By Haris Anwar
Nov. 12 (Bloomberg) -- Persian Gulf shares declined for a fifth day after one of the biggest mortgage firms in the United Arab Emirates sought financing from the central bank amid a slowdown in the region's real-estate market.
Tamweel PJSC, the U.A.E.'s second-biggest mortgage provider, dropped to the lowest since listing in July 2006. Emaar Properties PJSC, the region's largest property developer, extended its four-year low and Sorouh Real Estate Co. tumbled for a fifth day. Zain retreated for a second day as it announced acquisition plans in Africa.
The Dubai Financial Market General Index tumbled 5.6 percent to 2,211.86 at 10:37 a.m. local time, bringing the decline for the week to 21 percent. The Abu Dhabi Securities Exchange General Index dropped 5.8 percent, while the Kuwait Stock Exchange Index fell 1.7 percent. Oman's Muscat Securities Market 30 Index also lost 1.7 percent.
``The real-estate sector is in the focus because people think we're going to see a decline in the property prices, and the credit crunch will hit banks,'' Chamel Fahmy, senior regional sales trader at Beltone Securities Brokerage in Dubai, said in a phone interview. ``We're still 20 percent to 25 percent away from the bottom.''
Dubai's benchmark index has lost 63 percent this year as concern deepened that the global credit crisis and slumping oil prices will slow the region's property market. Tamweel and Emaar led the decline, losing more than 75 percent each.
Credit Crunch
Borse Dubai Ltd., the parent of Dubai Financial Market PJSC and the Dubai International Financial Exchange, is in talks to refinance $4.2 billion of loans at interest rates tied to the price of credit-default swaps, raising the cost of the debt, said three bankers with knowledge of the transaction. Dubai Financial Market, the only bourse listed in region, declined 10 percent to 1.62 dirhams.
HSBC Holdings Plc and Lloyds TSB Group Plc, two of the largest U.K. banks operating in the U.A.E., yesterday said they're reducing lending there as the credit crunch begins to infect the Persian Gulf. The lending restrictions come after house prices in Dubai quadrupled in the last five years, fueling concerns that a sharp fall is imminent. The government said this week it has set up a committee to restore confidence in the real-estate market.
October 2004
Tamweel lost 9.4 percent to 1.26 dirhams. Tamweel's Chief Financial Officer Gaurav Agarwal said yesterday the company received money from the country's central bank after the cost of financing rose amid volatility in credit markets.
Emaar fell 9.6 percent to 3.38 dirhams, the lowest since October 2004. Sorouh, Abu Dhabi's second-largest property developer, declined 9.8 percent to 2.67 dirhams, bringing the five-day slump to 35 percent.
Zain dropped 2 percent to 1,000 fils. The Kuwait-based phone company with units in 22 African and Middle Eastern nations said it will base its African business in Nairobi and plans further acquisitions on the continent.
To contact the reporter on this story: Haris Anwar in Dubai on Hanwar2@bloomberg.net
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