Bloomberg News

Dubai Shares Fall for Fifth Day on Europe Debt Crisis; DFM Drops

October 04, 2011

Oct. 4 (Bloomberg) -- Dubai’s benchmark index fell for a fifth day, the longest losing-streak in more than four months, as disagreement among policy makers over how to resolve Europe’s debt crisis dimmed the outlook for the global economy.

Emaar Properties PJSC, developer of the world’s tallest skyscraper, decreased 3 percent. Dubai Financial Market PJSC sank to the lowest since 2009. The DFM General Index slipped 1.4 percent to 1,387.31, the lowest level since March 7, at the 2 p.m. close in Dubai. The 14-day relative strength index for Dubai was 21 today and 25.5 yesterday. A reading of below 30 indicates an asset is poised to gain, according to some technical analysts.

“Fears are still related to Europe debt, especially with the indecision between Europe’s policy makers,” said Samer Darwiche, a financial analyst at Gulfmena Investments in Dubai.

German Finance Minister Wolfgang Schaeuble opposed moves to further scale up the European Financial Stability Facility until the final three countries approve the fund’s latest upgrade. Slovakia, the Netherlands and Malta have yet to ratify an earlier decision to expand the fund to 440 billion euros ($581 billion). The MSCI Emerging Markets Index declined 2.4 percent and the Bloomberg GCC 200 Index lost 0.9 percent.

Europe’s financial leaders are fighting on multiple fronts, trying to extinguish the Greek crisis while insulating Italy and Spain and coming up with a formula for banks that the International Monetary Fund says face as much as 300 billion euros in credit risk.

Oil Break Even

U.S. crude for November delivery declined as much as 3.4 percent to $74.95 a barrel in electronic trading on the New York Mercantile Exchange. Countries in the Gulf Cooperation Council need Brent crude, a European benchmark, at about $86.5 a barrel this year to break even, according to a Deutsche Bank AG analysis last month.

Brent crude futures have averaged $111.86 a barrel in 2011, according to data compiled by Bloomberg, and were 1.5 percent lower at $100.22 a barrel today. The GCC, which includes the U.A.E. and Qatar, holds more than a third of the world’s proven oil reserves, according to data from BP Plc.

DP World Ltd., the Dubai government-controlled port operator, slumped 2.9 percent, the most since Sept. 18, to $10. Emaar fell to 2.56 dirhams, the lowest since March 8. Dubai Financial Market, the only Gulf Arab stock market to sell shares to the public, dropped 2.8 percent to 1.03 dirhams, the lowest since February 2009.

About 85 million shares traded in Dubai today, compared with this year’s daily average of 112 million shares.

Qatar’s QE Index slipped 1.6 percent, Kuwait’s gauge lost 0.1 percent, Oman’s MSM 30 Index retreated 0.4 percent and Abu Dhabi’s ADX General Index dropped 0.9 percent. Bahrain’s BB All Share Index fell 0.2 percent and Saudi Arabia’s Tadawul All Share Index sank 1 percent.

--Editors: Shaji Mathew, Claudia Maedler

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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