Bloomberg News

Dubai Shares Drop to Lowest This Month on Slowing World Economy

June 12, 2011

June 12 (Bloomberg) -- Middle East shares fell, with Dubai’s stocks retreating to the lowest this month, after data from the U.S., India and China fueled concern global economic growth is slowing, damping investor appetite for riskier assets.

Emaar Properties PJSC, builder of the world’s tallest skyscraper in Dubai, lost 1.6 percent and Dubai Islamic Bank PJSC, the United Arab Emirates’ biggest bank complying with Shariah rules, slid for a third day. The 30-member DFM General Index dropped 0.6 percent to 1,547.67, the lowest intraday level since May 31, at 11:15 a.m. in Dubai. The Bloomberg GCC 200 Index of the region’s stocks declined 0.2 percent. Israel’s benchmark stock index lost 1.1 percent.

“Regional markets appear to be taking cues from trends in global markets,” said Sachin Mohindra, a fund manager at Invest AD in Abu Dhabi. Investors including “high net worth and regional institutions, who are the providers of incremental buying liquidity in regional markets, appear to be closely tracking international market events,” he said.

China on June 10 reported a $13.1 billion trade surplus for May, missing the $19.3 billion median estimate in a Bloomberg News survey, as export growth slowed.

India reported that output at factories, utilities and mines rose 6.3 percent in April from a year earlier after an 8.8 percent gain in March. China and India are the world’s second- and fourth-biggest oil-consuming countries. The six nations of the Gulf Cooperation Council supply about a fifth of the world’s oil.

‘Frustratingly Slow’

On June 8, U.S. Federal Reserve Chairman Ben S. Bernanke said the “uneven” and “frustratingly slow” economic recovery warrants continued monetary stimulus. Even so, he gave no indication that he plans a third round of asset purchases known as quantitative easing.

The MSCI All-Country World Index slid 1.5 percent on June 10. The Standard & Poor’s 500 Index dropped 1.4 percent and the Stoxx Europe 600 index slumped 1.3 percent. Oil in New York retreated 2.6 percent to $99.29 a barrel.

Emaar fell to 3.07 dirhams, the lowest since May 30. Dubai Islamic decreased 1 percent to 2.05 dirhams, the lowest since May 26.

Oman’s MSM30 Index was little changed while Qatar’s measure and the Kuwait SE Price Index slipped 0.2 percent. Bahrain’s gauge was unchanged and Abu Dhabi’s measure lost 0.4 percent.

In the Levant, Israel’s benchmark TA-25 stock index lost 1.1 percent as Bank of Israel Governor Stanley Fischer joined the race to head the International Monetary Fund. The index is at its lowest since Sept. 20.

The benchmark Mimshal Shiklit government bond due January 2020 declined, pushing the yield two basis points higher, or 0.02 percentage point, to 5.11 percent.

--Editors: Philip Sanders, Inal Ersan

To contact the reporter on this story: Zahra Hankir in Dubai at zhankir@bloomberg.net.

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net.


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