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Thu 5 Nov 2009 10:18 AM

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Dubai extends slide; Abu Dhabi also falls

UPDATE 6: Dubai's DFM falls 1.9% as a late rally enables it to rebound from an intraday low.

Dubai's index DFM ended lower for the sixth session in eight, with property-related stocks again the major losers as volumes fall to a seven-week low.
Emaar Properties

dropped 3.5 percent,

slid 3.8 percent and

lost 2.7 percent.

Dubai's index fell 1.9 percent to 2,098 points as a late rally enabled it to rebound from an intraday low of 2,074.

World markets were down on Thursday, with investors reducing positions ahead of the release of US jobs data later in the day.

"The correlation between Gulf and US markets has been exaggerated - we've faced selling pressure all week after US markets fell sharply last Friday," said Mohamed Abu Ghoush, head of equities brokerage at Ah Ahli Bank.

"It's time for Gulf investors to realise this is an overreaction and start rebuilding positions at these lower levels - today's seller might be tomorrow's buyer."

On Wednesday, ratings agency Moody's downgraded five Dubai government-linked firms, but Matthew Wakeman, EFG-Hermes managing director for cash and equity-linked trading, said this had no effect on the market.

"Moody's adjustments to Dubai GRIs (government-related issuers)... will affect their cost of funding but wasn't a factor in the market moves today in my view," said Wakeman.

DP World

was one of this quintet and its shares are steady, rising 0.2 percent, although they have fallen 16 percent since Oct 26.

Abu Dhabi's benchmark ADI also declined for the sixth time in eight sessions as volumes fall to a two-week low.

Sorouh Real Estate

was the most active stock, claiming a fifth of all shares changing hands on the index, and it dropped four percent, which meant it is down by about a quarter in a little over three weeks. Technical analysis points to further declines in the stock, said Shiv Prakash, a MAC Sharaf Securities analyst.

None of Abu Dhabi's 15 largest stocks advanced.
Abu Dhabi National Energy Co (Taqa)

dropped 3.6 percent.

Industries Qatar

rallied after the company says a new plant will almost double its fertiliser capacity, but the Doha index QSI closed lower for the second time in three sessions.

Industries Qatar

rose 0.7 percent. On Thursday, the government-linked firm said the completion of the Qafco-6 plant would raise the urea production capacity of its unit, Qatar Fertiliser Co (Qafco), to 5.6 million tonnes a year by 2012.

"If Qafco can guarantee the sale of this new urea capacity, this should be very positive for the company's revenues and bottom line," said Hala Fares, an analystat
Shuaa Capital


Banks weighed, with
Qatar National Bank

Doha Bank

losing 0.6 and 2.1 percent respectively.

The index slipped 0.1 percent to 6,953 points.

A late rally helped Kuwait benchmark KWSE end slightly higher, rising 0.1 percent to 7,334 points.


fell 3.3 percent, a day after European telecoms operator Millicom said there could be opportunities to pick up some of its Kuwait rival's African assets.

Bahrain's measure BAX climbed 0.1 percent to 1,507 points.

Oman's index MSI ended slightly lower in muted trading as banks weigh, with daily volumes at their second-lowest level in the past 17 weeks.

Bank Muscat

National Bank of Oman

fell 1.5 and 1.6 percent respectively, but
Oman Telecommunications Co (Omantel)

provided some support, rising 1.7 percent.

"We're still waiting for the results of three of the big stocks - Oman,
Galfar Engineering

Renaissance Services

," said Adel Nasr, United Securities brokerage manager in Muscat.

"Oman has seen selling pressure from foreign institutions for the past four days, while the contribution of retail investors has been very low."


fell 2.7 percent, while

dropped 2 percent.

The index fell 0.1 percent to 6,333 points. (Reuters)

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