Dubai hits July low, new rules drag Kuwait
Dubai, July 11, 2011
A sell off in Dubai pushed the benchmark to its lowest level in July, as sentiment was affected by fears of spreading euro zone crisis, while new rules by Kuwait's market regulator weighed on the Gulf state's index.
Dubai's index declined 1.2 per cent to 1,549 points, its lowest level since June 29. Losers outnumber gainers 17 to two.
Lender Emirates NBD and heavyweight Emaar Properties 5.8 per cent and 1.6 per cent respectively.
World stocks hit one-week lows on Monday and the euro slid across the board as intensifying concerns that Italy could be the next victim of the euro zone debt crisis prompted an emergency meeting of top European officials.
"Today's performance is due to external factors, mainly contributed by global markets and spread of debt crisis in Europe," said Marwan Shurrab, vice-president and chief trader at Gulfmena Alternative Investments.
"Dubai's stocks, fundamentally, are trading at strong levels," he added.
Abu Dhabi's benchmark rose 0.1 per cent to 2,725 points. Property stocks helped with Aldar Properties and Sorouh Real Estate gaining 0.8 and 1.5 per cent respectively.
Elsewhere, Kuwait's index declined 0.5 per cent to 6,184 points, down 11.1 per cent so far in 2011.
"We have so many negative effects on the market and there is no catalyst," says Badr al-Ghanim, Global Investment House vice-president of asset management.
The newly-formed Capital Markets Authority has given a set of new rules to be implemented, including a requirement of separate licences for investment firms to operate their lending and investment businesses.
"Everyone is having problems implementing these laws. Even Q2 results will be below expectations," al-Ghanim added.
Seven of the ten largest stocks were down in early trading, with National Bank of Kuwait falling 1.7 per cent and Zain down 2 per cent.-Reuters