Drake & Scull leads losses on Dubai index

INDEX DROPS OVER 2% TO TOUCH ITS LOWEST LEVEL SINCE LATE 2015

Dubai’s main equity index fell 2.09 per cent yesterday to end the day at its lowest level since late 2015, at 2,867.85 with most stocks ending in the red.

The losses on the Dubai Financial Market (DFM) were led by Drake and Scull International, whose share prices plunged 10 per cent, the maximum daily decline permissible for a stock on the Dubai bourse.

Drake and Scull ended the day at Dh0.9, bringing its decline so far this year to over 60 per cent, according to DFM data.

Concerns about its performance and turnaround plan have dragged the share down.

The company’s shares were the most actively traded on the DFM yesterday, accounting for 27 per cent of the total traded value.

“Drake and Scull’s weakness and the significant drop today has intensified the selling the pressure on most of the stocks on DFM. There are concerns on the second-quarter results. The news on Amanat’s acquisitions also did not trigger a positive reaction, so stocks closed lower,” said Tariq Qaqish, managing director of Menacorp’s asset management division.

A Bloomberg News report citing unnamed sources said Dubai-based Amanat Holdings has signed an initial agreement to acquire stakes in Middlesex University’s Dubai campus for around $100 million (Dh367.3 million).

The company is buying the stake from Abraaj, the private equity group that filed for liquidation earlier this month, raising concerns in the market about the listed companies with exposure to it.

Blue chip Emaar also dropped, ending the day 2.69 per cent lower as Dubai Islamic Bank fell 1.99 per cent, and Arabtec slid 5.61 per cent.

Fund managers believe that despite attractive valuations on the UAE’s stock markets, investor sentiment remains negative due to fundamental issues with various stocks around corporate governance and a lack of transparency.

The DFM index is down nearly 15 per cent this year.

In Abu Dhabi, the main stocks index inched down 0.29 per cent to 4,537.30 as heavyweights including Aldar Properties and First Abu Dhabi Bank slid 1.49 per cent and 0.41 per cent respectively.