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Mon 13 Dec 2010 10:49 AM

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Dubai shares slump to 3-month low on property, earnings concern

Oman's index MSI makes its largest decline for six weeks

Dubai shares slump to 3-month low on property, earnings concern
STOCK WATCH: Kuwaits Zain hit a three-week high and other bluechips also rose

Dubai shares retreated to the
lowest in almost three months after Standard Chartered forecast
home prices in the emirate will fall in 2011 and on concern gains in
the second half have outpaced earnings prospects.

Properties, builder of the world’s tallest skyscraper, dropped the
most in more than a month and Arabtec Holding Co. declined two percent.
The DFM General Index slumped 1.4 percent to 1,653.61, the lowest close
since September 16. Abu Dhabi’s gauge retreated 0.8 percent, the most since
November 2, as Aldar Properties fell. Dubai’s measure has gained 13
percent in the second half, while Abu Dhabi’s is up 9.2 percent.

“There are
still challenges facing the real-estate sector,” said Waleed Al
Khateeb, senior finance manager at Dubai-based Daman Securities.
“There’s some investor concern fourth-quarter earnings will disappoint.”

Dubai home
prices, which dropped almost 60 percent since the market’s peak in
mid-2008, will fall five percent and commercial property prices 10 percent
next year, Standard Chartered said yesterday. Property prices in
Dubai will bottom out in the next 18 to 24 months, economists at the
bank wrote in a report.


Emaar fell 2.4
percent, the most since November 2, to AED3.60 dirhams. Arabtec, the biggest
construction company in the United Arab Emirates, dropped to 1.97
dirhams, the lowest since December 1.

Aldar, Abu
Dhabi’s largest developer, declined 3.3 percent to AED2.35. The
company said November 9 it is in the final stages of discussions with the
Abu Dhabi government regarding its funding requirements. Aldar has AED22.4bn ($6bn) of debt outstanding, including AED11.8bn due in 2011, according to data compiled by Bloomberg.

The QE Index in
Qatar decreased 0.6 percent, trimming the gain to 6.8 percent since
winning on Dec. 2 the rights to host the 2022 soccer World Cup. The
Kuwait SE Price Index slipped 0.3 percent and Oman’s MSM 30 Index fell
0.8 percent.

Bahrain’s gauge was little changed. Saudi Arabia’s Tadawul All Share Index gained 0.7 percent.

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