JEDDAH: Dubai’s index slumped to a 21-week low on Monday as nervy investors sold stocks in the absence of any concrete news on Dubai World’s debt woes, while similar worries sent other Gulf Arab bourses tumbling to milestone lows. Dubai fell 6.2 percent to its lowest finish since mid-July and it has fallen 22 percent in the five trading sessions since Dubai World asked for a debt standstill as it attempts to sort out $26 billion of debts.
Abu Dhabi dropped 3.4 percent to a 31-week low, Saudi Arabia slumped to its lowest finish since mid-September, Oman returned to August levels and Bahrain hit a two-year low.
Saudi Arabia’s TASI index fell 2.3 percent, its biggest one-day decline for five weeks and lowest close since Sept. 16.
“The market has begun to show some disappointing and uncomfortable signs. The market experienced quite a big drop today, bringing it to a close below the lower Bolling band, backed up by a relatively strong liquidity of SR3.6 billion,” said Jeddah-based Financial Transaction House (FTH) in its daily market report.
“Today, we saw the biggest sector drop in the insurance sector, despite the introduction of a new company to the market, Al-Alamiya Cooperative Insurance (8280). Further, today’s drop in TASI may have been accentuated by the fifth consecutive drop in crude oil prices,” FTH added.
UAE stocks collapsed in sluggish trading, with Emaar Properties, Dubai Islamic Bank and Arabtec all losing more than 9.8 percent.
DP World, the flagship company of Dubai World, recouped its early losses after the Dubai finance chief said the ports operator was able to meet its obligations and was performing well.
The firm’s shares ended flat, having been down 5.5 percent before Abdulrahman Al-Saleh’s remarks, but other Dubai stocks were little moved.
“Volumes are low, but that’s because stocks hit their limit down, so the market essentially stopped trading 1.5 hours before the actual close,” said Samer Al-Jaouni, general manager of Middle East Financial Brokerage Co. “There were offers, but no buyers.” Without the 10 percent stock movement limit, the market would have fallen further, Al-Jaouni added.
Investment companies were the biggest losers on Oman’s Index, which fell to a 15-week low as investors fretted over firms’ possible exposure to Dubai’s debt crisis. “Oman has many listed investment companies that have money in Dubai, so investors believe they will be affected,” added United’s Nasr.
Kuwait’s index made its largest one-day gain for four months after the country’s prime minister agreed to be questioned by Parliament in what would be the first time the head of an OPEC member country’s government would undergo the process.
— With input from agencies