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 and oil plunged to a 21-month low.
Emaar Properties PJSC slid to the lowest in more than four years as the Middle East's largest real-estate developer said it is reviewing its recruitment policies amid the property slowdown. Arkan Building Materials Co. dropped to the lowest in seven months. Industries Qatar, which taps the largest natural gas field to make petrochemicals, declined to the lowest since April last year.
The Dubai Financial Market General Index tumbled 4.9 percent to 2,106.41. The gauge lost 25 percent this week as concern deepened that the global credit crisis and slumping crude prices will slow the regional property market. The Abu Dhabi Securities Exchange General Index dropped 1.5 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.''
Kuwait suspended trading as a court ordered its closure to protect investors from further losses after the bourse's main index slid to the lowest since July 2005. The Kuwait Stock Exchange Index fell 1.8 percent to 8,691 before trading was stopped at 9:47 a.m. local time. The measure declined 10 percent this week.
Kuwait's Closure
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 a phone interview from Kuwait City today.
``This is a negative development for all regional markets,'' said Sherif Abdel Khalek, regional sales executive at Beltone Securities Brokerage in Dubai. ``Closing down the stock exchange will not solve the problem. It will add to the negative sentiments.'' Kuwait is the only Gulf exchange to suspend trading this year because of the global credit crisis.
Kuwait's benchmark has lost 31 percent this year, while Dubai's measure slumped 64 percent. Today's drop left Dubai's benchmark index valued at 5 times the earnings of its 29 companies, the lowest level since at least February 2007, data compiled by Bloomberg show. Abu Dhabi's index trades at 6.8 times profit. The MSCI Emerging Markets Index is valued at 7.8 times earnings.
U.A.E.'s Property Market
Dubai property buyers will lose 30 percent of what they have paid if they default, cancel, or breach their purchase contracts, Gulf News reported, citing the Land Department.
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.
Emaar declined 5.6 percent to 3.18 dirhams, the lowest since October 2004. The shares have dropped 36 percent this week. ``To address the new challenges we face, it is important to reorient our growth strategies and align our business model to tackle new realities,'' Emaar said today in an e-mailed statement.
Oil's Drop
Arkan, the Abu Dhabi-based construction supplies maker, tumbled 4.7 percent to 4.27 dirhams, the lowest since April 14.
Oman's Muscat Securities Market 30 Index lost 2.4 percent. In Qatar, the DSM 20 Index retreated 2.6 percent, while the Bahrain All Share Index declined 0.9 percent. Saudi Arabia's market is closed for the weekend.
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.
Industries Qatar tumbled 5.7 percent to 77.6 riyals.
The following stocks also rose or fell in the region. Stock symbols are in parentheses after company names:
Aldar Properties PJSC (ALDAR UH), Abu Dhabi's largest developer by market value, gained 2.6 percent to 4.3 dirhams. HSBC Holdings Plc yesterday reiterated its ``overweight'' recommendation on the stock as it provides ``the best shelter'' amid regional downturn because of the company's strong ties with the government.
Arab Insurance Group BSC (ARIG UH) dropped 8.6 percent to 2.55 dirhams in U.A.E. trading. The Bahrain-based insurer said its third-quarter loss widened to $22.3 million.
Dubai Islamic Insurance & Reinsurance Co. (AMAN UH) fell 9.8 percent to 1.48 dirhams. The insurer known as Aman said its third-quarter loss widened on losses from investment income.
To contact the reporter on this story: Haris Anwar in Dubai on Hanwar2@bloomberg.net
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