UAE stock markets close mixed in trade on Monday; Saudi Arabia, Qatar and Oman end lower
Dubai’s stock index retreated to the lowest since March as global financial markets slumped amid concern that Standard & Poor’s downgrading of the US’s credit rating may stall the global economic recovery.
Emaar Properties, developer of the world’s tallest tower, declined 1.7 percent. Aramex, the Middle East’s largest courier company, dropped to the lowest in almost two months. The DFM General Index lost 0.8 percent to 1,473.07, the lowest since March 17, at the 2 pm close in the emirate. It had earlier gained as much as 0.9 percent after plunging 3.7 percent yesterday. The Bloomberg GCC 200 Index decreased 0.3 percent.
“There’s a lot of volatility as investors wait to see how the rest of the global markets react; sentiments are jittery,” said Mohammed Ali Yasin, chief investment officer at Abu Dhabi- based financial services company CAPM Investments. “We may see tough times in the coming few sessions based on international developments rather than what’s happening internally.”
Emerging market stocks retreated as they traded for the first time since S&P announced the one-level reduction in the U.S.’s sovereign-debt rating to AA+ on August 5. The Treasury Department said there is “no justifiable rationale” for S&P’s move, while S&P’s officials stood by their decision and laid blame on a political system that failed to adequately address deficit reduction in the compromise law that President Barack Obama signed this month to avert a default.
The MSCI Emerging Markets Index tumbled 2.7 percent after sliding 8.5 percent last week. The Standard & Poor’s 500 Index futures decreased 2.3 percent and the STOXX Europe 600 Index slid 2.1 percent. The European measure had earlier gained as much as 0.8 percent after the region’s central bank was said to start buying Spanish and Italian government bonds.
Oil for September delivery slid as much as 5 percent to $82.52 a barrel on the New York Mercantile Exchange before trading at $83.68. The six nations of the Gulf Cooperation Council, including the UAE and Saudi Arabia, supply about a fifth of the world’s oil.
Emaar dropped to AED2.83, the lowest since July 28. Aramex lost 2.8 percent to AED1.74.
“United Arab Emirates equity markets have very few companies that are directly correlated to global macro” developments, said Akram Annous, Middle East and North Africa strategist at Al Mal Capital PSC in Dubai. “This was viewed as an Achilles heel for most of the last two years, but is now providing some protection.”
Abu Dhabi’s ADX General Index gained 0.4 percent after Sunday falling 2.5 percent. Oman’s MSM 30 Index and Qatar’s QE Index declined 0.8 percent. Bahrain’s BB All Share Index lost 0.2 percent, retreating for an eighth day. The Kuwait Stock Exchange Unweighted Index also decreased 0.2 percent, while Saudi Arabia’s Tadawul All Share Index declined 0.3 percent.