UAE shares fall as crude declines hit outlook

27/07/2016 05:56 AST

UAE stocks fell as the price of oil slid, renewing concerns that economic growth in the Arabian Gulf may slow further.

The benchmark Dubai Fin­ancial Market General Index fell by 0.4 per cent, while Abu Dhabi’s key stock gauge, the Abu Dhabi Securities Exchange General Index, also slipped 0.4 per cent.

In Dubai, Emaar Properties, the biggest publicly traded property company in the UAE, led the declines. In Abu Dhabi, the lender FGB led the drop.

Emaar fell by 1.4 per cent to Dh6.90 a share, while FGB fell by 2.4 per cent to Dh12.1 a share. The Bloomberg GCC 200 Index, a measure of 200 stocks across the Arabian Gulf, fell by 0.3 per cent. The gauge has dropped 1 per cent year to date, and 15 per cent over the past 12 months.

Oil prices have gained about 19 per cent this year but yesterday, the price of Brent crude oil fell by 0.7 per cent.

"One explanation for this weak performance of Gulf stock markets is that concerns about the economic outlook have risen," said William Jackson, a senior emerging markets economist at Capital Economics in London.

"Looking ahead, we do expect oil prices to edge up by next year, which should provide some support to equities in the region. However, we don’t think the rises in oil or Gulf equities will be large."

The IMF this month cut its Middle East growth forecast for next year by 0.2 percentage points to 3.3 per cent. That came after the fund cut its assumption for its oil price basket by US$1.50 to $50 per barrel for the same period.

The National