Bloomberg News

Dubai Shares Fall to 7-Month Low on Europe Woes, U.S. Data

October 03, 2011

Oct. 3 (Bloomberg) -- Dubai’s stocks fell to a seven-month low before a meeting of European finance ministers to weigh the threat of a Greek default and as oil declined to the lowest in more than a year.

Emaar Properties PJSC, developer of the world’s tallest skyscraper, decreased 3.7 percent. Emirates Integrated Telecommunications Co., known as Du, retreated to the lowest since March. The DFM General Index slipped 1.6 percent to 1,407.58, the lowest since March 7, at the 2 p.m. close in Dubai. The value of traded shares in Dubai tumbled to 30.2 million dirhams ($8.2 million) yesterday, the lowest since August 2004. Shares with a value of about 89 million dirhams traded today.

Emerging markets dropped, with the MSCI Asia Pacific Index losing 2.7 percent, before European officials gather today to grapple with how to shield banks from the debt crisis and consider a further boost to the region’s rescue fund. Oil retreated as much as 2.3 percent to $77.36 a barrel as traders speculated Europe’s debt crisis and a slowing U.S. economy will curb fuel demand.

“We are being impacted by the global sentiment,” said Sebastien Henin, who helps oversee $100 million at The National Investor in Abu Dhabi. “We don’t follow the same pace as other markets as we don’t have foreigners at this point in time.”

The U.S. Institute for Supply Management’s factory index probably fell to 50.5 from 50.6 in August, according to a Bloomberg survey of economists ahead of data today. Gains in U.S. payrolls in September may have been too small to reduce joblessness and manufacturing almost stalled as concern mounted that the global recovery was losing momentum, economists said before reports this week. Futures on the Standard & Poor’s 500 Index dropped as much as 1.3 percent.

Dubai’s Drop

Dubai’s gauge slipped 5.6 percent in the third quarter amid concern Europe’s sovereign-debt crisis is worsening. That compares with a 23 percent slump for the MSCI Emerging Markets Index. The stock market saw net foreign investment outflow of 56.5 million dirhams in June and 15.9 million dirhams in July, according to the bourse’s website.

“I do not expect liquidity to pick up anytime soon,” said Ahmed Talhaoui, head of asset management at Abu Dhabi-based Royal Capital PJSC.

Emaar fell to 2.64 dirhams, the lowest since March 8. Du, the U.A.E.’s second-largest phone company, retreated 2 percent to 2.9 dirhams, the lowest since March 7.

Qatar’s QE Index declined 0.8 percent and Abu Dhabi’s ADX General Index dropped 0.7 percent. Bahrain’s BB All Share Index slumped 0.6 percent. Kuwait’s gauge lost 0.5 percent and Oman’s MSM 30 Index fell 0.2 percent. Saudi Arabia’s Tadawul All Share Index decreased 1.4 percent to the lowest since Aug. 24.

Gulf Arab oil exporters, including the U.A.E. and Qatar, supply about a fifth of the world’s oil.

--Editors: Claudia Maedler, Shanthy Nambiar

#<382839.1459615.2.1.95.14779.25># -0- Oct/03/2011 13:12 GMT

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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