By Haris Anwar
Nov. 18 (Bloomberg) -- Persian Gulf shares declined, as global markets retreated on economic concern and Citigroup Inc. said Dubai is the most vulnerable in the region to the global slowdown. Abu Dhabi's measure advanced.
Emirates NBD PJSC, the United Arab Emirates' biggest bank, fell for a ninth day. Saudi Basic Industries Corp. declined to the lowest in more than four years after al-Eqtisadiah reported the Arab world's largest company by market value cut prices of reinforced steel. Saudi British Bank dropped after being fined by the regulator for breaching market regulations.
The Dubai Financial Market General Index declined 5.1 percent to 2,033.14. Saudi Arabia's Tadawul fell 3.9 percent to 4,969.96, the lowest close since March 2004. The Bahrain All Share Index lost less than 0.1 percent.
``The negative behavior of the global markets is putting our markets under pressure too,'' John Sfakianakis, chief economist at Saudi British Bank in Riyadh, said in a telephone interview. ``Oil prices are considerably weak and they've enough momentum to go further down.''
Stocks in Europe and Asia declined for a second day, led by financial companies and commodity producers, and U.S. index futures fell on concern the deepening recession will erode profits. Crude oil slid to the lowest in almost 22 months, falling to as low as $54.13 a barrel on the New York Mercantile Exchange. Prices have tumbled 63 percent since reaching a record $147.27 on July 11.
Vulnerable
Dubai has the most vulnerable economy in the Gulf to lower oil as real-estate prices and debt refinancing pose ``real risks,'' Citigroup said in a report today.
The emirate ``has been booming on the oil surpluses'' from neighboring Gulf states and Russia, Citigroup's Mushtaq Khan wrote in the report. ``Dubai's two specific concerns are its real estate sector and how it will refinance the debt it has built up in recent years.''
Emirates NBD retreated 3.6 percent to 4 dirhams, bringing the nine-day slump to 32 percent.
Saudi Basic dropped 9.8 percent to 50.5 riyals as it cut prices of reinforced steel by 800 riyals ($213.3) a ton, bringing the reduction to 60 percent since September, as it seeks to support the local market, al-Eqtisadiah reported, citing a company statement.
Saudi British Bank, 40 percent-owned by HSBC Holding Plc, declined 1.6 percent to 61 riyals. The brokerage unit was fined 200,000 riyals ($53,300) for breaching market regulations, the Capital Market Authority said yesterday in a statement to the Saudi bourse.
Abu Dhabi's Gain
The Abu Dhabi Securities Exchange General Index rose 1.3 percent to 2,883.78.
``There are rumors that government funds are buying heavily into Aldar and Sorouh,'' Motaz Irshaid, an institutional trader at Al-Futtaim HC Securities in Dubai, said in a telephone interview. ``People are also expecting that Abu Dhabi will help Dubai overcome its financial problems. The market could stabilize around these levels if this momentum picks up.''
The global economic slowdown will force Dubai to rely on neighboring Abu Dhabi or the United Arab Emirates to repay debt, Moody's Investors Service said last month. Dubai borrowed to build the world's tallest tower, create palm tree-shaped islands and become a financial and tourist hub.
Aldar Properties PJSC, the largest developer in Abu Dhabi, surged 7.6 percent to 4.98 dirhams. Sorouh Real Estate Co., Abu Dhabi's second-largest property developer by market value, climbed 6.5 percent to 3.13 dirhams.
Oman's Muscat Securities Market 30 Index rose 1.4 percent and Qatar's DSM 20 Index climbed 2.8 percent. The Kuwait Stock Exchange Index added 0.4 percent.
The following stocks also rose or fell in the region. Stock symbols are in parentheses after company names:
Al Aman Investment Co. (ALAMAN KK), the Kuwaiti real-estate developer, gained 2.4 percent to 170 fils after it received approval from the Central Bank of Kuwait to buy back 10 percent of its shares.
Almarai Co. (ALMARAI AB), the Saudi food producer, dropped 2.6 percent to 134 riyals. Shuaa Capital PSC cut its price estimate on the shares by 14 percent to 161.8 riyals.
Jazeera Airways KSC (JAZEERA KK) added 5.1 percent to 206 fils. The low-cost carrier with hubs in Kuwait and Dubai raised $70 million from DVB Bank AG and Natixis Transport Finance to fund the purchase of two new Airbus SAS A320 planes.
Masraf Al Rayan (MARK QD) climbed 8.4 percent to 9.05 riyals. Qatar's second-largest Islamic bank plans to raise capital by selling a 20 percent stake to the Qatar Investment Authority.
To contact the reporter on this story: Haris Anwar in Dubai on Hanwar2@bloomberg.net
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