Dubai shares fell to their lowest level in more than four months yesterday as investors reacted to fresh concerns about the Dubai World debt restructuring. Emaar Properties led the decline, with shares in the country's largest developer dropping by 10 per cent, the maximum allowed in a single session. Union Properties closed at an eight-month low and Emirates NBD, the country's largest lender by assets, lost 4.8 per cent.
Shares on the Dubai Financial Market General Index fell 5.8 per cent to 1,744.83, the lowest close since July 22. That followed a gain of 1.2 per cent on Sunday. "We've seen mass sell-out on all stocks," said Marwan Shurrab, an assistant fund manager at Gulfmena Alternative Investments in Dubai. "It's mostly investor sentiment and a perceived notion from international investors to exit the market from companies that don't have government support."
Abdulrahman al Saleh, the director general of the Dubai Department of Finance, reiterated the Dubai Government's position that there would be no state guarantee to cover Dubai World's debts. The state-controlled conglomerate may sell assets it built up around the globe during its years of rapid expansion to ensure its survival, Mr al Saleh was reported as saying on Al Jazeera's website yesterday. "The comments caused some panic among investors," said Mr Shurrab. "We saw selling from local, regional and international investors concerned about holding stock in the UAE."
Dubai World is entering discussions with creditors to restructure US$26 billion (Dh95.49bn) of debt, including a $3.5bn sukuk payable by its property unit Nakheel on December 14, after an announcement that the company was seeking a delay of payment on its debt. Emaar yesterday declined to Dh3.15 after its shares closed 3.6 per cent up on Sunday after strong losses last week. Union Properties fell 9.3 per cent to Dh0.68, with Emirates NBD closing at Dh3.77.
After Sunday's gains, the most since March, shares on the Abu Dhabi Securities Exchange General Index also fell yesterday. The exchange dropped 1.7 per cent to 2,628.24 points at the close of trading, having closed up 3.9 per cent the day before. Saudi Arabia's Tadawul All Share Index fell 0.9 per cent, while Bahrain's exchange dropped nearly 0.1 per cent. In Qatar, the exchange finished up 1.06 per cent, and Oman's MSM30 Index climbed 0.3 per cent.