01/Nov/2009
Bloomberg
Dubai shares tumbled the most since mid-August, leading indexes in the region lower, as Shuaa Capital PSC reported a loss and Emaar Properties PJSC retreated to its lowest level in almost three months.
Shuaa, the U.A.E.’s biggest investment bank, tumbled the most in more than four months after posting a third-quarter loss. Emaar, the country’s biggest developer, fell to the lowest since Aug. 17 after the chairman of Dubai Properties LLC, a company which Emaar plans to merge with, was arrested on suspicion of embezzlement. Dubai’s index dropped 4.8 percent to 2,091.83 at 12:21 p.m. in the emirate. Abu Dhabi’s measure fell 2.9 percent, poised for its biggest one-day loss since June 23.
Gulf markets are struggling to recoup last year’s losses as the global financial crisis prompted investors to pull out of the region following the delay and cancellation of projects. A U.S. consumer-spending report released last week sparked concern a global recovery may be protracted. Dubai’s index is up 28 percent after falling 72 percent last year. Abu Dhabi’s index, which slid 47 percent in 2008, has gained 23 percent this year.
“Obviously we’re seeing some weakness imported from U.S. and emerging markets, but in our markets there’s a slight shift in investor psychology,” said Rabih Sultani, a fund manager at Duet Mena Ltd. “By the end of this year, people will go back to the old tedious job of looking closely at earnings, consumer spending, sales growth. We should see some continued volatility until then.”
The U.S. Commerce Department said that consumer spending slipped 0.5 percent in September, while another report showed a gauge of confidence weakened in October, helping end a streak of seven monthly gains for the Standard & Poor’s 500 Index. Crude on Oct. 30 fell the most in a month.
Shuaa, Emaar
Shuaa dropped 9.7 percent to 1.77 dirhams, poised for its lowest close since Aug. 30. The company reported a loss of 269.3 million dirhams ($73 million) after posting a profit in the second quarter.
Emaar lost as much as 7.3 percent to 4.07 dirhams, and last traded down 5.7 percent at 4.14 dirhams, poised for its lowest close since Oct. 4. Hashim Al Dabal was arrested last month on suspicion of embezzlement, the emirate’s attorney general said. Emaar said last week that talks on a merger with Dubai Properties, state-controlled Sama Dubai LLC and Tatweer LLC are progressing.
“Now we’re seeing issues of fraud and negligence from management. It might prompt people to rethink the merger,” Duet Mena’s Sultani said.
Qatar’s DSM 20 Index sank 2.8 percent, the most since July 12. Oman’s MSM30 Index slipped 1.4 percent and the Kuwait Stock Exchange index lost 1.6 and Bahrain’s measure declined 0.8 percent. Saudi Arabia’s Tadawul All Share Index added 0.1 to 6,273.92.
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