Dubai slumps to fresh 7-year closing low
Dubai, December 27, 2011
Dubai's benchmark slumped to a fresh seven-year closing low as the year-end trading lull took a toll, while Qatar's market rose for the third session in five.
Dubai's index ended 0.8 percent lower at 1,319 points, its lowest close since June 2004. A lack of catalyst in the local market and slow recovery in the property sector, the ex-leaders of the market, has pushed investors to look at regional alternatives.
"Valuations-wise, the market is attractive but the problem is that there is virtually no investor interest," Shakeel Sarwar, head of asset management at Securities & Investment Co (Sico) in Bahrain, said.
"Until big institutional investors take the lead, I don't think the market will recover in the short-term. Volumes have fallen, brokerages are shutting down, and it's a sorry tale.
There seems to be no investors willing to come in and commit long-term capital."
Drake & Scull shed 2.1 percent, while Union Properties dropped 5.6 percent. Shuaa Capital slid 6.9 percent, extending year-to-date losses to 60 percent and spiking volumes to their highest since late-April. Traders called the slide a falling-knife effect.
The struggling investment bank said earlier in December it will lay-off 29 of its employees in the first phase of a planned redundancy program aimed at boosting profitability.
Abu Dhabi's Aldar Properties falls 2.4 percent to a fresh record closing low.
The portion of the developer's bonds converted into 1.2 billion shares last week by Mubadala Development Co will be listed on Jan 2, Aldar said in a bourse statement. - Reuters