Bloomberg News

Dubai Shares Lead Persian Gulf Lower on Global Growth Concerns

April 09, 2012

Dubai’s benchmark stock index retreated for a third day, pushing Persian Gulf shares lower, on global growth concerns and as oil fell after Iran agreed to resume talks on its nuclear program.

Emaar Properties PJSC (EMAAR), developer of the world’s tallest tower, fell 0.9 percent. Emirates Integrated Telecommunications Co. (DU), the United Arab Emirates’ second-biggest phone company known as Du, dropped to the lowest level since February. The DFM General Index (DFMGI) lost 0.7 percent to 1,657.59, the lowest since April 2, at the 2 p.m. close in Dubai. The Bloomberg GCC 200 Index (BGCC200) decreased 0.6 percent.

“High inflation numbers from China, which indicate that it will also slow down its monetary easing policy, on the back of falling Asian markets encouraged U.A.E. investors to book profits and stay on the sidelines,” said Nabil Farhat, a partner at Abu Dhabi-based Al Fajer Securities.

Asian stocks dropped for a fourth day as faster-than- estimated growth in consumer prices in China signaled the central bank may have less room to ease monetary policy to bolster economic growth. American employers last month added the fewest jobs since October, the Labor Department said on April 6, a market holiday in the U.S. Emerging market stocks declined 0.9 percent at 4:52 p.m. in Dubai and futures on the Standard & Poor’s 500 Index (SPX) lost 1.1 percent.

Iran Talks

Oil for May delivery declined as much as 1.7 percent to $101.55 a barrel in electronic trading on the New York Mercantile Exchange. Iran and the five permanent United Nations Security Council members plus Germany will meet for nuclear talks starting April 14 in Istanbul, European Union spokesman Michael Mann said. The last meeting was in January 2011. Gulf Arab oil exporters, including Saudi Arabia, Qatar and the U.A.E., supply about a fifth of the world’s oil.

Emaar fell the most since March 29 to 3.22 dirhams. Du dropped 2.6 percent to 2.96 dirhams, the lowest since Feb. 27.

Saudi Arabia’s Tadawul All Share Index (SASEIDX) fell 0.3 percent to 7,697.70, the lowest close since March 24. The measure decreased for a fourth day, its longest losing streak since November.

Saudi Arabia’s King Abdullah asked the stock market regulator to investigate trading violations even if they involve members of the royal family, Al Sharq reported on its website, citing a letter to the regulator. An official at the Capital Market Authority declined to comment when contacted by Bloomberg News today.

“When the king says no one is above the law, this is probably the ultimate credibility statement and sign of maturity for the Saudi stock market,” said Haissam Arabi, Dubai-based chief executive officer of Gulfmena Investments.

Qatar’s QE Index (DSM) and Bahrain’s measure declined 0.3 percent. Abu Dhabi’s ADX General Index (ADSMI) slipped 0.5 percent, while Oman’s benchmark stock index dropped 0.2 percent. Kuwait’s gauge retreated 0.6 percent.

To contact the reporters 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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