Dubai bourse slumps to two-month low
Dubai, May 11, 2010
Dubai's index on Tuesday slumped to a two-month low, with dominant retail investors cashing in yesterday's fleeting gains as longer-term investors stay away until indebted Dubai World reaches agreement with bank creditors.
The index fell two per cent to 1,707 points, its lowest finish since March 11, tracking losses in Asia and Europe.
The Japanese Nikkei ended 1.1 per cent lower and the London FTSE is down 1.8 percent at 1001 GMT as worries return over how Greece will cut its budget deficit, ending Monday's relief rally that was sparked by a $1 trillion bailout package.
'Yesterday's rally was mainly down to international markets, because our markets need more time before they can enter a bull run,' said Musa Haddad, head of Menaa equity desk at National Bank of Abu Dhabi.
'Asia is down, so we are going down today - that's not the way we're supposed to trade. Institutions are not very active in the market because of a lack of catalysts in Dubai and Abu Dhabi.'
Emaar Properties and Dubai Financial Market each fell 2.8 per cent and Arabtec dropped 4 per cent as this trio account for nearly two-thirds of all shares changing hands on the index.
'The UAE outlook is unclear as we wait for Dubai World's debt issues to be completely sorted out so we can return to fundamentals,' added Haddad.
'Right now, the market is not building any bases, it is just moving up and down in a range. That's why trading is coming from retail investors, not institutions - it's better for them to sit on the sidelines. There's no reason to buy and hold positions for the longer-term.'
A deal between creditors and troubled state-owned conglomerate Dubai World could be finalised within two weeks, a top offical said on Sunday.
Du fell 1.2 per cent, outperforming the index, after its quarterly net profit more than quadruples.
'We were quite surprised by the number of mobile subscribers added during the quarter and the mobile usage,' says Marise Ananian, vice president, telecoms, at EFG-Hermes in Cairo.
'The company continues to surprise in terms of subscriber additions and is able to capture more of the market which it has been doing over the last year. We are expecting the company to continue its good performance.'
Abu Dhabi's index dropped 0.2 per cent to 2,788 points as volumes fall to a seven-session low.-Reuters