Dubai Stocks Drop Most in 3 Months, Lead Gulf Slump on Earnings

By Tal Barak Harif and Arif Sharif

April 20 (Bloomberg) -- Dubai stocks dropped the most in three months, leading a slump in Gulf markets after Arabtec Holding PJSC and Saudi International Petrochemical Co. said first-quarter profit tumbled.

Arabtec, the United Arab Emirates’ biggest construction company, lost the most in two months after saying first-quarter profit declined 30 percent. Saudi International Petrochemical Co. dropped the most in two weeks. Doha Bank QSC, Qatar’s third- biggest bank by assets, fell for the first time in five days.

The Dubai Financial Market General Index slid 4.5 percent to 1,666.52, the lowest in five days and the second-biggest decline worldwide after Vietnam. Abu Dhabi shares fell for the first time in eight days, losing 2.7 percent. Before today the measures had gained 11 percent and 8.3 percent in April. Saudi Arabia’s Tadawul All Share Index retreated 0.6 percent.

First quarter earnings “aren’t enough to push the market out of the gloom,” said Vyas Jayabhanu, head of Al Dhafra Financial Brokerage LLC. in Abu Dhabi. The market “went a bit too high without any strong fundamentals,” he said.

The worst financial crisis since the 1930s has hurt Dubai’s once booming real-estate industry as banks cut back on mortgage lending and speculators fled. Dubai house prices have fallen as much as 42 percent in the past six months and are likely to drop further as new homes are completed amid waning demand, Colliers CRE Plc said in a research report yesterday.

Arabtec posted a consolidated first-quarter profit of 161 million dirhams ($43.8 million). Saudi International Petrochemical said first-quarter profit slumped 87 percent as demand for plastics and chemicals dropped because of the global financial crisis.

Doha Bank

Arabtec fell 8.4 percent to 2.19 dirhams, while Saudi International retreated 3.4 percent to 17.25 riyals.

Doha Bank lost 2.6 percent to 34 riyals after Chief Executive Officer Raghavan Seetharaman said he expects earnings to grow by less than 10 percent this year.

Saudi Research & Marketing Group fell 6.1 percent to 29.5 riyals after the newspaper publisher said first-quarter profit tumbled 65 percent to 20.5 million riyals ($5.5 million).

Oman’s Muscat Securities Market fell 3.1 percent, the Bahrain All Share Index declined 0.3 percent and Qatar’s measure retreated 1.4 percent. Kuwait’s gauge added 0.1 percent.

Aldar Properties PJSC declined the most in three months, retreating 7 percent to 3.87 dirhams. The real-estate developer that raised cash this year expects a “flat period” for property values in its home market of Abu Dhabi, Chief Executive Officer John Bullough said.

Sorouh Real Estate Co. fell 7 percent to 2.78 dirhams after the Abu-Dhabi-based real estate developer said it will reduce prices at its Alghadeer project, a 3 million square-meter development on the border between Abu Dhabi and Dubai.

To contact the reporter on this story: Tal Barak Harif in Tel Aviv at tbarak@bloomberg.netArif Sharif in Dubai at asharif2@bloomberg.net