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Dubai Shares Drop to 4-Month Low on Global Risk; Egypt Retreats

June 03, 2012

Dubai’s Stocks Advance to Week-High on Emaar

Emaar Properties PJSC, which has the heaviest weighting on Dubai’s index, sold sukuk last week at a profit rate of 6.4 percent, lower than last year’s 8.5 percent. Photographer: Gabriela Maj/Bloomberg

Dubai’s shares fell to the lowest level in more than four months on concern Europe’s debt crisis is worsening and a slowing global economy will damp demand for oil from the Persian Gulf. Egypt’s benchmark index retreated.

Emaar Properties PJSC (EMAAR), the developer of the world’s tallest skyscraper in Dubai, slumped the most in almost six months. Tamweel PJSC (TAMWEEL), a mortgage lender, fell to the lowest since March 1. The benchmark DFM General Index (DFMGI) dropped 2 percent to 1,441.8 at the close in Dubai, the lowest level since Feb. 2. Egypt’s EGX30 Index (EGX30) dropped 1.3 percent at the close in Cairo as a verdict in the trial of former President Hosni Mubarak sparked protests.

Oil tumbled 17 percent last month, the most since December 2008, to $83.23 a barrel, amid concerns Greece may become the first country to drop out of the euro area. U.S. and European stocks fell for the fourth time in five weeks. The six-nation Gulf Cooperation Council, which includes the United Arab Emirates, Saudi Arabia, Qatar, Kuwait, Bahrain and Oman, sits on one-fifth of the world’s proven oil reserves.

The decline in Dubai is “more related to oil,” Sebastien Henin, who helps oversee $100 million at The National Investor in Abu Dhabi, said by e-mail. “The second reason is the lack of visibility in the euro zone. Losing only 2 percent in this current international meltdown is very good.”

About 124 million shares were traded in Dubai, compared with 12-month daily average of about 139 million shares, according to data compiled by Bloomberg. Emaar tumbled 4.1 percent, the most since Dec. 15, to 2.79 dirhams. Tamweel lost 4.4 percent to 1.1 dirhams.

Egypt Protests

Egypt’s gauge declined to 4,625.62, the lowest level since April 10.

A Cairo court yesterday handed life sentences to Mubarak and his interior minister Habib El-Adli for complicity in the deaths of demonstrators during last year’s uprising. It also acquitted six assistants of El-Adli of charges related to the killings and Mubarak’s two sons of corruption charges. All decisions are subject to appeal. Thousands of demonstrators filled Cairo’s Tahrir Square within hours of the verdict to voice their discontent.

“Today’s market is definitely politically driven and the global scene is not helping make things better,” said Omar Darwish, equity sales trader at Cairo-based Commercial International Brokerage Co. “People are back in Tahrir demanding the fall of the regime as if nothing had happened over the past year and a half and this may result in the delay of the presidential election.”

EFG-Hermes Gains

EFG-Hermes Holding SAE (HRHO) advanced as much as 9.9 percent to 12.06 before closing at 11.01 Egyptian pounds, the highest level in more than a week. The biggest publicly traded Arab investment bank rejected a takeover bid from Planet IB Ltd. in favor of a joint-venture with Qatar’s QInvest LLC.

Elsewhere in the Middle East, Israel’s benchmark TA-25 Index fell 2.3 percent in Tel Aviv. The yield on the 5.5 percent Mimshal Shiklit government bonds due January 2022 dropped nine basis points, or 0.09 percentage point, to 4.31 percent.

Abu Dhabi’s ADX General Index fell 0.6 percent, Kuwait’s measure dropped 1.2 percent and Qatar’s QE Index fell 1 percent. Oman’s MSM30 Index retreated 0.6 percent, while Bahrain’s index declined 0.1 percent. Saudi Arabia’s measure rose 1 percent after tumbling the most since August yesterday. The Bloomberg GCC 200 Index (BGCC200) gained 0.1 percent.

To contact the reporter on this story: Alaa Shahine in Dubai at asalha@bloomberg.net; Ahmed A Namatalla in Cairo at anamatalla@bloomberg.net;

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


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