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Mon 17 Mar 2008 08:12 PM

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DP World shares continue freefall

Ports operator sinks more than 6% in trading on DIFX; has now dropped 42% since listing.

Shares in Dubai-based ports operator DP World sunk more than 6% in trading on the Dubai International Financial Exchange (DIFX) on Monday after the dollar plummeted against major global currencies.

The dollar-denominated stock fell 6.17% to 76 cents, meaning it has now dropped 33% this year to Sunday's closing price, and 42% since the stock listed in October last year.

Markets across the Gulf were hit on Monday after a surprise US rate cut and expectations of more to follow sent stocks tumbling on concerns that regional markets could be hit by the global slowdown.

The US Federal Reserve cut its discount rate - the rate at which it lends to banks - by 25 basis points on Sunday, and is expected to slash interest rates by up to 75 basis points when it meets on Tuesday.

However, the move did not ease fears over the state of the US economy, with the dollar dropping further against the Japanese yen, the Swiss franc and the euro.

In what was the Middle East’s largest initial public offering (IPO), DP World listed on October 26 at a share price of $1.30 each.

This price was the top of the indicative range of $1-$1.30 announced by the company at the start of its pricing process.

The October 26 offering was oversubscribed more than 15 times, and saw DP World valued at $4.96 billion. The company listed 3.818 billion shares, representing 23% of the company.

Some have put the drop in share price down to foreign investors liquidating their positions in view of the threat of a global recession and credit concerns, while other have said the stock may have been over-priced when it listed.

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