Dubai index falls 3.8 per cent in profit taking
Biggest decline in seven months with investors booking profits.
March 12, 2014
Updated: March 12, 2014 04:00 AM
Dubai’s equity index fell the most in seven months on Wednesday as investors booked profits. UAE shares have surged 35.7 per cent since November, when the emirate won its bid to host Expo 2020.
“We have some good profit-taking,” said Sebastien Henin, the head of asset management at The National Investor, an Abu Dhabi-based investment bank. “When they decided to give rights in November for Dubai to host the Expo, the market was only going in one way. It was too high and too fast.”
In Wednesday’s session, five stocks fell for every stock that rose. Shuaa, a Dubai-based investment bank, dropped 6.1 per cent to Dh1.06 a share. The Dubai Financial Market Company, the emirate’s stock exchange, tumbled 6.6 per cent to Dh2.80 a share.
“There’s a lack of catalysts. Our markets have tripled in 18 months, so a dip is overdue,” said Nabil Rantisi, the managing director of brokerage at Mena Corp, an Abu Dhabi-based investment company. “Come on, stocks went from one to three, from three to nine. I don’t think it’s related to bad news. Price-to-earnings ratios are pretty much high.”
Emaar Properties, the region’s biggest developer, declined 3.4 per cent to Dh8.57 a share. Arabtec Holding, the biggest contractor, fell 4.9 per cent to Dh4.66 a share. Union Properties, another developer, fell 5.4 per cent to Dh1.90 a share.
The Dubai Financial Market General Index dropped 3.8 per cent, the biggest one-day price drop since August, to close at 3,935.79 points.
On the Abu Dhabi Securities Exchange, property stocks, banks and financial services firms dragged the equity index lower.
Aldar Properties, the capital’s biggest developer, fell 4.8 per cent to Dh2.96 a share. Eshraq Properties, another developer, dropped 6.7 per cent to Dh2.21 a share. Abu Dhabi Commercial Bank, the biggest commercial lender in the emirate, dropped 6.5 per cent Dh6.70 a share.
The Abu Dhabi Securities Exchange General Index closed 2.7 per cent lower at 4,650.17.