Gulf Stocks Decline on Oil Price, Spending Concern; Emaar Falls

By Haris Anwar

Dec. 1 (Bloomberg) -- Gulf shares dropped on concern a global recession will cause oil prices to decline further and companies will cut back on their spending.

Emaar Properties PJSC, the Middle East’s largest property developer, snapped a two-day advance, while Emirates Telecommunications Corp. led the retreat in Abu Dhabi. National Bank of Kuwait, the emirate’s biggest bank by assets, also sank.

The Dubai Financial Market General Index lost 1.8 percent to 1,928.96, dropping for the first time in five days. The Abu Dhabi Securities Exchange General Index fell 0.8 percent, while the Kuwait Stock Exchange Index slipped 0.3 percent.

“We didn’t get a positive news over the weekend from oil producers,” said Ali Khan, head of cash equity trading at Dubai’s Arqaam Capital Ltd. “It doesn’t seem that oil prices are going back to $75 a barrel in the near future. We’re seeing that uncertainty over the energy markets at a time when developers here are cutting back on their spending. This is not a positive catalyst for equity markets.”

Oil dropped below $53 a barrel in New York after the Organization of Petroleum Exporting Countries deferred for another two weeks a decision to reduce output. Slowing global growth means demand will be “much lower” than expected a month ago, OPEC said after the group’s Nov. 29 meeting in Cairo.

The six Gulf Arab states, including Saudi Arabia, the United Arab Emirates and Kuwait, pump almost 20 percent of the world’s daily oil supply.

Nakheel PJSC, the Dubai-owned developer of three palm-shaped islands in the Persian Gulf, said it will reduce its workforce by 15 percent as its scales back projects, including the Trump Tower, citing the global credit crunch.

Oman’s Muscat Securities Market 30 Index slipped 0.3 percent, while the Bahrain All Share Index declined 0.3 percent.

Emaar dropped 0.7 percent to 2.91 dirhams. Etislat, as Emirates Telecommunications is also known, retreated 1.6 percent to 12.25 dirhams. National Bank of Kuwait lost 3.7 percent to 1,560 fils.

To contact the reporter on this story: Haris Anwar in Dubai on hanwar2@bloomberg.net.