Bloomberg News

Dubai Shares Drop Most in a Week on Profit Concern; Shuaa Falls

January 02, 2012

Jan. 2 (Bloomberg) -- Dubai’s benchmark index retreated the most in more than a week amid speculation some companies may report slower fourth-quarter earnings growth.

Shuaa Capital, the investment bank controlled by Dubai’s ruler, tumbled 8.7 percent. Air Arabia PJSC, the biggest low- cost carrier in the Middle East, fell for the first time since Dec. 27. The benchmark DFM General Index retreated 1 percent, the biggest intraday decline since Dec. 21, to 1,339.44 at 12:58 p.m. in the emirate. About 17 million shares were traded in Dubai today, compared with a 12-month daily average of 99.9 million shares, according to data compiled by Bloomberg.

Fourth-quarter earnings in the United Arab Emirates will show “insignificant growth,” said Tariq Qaqish, deputy head of asset management at Al Mal Capital in Dubai. “There is no real short-term catalyst for investors to look forward to.”

Shuaa, which reported a third-quarter loss of 156.2 million dirhams ($42.5 million), may continue to suffer from “negative or weak” profitability in the near-future as the investment bank restructure its business, Moody’s Investors Service said in a Dec. 28 report. The bank’s credit ratings were lowered one level to Ba3, three ranks below investment grade. Emirates NBD PJSC, the country’s biggest bank by asset, may need to set aside as much as 8 billion dirhams in provisions between the fourth quarter of 2011 and 2013, Goldman Sachs Group Inc. said in a Dec. 7 report.

Shuaa tumbled the most since Dec. 26 to 50.2 fils. Air Arabia lost 1.5 percent to 57.7 fils. There are 100 fils to the dirham. Emirates NBD shares weren’t trading today.

The Bloomberg GCC 200 Index fell 0.2 percent. Abu Dhabi’s ADX General Index declined 0.3 percent and Kuwait’s measure lost 0.6 percent, while Bahrain’s BB All Share Index retreated 0.5 percent. Qatar’s QE Index gained 0.1 percent and Saudi Arabia’s Tadawul All Share Index was little changed.

--Editors: Shanthy Nambiar, Claudia Maedler

To contact the reporter on this story: Alaa Shahine in Dubai at asalha@bloomberg.net

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


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