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Tue 2 Nov 2010 10:32 AM

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Dubai shares retreat the most in more than five months

UPDATE 3: Emaar Properties, Emirates NBD decline on Dubai's benchmark index DFM

Dubai shares retreat the most in more than five months
(Getty Images)

Dubai shares retreated the most in
more than five months, leading a drop in global equity markets, on concern
recent gains are overdone and before policy meetings by the US Federal
Reserve and Bank of Japan.

Emaar Properties, builder of
the world’s tallest skyscraper, retreated 3.1 percent. Emirates NBD slid
the most in more than a month.

The DFM General Index slipped 2.2 percent, the
worst performance among 88 equity markets tracked by Bloomberg, to 1,742.14 at
the 2 p.m. close in the emirate. The measure gained 16 percent in the past two
months. The DFM Real Estate Index slid 3.1 percent and Abu Dhabi’s property
index lost 4.8 percent after the chief executive officer of Aldar Properties
PJSC resigned. The ADX General Index decreased 1.4 percent.

”Investors are profit-taking on
Tuesday on signs that the recent rally has been exhausted,” said Mohammed Ali
Yasin, chief investment officer at financial services company CAPM Investment
PJSC. Also, there is concern that the Fed may buy less than $500 billion of
securities, he said.

The 32 companies listed on Dubai’s
benchmark index are trading at 14.6 times earnings, according to data compiled
by Bloomberg. That compares with 12.1 times earnings for Abu Dhabi’s gauge and
16 times for the MSCI Asia Pacific Index.

The Federal Open Market Committee is
meeting in Washington starting on Tuesday. Policy makers will restart a program
of securities purchases to spur growth, reduce unemployment and increase
inflation, said 53 of 56 economists surveyed last week. Twenty-nine economists
estimated the Fed will pledge to buy $500 billion or more, while another seven
predicted $50 billion to $100 billion in monthly purchases without a specified

Five stocks declined for every four
that advanced in the MSCI Asia Pacific Index, which earlier fell as much as 0.2
percent, after the Reserve Bank of Australia unexpectedly increased the
benchmark interest rate and India’s central bank raised rates for a sixth time
this year. The Bank of Japan last week advanced its policy meeting to Nov. 4-5,
following the Fed’s meeting.

Emaar decreased the most since July
25 to 3.75 dirhams and Emirates NBD, the United Arab Emirates’ biggest bank by
assets, slipped 3 percent, the most since Sept. 27, to 3.20 dirhams.

In Abu Dhabi, Aldar tumbled 6.2
percent, the most since May 25, to 2.43 dirhams. Chief Executive Officer John
Bullough left the company and his replacement will be named after a board
meeting Nov. 8.

Saudi Arabia’s gauge dropped 0.2
percent at 1:35 p.m. in Riyadh and Oman’s benchmark stock index lost 1 percent.
The Bahrain All Share Index and Qatar’s QE Index retreated 0.1 percent, while
Kuwait’s gauge advanced 0.7 percent.


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