Bloomberg News

Dubai Shares Drop to One-Week Low on Europe Debt Crisis Concern

September 11, 2011

Sept. 11 (Bloomberg) -- Persian Gulf shares fell, sending Dubai’s index to the lowest level in almost a week, on concern Europe’s policy makers won’t be able to stop the region’s sovereign debt crisis from growing and after oil retreated.

Emaar Properties PJSC, developer of the world’s tallest tower, slipped as much as 0.7 percent. Dubai Financial Market PJSC, the only Gulf Arab stock market to sell stock to the public, fell the most in almost a week. The DFM General Index lost 0.4 percent to 1,475.4, the lowest intraday level since Sept. 6, at 11:05 a.m. in Dubai. The Bloomberg GCC 200 Index of the region’s stocks dropped less than 0.1 percent.

“Equities in the Middle East continue to track global markets and the current backdrop does not provide any buying conviction,” said Julian Bruce, equity sales head at EFG-Hermes Holding SAE in Dubai. “Gulf Cooperation Council markets are drifting lower due to an absence of domestic drivers.”

European stocks tumbled last week after German Chancellor Angela Merkel’s party suffered its fifth election loss this year as she faced criticism over the handling of the debt crisis. European Central Bank President Jean-Claude Trichet on Sept. 8 said threats to the euro region worsened. Planned rescue loans to Greece have been put in doubt as countries including Finland demand the country provide collateral in exchange for the funds. The Stoxx 600 Europe Index lost 3.7 percent last week.

Oil’s Decline

Oil for October delivery retreated 2 percent Sept. 9 to $87.24 a barrel on the New York Mercantile Exchange. Gulf Arab oil exporters, including the United Arab Emirates and Saudi Arabia, supply about a fifth of the world’s oil.

Emaar decreased for the first time in four days to as low as 2.83 dirhams. Dubai Financial Market dropped 1.7 percent, the most since Sept. 5, to 1.14 dirhams. About 9 million shares traded so far in Dubai, compared with a 12-month daily average of 123 million shares, according to data compiled by Bloomberg.

Oman’s MSM 30 Index and Abu Dhabi’s ADX General Index declined 0.2 percent and Qatar’s QE Index lost 0.1 percent. Kuwait’s gauge slipped 0.4 percent, while Bahrain’s BB All Share Index was little changed.

-- Editors: Claudia Maedler, Susan Lerner

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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