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Sun 14 Dec 2014 10:28 AM

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Dubai market falls to 11-mth low as oil prices continue to tumble

Developer Emaar Properties was down 6.2%, while builder Arabtec Holding lost 7.5% in early trading

Dubai market falls to 11-mth low as oil prices continue to tumble
Dubai stock market

Dubai's stock index fell sharply in early trade on Sunday after the price of oil hit a new low on Sunday; other Gulf markets were also bearish.

The Dubai benchmark tumbled 5.0 percent to 3,415 points, an 11-month low, as nearly all traded stocks fell. Developer Emaar Properties was down 6.2 percent and builder Arabtec Holding lost 7.5 percent.

The main index in neighbouring Abu Dhabi dropped 2.5 percent. Kuwait slid 1.0 percent and Oman edged down 0.3 percent.

Brent crude dropped nearly 3 percent and settled at below $62 a barrel on Friday after the International Energy Agency cut its outlook for demand growth in 2015.

A plunge in the Gulf equity markets triggered by oil's decline has wiped out roughly $150 billion of value since the end of October and selling may continue as few people are willing to call a bottom for the markets just yet.

Investors' main concern is that governments in the region may start to cut spending in line with falling oil export revenues. Many analysts believe that most governments will comfortably be able to maintain spending, but Oman and Bahrain will be under pressure because of their lower fiscal reserves and higher fiscal break-even prices.

Mosa 4 years ago

Everyone knew this is going to happen, due to the increasing cost of living and inflation, from regular consumers to large industries everyone has cut down on spending, and so - the oil market had to suffer as the oil demand dropped significantly since everyone began cutting down on their expenses whether it was traveling, transportation, industrial requirements etc., and now we are in a bottle neck - clueless about what's going to come.

$150 billion wipe out off the markets is not a small thing!