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Dubai shares head for biggest drop in 3 months as oil tumbles
DUBAI: Dubai’s shares headed for the biggest drop in almost three months on concern Europe’s debt crisis is worsening and a slowing global economy will damp demand for oil from the Persian Gulf.
Emaar Properties PJSC, the developer of the world’s tallest skyscraper in Dubai, headed for the lowest close in four months. Tamweel PJSC, a mortgage lender, tumbled to the lowest level in three months.
The benchmark DFM General Index dropped 2.2%, poised for the biggest decline since March 7, to 1,438.75 at 11:29 am in the emirate. The Bloomberg GCC 200 Index retreated 0.4%.
Oil tumbled 17% last month, the most since December 2008, to US$83.23 a barrel, amid concerns Greece may become the first country to drop out of the euro area. United States and European stocks fell for the fourth time in five weeks.
The six-nation Gulf Cooperation Council (GCC), which includes the United Arab Emirates, Saudi Arabia, Qatar, Kuwait, Bahrain and Oman, sits on one-fifth of the world’s proven oil reserves.
Yesterday’s drop in GCC stocks followed the retreat in global financial and oil markets, said Sebastien Henin, who helps oversee US$100mil at The National Investor in Abu Dhabi.
About 56 million shares were traded in Dubai, compared with a daily 12-month average of about 139 million shares, according to data compiled by Bloomberg.
Emaar tumbled 4.5% to 2.78 dirhams, set for the lowest close since Feb 2. Tamweel lost 5.2% to 1.09 dirhams, the lowest intraday level since March 4.
Abu Dhabi’s ADX General Index fell 0.3%, Kuwait’s measure dropped 1.7% and Qatar’s QE Index fell 1.1%. Oman’s MSM30 Index retreated 0.6%. Bahrain’s index was little changed. — Bloomberg