Emaar plunges, closes nearly 10% down

Dubai shares posted their largest one-day loss in one month in volatile trading on Sunday, with Emaar Properties ending nearly 10 percent lower after its US unit sought bankruptcy protection.Dubai's benchmark DFMGI fell 4.33 percent, leading losses on four Gulf markets including Qatar and Kuwait and snapping a four-day run of wins.

On Thursday, Emaar's US home builder known as John Laing Homes sought Chapter 11 bankruptcy protection, citing a sharp decline in new home sales.

"Emaar looked set to shrug off the Chapter 11 filing of its US subsidiary John Laing Homes until heavy selling pressure across the board hit it nine percent lower," Matthew Wakeman, director of cash and equity linked trading at EFG-Hermes, said in his daily market commentary.

Shares in the largest Arab property developer had rallied earlier in the day, with analysts saying the market had already discounted most of the negative news and was taking heart from Emaar's now more limited exposure to the US housing market.

But Wakeman said the late sell-off was largely down to profit-taking following last week's rally spurred on by Borse Dubai's successful refinancing of a $2.5bn loan.

In Kuwait, bluechips took a hit with the benchmark falling more than 1 percent as uncertainty over the government's rescue package weighed on sentiment.

Earlier this month, the Gulf Arab state's cabinet approved a stimulus package worth 1.5 billion dinars ($5.09 billion), including state guarantees of up to 50 percent for fresh loans banks provide to local firms. The plan still needs parliament approval.

But investors have been disappointed as the rescue package, due to be debated by parliament early next month, is not designed to help Kuwait's investment companies, which have been hard hit by the global financial crisis.

National Bank of Kuwait and Mobile Telecommunications Co Zain fell 1.72 percent and 2.78 percent respectively.

Qatar's benchmark QSI declined 2.79 percent, led lower by Qatar Islamic Bank <QISB.QA> which fell 9.27 percent after going exdividend. (Reuters)