"The sentiment is still showing disappointment," said Marwan Shurrab, vice president and chief trader at Gulfmena Alternative Investments in Dubai. "The idea of share dilution is still sinking in the minds of investors, and they fear problems would rise with other stocks."
Shares of Arabtec Holding fell 3 per cent at 10:30am, trading at Dh1.88, the lowest since November 11. The Dubai contractor said it was seeking the approval to issue a convertible bond, in addition to issuing new shares.
The Dubai Financial Market General Index lost 0.4 per cent to 1626.54.
In Abu Dhabi, Aldar Properties lost 1.7 per cent to Dh2.25. The Abu Dhabi Securities Exchange General Index lost 0.3 per cent to 2730.12. The property developer said it was considering selling certain assets in addition to a convertible issuance.
"Investors now are unlikely to build positions in the near term, when facing dilution," Mr Shurrab said. Both stocks are blue chips in their markets, they control the sentiment, and once the negative sentiment surrounds the bluechips, you will see a sell off."
Elsewhere in the region, Kuwait's measure remained flat at 6949.40. Bahrain's measure also remained flat at 1424.88. Oman's index was unchanged at 6917.58. Qatar's measure was up at 1.6 per cent to 9137.89. The Saudi Tadawul All-Share Index is up 0.5 per cent to 6701.28.