By Haris Anwar
Nov. 16 (Bloomberg) -- Persian Gulf stocks fell, with Dubai's index posting its biggest seven-day slump ever, on concern that the region's oil and real-estate driven economic boom has run its course.
Emaar Properties PJSC, the Middle East's largest developer, dropped to the lowest since September 2004. Qatar Islamic Bank SAQ, the country's biggest Muslim law-compliant bank, fell the most in three weeks. Bank Muscat SAOG, Oman's largest lender, declined for a fourth day.
The Dubai Financial Market General Index tumbled 5.9 percent to 1,981.44, losing 32 percent in seven days, the most since Bloomberg started tracking the index in December 2003. In Qatar, the DSM 20 Index retreated 5.1 percent, bringing the seven-day drop to 25 percent. Oman's Muscat Securities Market 30 Index slid 6.1 percent to 5,846.19, its lowest close since May 2007.
``Investors are panicking and overreacting,'' Vyas Jayabhanu, head of Al Dhafra Financial Brokerage LLC, said in an interview from Abu Dhabi today. ``I've seen clients selling shares they bought for their grandkids. The biggest fear is that the demand for real-estate is going to slump. I won't touch banks and developers in this market.''
67 Percent Drop
Dubai's index has plunged 67 percent this year, while Qatar's benchmark dropped 42 percent and Oman's 35 percent. Gulf markets have suffered as oil prices declined, the credit crisis made it more difficult for the region's companies to borrow, and the real-estate market slowed.
Today's drop left Dubai's benchmark index valued at 4.7 times the earnings of its 29 companies, the lowest ratio since at least February 2007, data compiled by Bloomberg shows. Qatar's index trades at 7.2 times earnings, while the MSCI Emerging Markets Index is valued at 7.9 times earnings.
Crude oil closed at $57.04 a barrel on Nov. 14 in New York, down 61 percent from its July record, as slowing economies in the major consuming nations cut demand for fuel. The oil-rich Middle East has used record crude income for infrastructure projects including man-made islands and the world's tallest tower. Dubai property prices, including villas and apartments, fell 4 percent in the month to October, while in Abu Dhabi they slid 5 percent, HSBC Holdings Plc said last week.
Saudi Shares Gain
Emaar retreated 9.8 percent to 2.87 dirhams, the lowest since September 2004. Qatar Islamic Bank lost 9.3 percent, the most since Oct. 26, to 63.7 riyals. Bank Muscat retreated 7.5 percent to 0.848 rial, bringing the four-day drop to 16 percent.
Saudi Arabia's Tadawul All Share Index rose 1.3 percent to 5,145.84. King Abdullah yesterday said he expects infrastructure spending ``for the government and oil sectors to exceed $400 billion over the next five years.''
The kingdom invested in ``low-risk and very liquid'' assets and is well protected to weather the global economic turmoil, the Vice Governor of the Saudi Arabian Monetary Agency, Mohamed bin Suleiman Al-Jasser said today.
The Abu Dhabi Securities Exchange General Index dropped 0.3 percent and the Bahrain All Share Index declined 0.4 percent.
The Kuwait stock exchange was shut for trading after a court last week ordered the closure until Nov. 17 to protect investors from further losses.
The following stocks also rose or fell in the region. Stock symbols are in parentheses after company names:
Abu Dhabi National Energy Co. (TAQA UH) added 7.5 percent to 1.44 dirhams. Global Investment House KSCC raised its recommendation on the state-controlled energy company known as Taqa to ``buy'' from ``hold'' with a share-price estimate of 3.11 dirhams.
Aramex PJSC (ARMX UH) climbed 5 percent to 1.05 dirhams after the Middle East's biggest courier service company said it will buy back shares. The company did not say how many of its shares it planned to purchase.
Dana Gas PJSC (DANA UH) added 2.8 percent to 0.74 dirham. The U.A.E.-based oil and natural-gas producer and distributor said third-quarter profit rose 17 percent to 26 million dirhams ($7 million).
Dlala Brokerage & Investment Holding Co. (DBIS QD) declined 9.4 percent to 19.3 riyals. The Qatari asset manager and stockbroker will form a new real-estate company with capital of 30 million riyals ($8.25 million).
Sorouh Real Estate Co. (SOROUH UH), Abu Dhabi's second- largest property developer by market value, climbed 1.9 percent to 2.71 dirhams after it appointed Samer Abu-Hijleh as chief operations officer.
To contact the reporter on this story: Haris Anwar in Dubai on Hanwar2@bloomberg.net
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