By Haris Anwar
Nov. 13 (Bloomberg) -- Persian Gulf stocks tumbled, sending Dubai's index lower for a sixth day and spurring a trading halt in Kuwait, as banks tightened credit terms for real-estate investors and oil plunged to a 21-month low.
Emaar Properties PJSC, the Middle East's largest real- estate developer, led the decline in Dubai, sliding to the lowest in more than four years. Arkan Building Materials Co. dropped the most since its listing in January 2007.
The Dubai Financial Market General Index tumbled 4.1 percent to 2,124.51 at 11:40 a.m. local time, bringing the slump for the week to 24 percent. The Abu Dhabi Securities Exchange General Index dropped 3.4 percent.
``Dubai and Abu Dhabi are exposed to the real-estate sector, and that's making investors nervous,'' Ajeev Gopinathan, vice- president at Gulf Baader Capital Markets SAOC, said in a phone interview from Oman. ``It's very difficult to quantify the magnitude of this problem.''
The Kuwait Stock Exchange suspended trading after a court ordered its closure to protect investors from further losses after the bourse's main index slid 31 percent this year. The benchmark index last traded at 8,691 at 9:47 a.m. local time. The measure declined 10 percent this week and is at its lowest since July 2005.
`Social Repercussions'
The market will stay closed until Nov. 17 when the court will sit again to consider whether to extend the suspension, Adel Abdul Hadi, the Kuwaiti lawyer who represented small stock market traders at the court, said in phone interview from Kuwait City today. ``The court not only considered the shares decline, but also the social repercussions on the society from the market losses,'' he said.
Dubai is bracing for a downturn in the property market as economic growth slows, reducing demand for real-estate. Buyers of Dubai property will lose 30 percent of what they have paid if they default, cancel, or breach their purchase contracts, citing the Land Department, Gulf News reported
United Arab Emirates banks, including Emirates NBD, the country's largest, have suspended retail-credit facilities to expatriate employees working for companies in the real-estate industry because of the rising risk of default, Gulf News reported. Emirates NBD Chief Investment Officer Michael Preiss in an interview with Bloomberg denied that there is a blanket ban on lending to real-estate employees, while acknowledging that lending criteria have been tightened at the bank.
Oil's Slump
Crude oil fell below $55 a barrel as slowing economies of the major consuming nations cuts demand for fuels. The Organization of Petroleum Exporting Countries' Gulf members, which produce almost a fifth of the world's oil, have used record crude income to embark on infrastructure projects including man-made islands and the world's tallest tower. Oil for December delivery fell as much as $1.49, or 2.7 percent, to $54.67 a barrel on the New York Mercantile Exchange.
Oman's Muscat Securities Market 30 Index lost 2.3 percent. In Qatar, the DSM 20 Index retreated 3 percent, while the Bahrain All Share Index gained less than 0.1 percent. Saudi Arabia's market is closed for the weekend.
Emaar Properties declined 5.9 percent to 3.17 dirhams, the lowest since October 2004. The shares have dropped 36 percent this week. Arkan, a construction supplies maker, tumbled 9.8 percent to 4.04 dirhams.
To contact the reporter on this story: Haris Anwar in Dubai on Hanwar2@bloomberg.net
Posts
No comments:
Post a Comment