Bloomberg News

Persian Gulf Shares Drop on Europe Debt Concern; Emaar Declines

December 12, 2011

Dec. 12 (Bloomberg) -- Dubai’s benchmark stock index dropped the most in almost a week, leading a decline in Persian Gulf shares, as oil fell and European stocks retreated amid concern about the region’s debt crisis.

Emaar Properties PJSC, builder of the world’s tallest skyscraper, lost 2.8 percent. Saudi Basic Industries Corp., the world’s biggest petrochemicals maker known as Sabic, fell the most this month. Dubai’s DFM General Index dropped 0.6 percent, the most since Dec. 6, to 1,388.19 at the 2 p.m. close in the emirate. Saudi Arabia’s Tadawul All Share Index retreated 0.6 percent at 2:33 p.m. in Riyadh, while the Bloomberg GCC 200 Index weakened 0.5 percent.

The Stoxx Europe 600 Index lost 0.6 percent as Moody’s Investors Service said it will review the credit ratings of all countries in the region following last week’s debt summit. Italy auctioned, after Dubai’s market closed, 7 billion euros ($9.3 billion) in one-year bills and France plans to raise 6.5 billion euros in short-term debt.

“All eyes today are on the France and Italy bond sale,” said Samer Darwiche, an analyst at Gulfmena Investments in Dubai.

Italian borrowing costs declined from the last auction a month ago after Prime Minister Mario Monti’s government approved a 30 billion-euro emergency economic plan.

Crude for January delivery fell as much as 1.5 percent to $97.89 a barrel in electronic trading on the New York Mercantile Exchange. Gulf Arab oil exporters including Saudi Arabia and the U.A.E. supply about a fifth of the world’s oil.

Emaar had the steepest drop since Dec. 6 to 2.78 dirhams. Sabic lost 1.8 percent, the most since Nov. 26, to 95.50 riyals.

Oman Gains

Oman’s MSM30 Index rose for the eighth day, its longest winning streak since March last year, gaining 1 percent to 5,663.86. The gauge, down 16 percent so far this year, is valued at about 1.6 times net assets, or book value. That compares with 1.8 times for Saudi Arabia’s measure and 2.6 times for the Dow Jones Industrial Average, according to data compiled by Bloomberg.

“With the underperformance of local equities during the last six months, we saw local institutional buying in leading stocks at the current lower levels owing to attractive valuations,” said Kanaga Sundar, head of research at Gulf Baader Capital Markets Co. in Muscat.

Kuwait’s gauge decreased 0.3 percent and Qatar’s QE Index dropped 0.1 percent. Abu Dhabi’s ADX General Index slid less than 0.1 percent. Bahrain’s measure was little changed.

--Editors: Shanthy Nambiar, Claudia Maedler

To contact the reporter on this story: Mourad Haroutunian in Riyadh at mharoutunian@bloomberg.net

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


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