Font Size

- Aa +

Mon 21 Jan 2013 02:27 PM

Font Size

- Aa +

Dubai backs off chart barrier; Aldar drops on merger

Dubai's index slips from Sunday's 32-month closing high in thin volume

Dubai backs off chart barrier; Aldar drops on merger

Dubai's index slips from Sunday's 32-month closing high in thin volume as it backs off major technical resistance, while activity in Abu Dhabi focuses on its top two property developers after they reach a long-awaited merger agreement.

Dubai declines 0.7 percent to 1,779 points. On Sunday, the index tested and failed to break chart resistance between 1,778 points, the 2012 high hit in March last year, and the October 2010 peak of 1,793 points.

Emaar Properties sheds 0.2 percent, Drake & Scull falls 1.1 percent and National Central Cooling (Tabreed) dips 2.4 percent.

There is little immediate reaction to a report in Al Ittihad newspaper quoting United Arab Emirates central bank governor Sultan Nasser al-Suweidi as saying authorities will not impose limits on mortgage lending without consulting commercial banks, and that any new rules are not imminent.

His remarks appear to show the central bank is backing away from caps on residential mortgage lending that it announced just weeks ago. But there is no confirmation of the report, and in any case some degree of climb-down by the central bank was expected.

Abu Dhabi's Aldar Properties drops 8.0 percent while Sorouh Real Estate rallies 7.4 percent; they account for nearly all trading on the UAE capital's bourse.

Sorouh shareholders would receive 1.288 Aldar shares for every share in Sorouh, which will be delisted once the merger, which is subject to shareholder appoval, is completed, the companies said on Monday.

"This is just a retail investor reaction to the share swap," says Amer Khan, fund manager at Shuaa Asset Management.

"Sorouh should be trading at about AED2.06, and that's where the market is headed. We won't know the valuation of the merged entity until we have more details."

Abu Dhabi's index is little moved, easing 0.02 percent to 2,782 points.

Elsewhere, Oman's benchmark gains 0.1 percent to 5,819 points, while Kuwait's index sheds 0.1 percent to 6,150 points.