Index (ADSMI) dropped 0.1 percent, Qatar’s index fell 0.5 percent and Bahrain’s BB All Share Index dropped 0.2 percent. Oman’s gauge gained 0.1 percent. Saudi Arabia’s exchange is closed for the weekend.

Bloomberg