Dubai plunges on Arabtec, property-related shares
Dubai, June 24, 2014
Dubai construction firm Arabtec tumbled its daily 10 per cent limit for a third session in a row on Tuesday, fuelling a broad and aggressive sell-off on the emirate's stock market.
Dubai's benchmark plunged 6.2 per cent, heading for its biggest daily loss since last August, as almost all stocks declined, giving up early-session gains.
A number of other stocks were limit-down or very close, including developer Union Properties, contractor Drake and Scull and bourse operator Dubai Financial Market.
Arabtec on Tuesday partly confirmed reports about layoffs at the company, which followed the resignation of its chief executive Hasan Ismaik last week.
At the same time, the company made no comment on its strategic direction or on what could happen to Ismaik's 28.85 per cent stake in Arabtec, the issues which investors say are their primary concern.
The Arabtec saga has hurt confidence throughout the market. Investors are also keen to take profits before the summer lull; Dubai's index remains up 19 per cent year-to-date.
"Overall, the sentiment is still negative and the sell-off continues," says Julian Bruce, director of Western institutional equity sales at EFG-Hermes.-Reuters