Bloomberg News

Dubai Shares Head for Lowest in Two Weeks on Earnings Concern

January 12, 2012

Jan. 12 (Bloomberg) -- Dubai shares declined, sending the benchmark index to its lowest close in more than two weeks, on investor concern that fourth-quarter profits may be below analysts’ estimates.

Dubai Financial Market PJSC, the only publicly traded Gulf Arab stock market, slumped to the lowest level since Feb. 2009. Emirates NBD PJSC, the nation’s biggest bank by assets, declined the most in more than two weeks. The benchmark DFM General Index fell 0.5 percent to 1,327.54 at the 2:00 p.m. close in the emirate. About 79 million shares traded in Dubai, compared with a 12-month daily average of 99 million shares, according to data compiled by Bloomberg.

“Confidence is really weak,” said Tariq Qaqish, deputy head of asset management at Al Mal Capital in Dubai. There is some concern among investors that company earnings may come in below expectations, he said. “Investors are frustrated and have no faith to enter the market when there is no floor.”

Dubai Financial Market may report a profit of 53.2 million dirhams ($14.5 million) for 2011, down from 79 million dirhams a year earlier, according to the mean estimate of six analysts compiled by Bloomberg. Emirates NBD may need to set aside as much as 8 billion dirhams by the end of 2013 to cover bad loans, Goldman Sachs Group Inc. said in a Dec. 7 report.

Dubai Financial Market declined 1.4 percent to 76.1 fils. Emirates NBD retreated 3.2 percent to 2.71 dirhams. There are 100 fils to the dirham.

The Bloomberg GCC 200 Index fell less than 0.1 percent. Abu Dhabi’s ADX General Index declined 0.2 percent and Oman’s MSM30 Index fell 0.3 percent. Qatar’s QE Index lost 0.1 percent, while measures in Kuwait and Bahrain rose 0.5 percent and 0.3 percent, respectively. Saudi Arabia’s Tadawul All Share Index was closed for the weekend.

--With assistance from Dana El Baltaji in Dubai. Editors: Daliah Merzaban, Shanthy Nambiar

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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