Regional stock market indexes fell yesterday as the deteriorating global economy and fears of an international recession took their toll. There were even calls for the Government to move to halt the domestic declines. The Dubai Financial Market (DFM) lost 5.94 per cent of its value, falling to levels not seen for more than three years. Hardest hit stocks included the developer, Emaar, which was down 9.94 per cent, leaving it near a four-year low. Emirates NBD lost 7.07 per cent of its value, leaving the bank's stock at its lowest level since Dec 2004. The real estate indexes of the DFM and the Abu Dhabi exchange dropped by 9.55 per cent and 7.85 per cent respectively. "UAE real estate stocks are taking the biggest hit in the region amid the current global financial downturn," Ayman el Saheb, the director of operations at Darahem Financial Brokerage, told Zawya Dow Jones. "The market is buzzing with unconfirmed talks of projects being delayed or cancelled and a fall in property prices, and this is further hurting sentiment." Abu Dhabi's index was also hit heavily, closing down 3.95 per cent, while Kuwait's crisis-hit market lost 2.79 per cent of its value. Doha was down 5.19 per cent, Muscat lost 2.6 per cent and Bahrain shed 1.66 per cent. The Saudi Tadawul was the only Gulf market to post a rise, with the index closing up 1.82 per cent. Robert McMillen, the chairman of Mac Capital Advisors based in Dubai, said people were "at a loss" to understand the collapse. He said some stocks were trading below issue price, which investors saw as "horrendous", but that it was not heavy selling that was pushing the prices down. "The volumes are not staggering. I don't believe you'll see significant selling any more. We will be heading in this direction at least for the rest of the month." He dismissed the belief that falling oil prices were having a major impact on stock prices. Vyas Jayabhanu, the head of the broker Al Dhafra in Abu Dhabi, said investors had been disappointed that the Government had provided liquidity to the banking sector, but not to stocks. He called on the Government to take stakes in listed firms and hold them for several years to boost markets and liquidity and provide stability. "The markets are disappointed the Government has taken no steps to support the market, because they were expecting it after it provided help to the banks," he said. "Speculators and investors wanted something to coax them into buying." A head of an Abu Dhabi-based asset management house said at the moment it was "wait and see" time for the markets as investors tried to gauge the effect of the global interest rate cuts. Last week, the British and European central banks slashed lending rates to stimulate debt markets, while the week before the US Federal Reserve lowered interest rates by 50 basis points. The Central Bank has yet to follow suit, even though the dirham is pegged to the dollar. email@example.com
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