Dubai Stocks Fall to December Low as Oil, Global Markets Drop

By Zahra Hankir

Jan. 26 (Bloomberg) -- Dubai’s shares fell to their lowest in more than a month, leading the drop in the Gulf, as oil declined and stocks retreated globally amid mounting concern that China is stepping up measures to cool its economy.

Emaar Properties PJSC, the United Emirates’ biggest developer, retreated the most in more than a month. Union Properties PJSC tumbled 10 percent after Credit Suisse Group AG yesterday slashed its share-price estimate. The DFM General Index dropped 3.9 percent to 1,552.01 at 12:50 p.m. in Dubai, the lowest since Dec. 10. The measure has fluctuated so far this week, alternating between losses and gains of as much as 5 percent.

“Volatility will continue” as any weakness in global markets leads to a “selloff” in the U.A.E. and good news leads to “some buying from day traders,” said Julian Bruce, director of equity sales at EFG-Hermes Holding SAE, the biggest publicly traded Arab investment bank. The longer-term performance will depend on fourth-quarter earnings and “if and when we see some developments in the Dubai World debt restructuring,” he said.

Stocks in Europe and Asia posted the longest losing streaks in more than six months on concern China will slow the world’s fastest-growing major economy. U.S. index futures also retreated. Crude oil fell as much as 1.5 percent to $74.14 a barrel.

Debt

The Dubai government said Nov. 25 the state-run holding company, Dubai World, is seeking a “standstill” accord on its debt. Dubai World failed to present a standstill offer at a Dec. 21 meeting with more than 90 lenders because it hadn’t reached an agreement on the terms of government support. Dubai World announced Dec. 1 it was seeking to alter terms on about $26 billion of debt.

Emaar dropped as much as 9.9 percent, the biggest intraday slump since Dec. 7, to 2.83 dirhams. It last traded at 2.89 dirhams.

Union Properties, Dubai’s second biggest developer by assets, tumbled the most since October 2008 to 0.54 dirham. The developer had its share-price estimate cut to 3 fils by Credit Suisse, which said the company’s debt wipes out its value.

In Qatar, the Doha Securities Market 20 Index retreated 1.7 percent. Abu Dhabi’s ADX General Index fell 0.4 percent, the Kuwait Stock Exchange Index slid 0.3 percent and Bahrain’s measure lost 0.2 percent. Saudi Arabia’s Tadawul All Share Index dropped less than 0.1 percent.

Oman’s measure climbed 0.5 percent, led by Bank Muscat SAOG. The sultanate’s biggest bank gained 4.5 percent, the most since Jan. 7, to 0.889 rial after full-year operating profit rose 37 percent. Net income for the period dropped 21 percent after the bank’s provisions for bad loans almost quadrupled.

To contact the reporters on this story: Zahra Hankir in Dubai at zhankir@bloomberg.net