Local equities declined yesterday after ratings agencies late tuesday warned of possible downgrades if US lawmakers failed to enact US debt reduction measures.
Dubai's biggest fall in week
Dubai shares fell the most in a week yesterday but avoided the sharp drops seen in the US as ratings agencies warned they may downgrade the world's biggest economy.
Emaar Properties declined 1.3 per cent to Dh2.95. The Dubai Financial Market General Index was down 0.5 per cent to 1,527.42 points, the most since July 25.
But Mohammed Ali Yasin, the chief investment officer at Abu Dhabi's CAPM Investments, said: "It's encouraging we did not see the same drops as we saw in the US. What's happening abroad is putting additional pressure on these markets."
In the US, the Standard & Poor's 500 Index declined 2.5 per cent to 1,254.05 points on Tuesday after Moody's gave a negative outlook to the country's "Aaa" rating, meaning a downgrading is possible over the next 18 months.
Fitch, another ratings agency, said it would complete a thorough review of the US by the end of the month, not ruling out a negative outlook on the rating.
In Abu Dhabi, Aldar Properties lost 1.5 per cent to Dh1.26 a share. Etisalat, which holds a 33 per cent weighting on the capital's index, was up 0.9 per cent to Dh10.40 a share. The Abu Dhabi Securities Exchange General Index was up 0.1 per cent to 2,650.45 points.
Trading volumes have been historically low during Ramadan. Mr Yasin said. "There are signs high net-worth individuals are looking at opportunities [in the markets], but the volume in the market does not allow those big investors to do any trades," he said.
Kuwait's measure declined 0.1 per cent to 6,067.60 and Bahrain's index was unchanged at 1,284.36. Oman's index was down 0.9 per cent to 5,758.11 while Qatar's benchmark was down 0.3 per cent to 8,398.23. The Saudi Tadawul All-Share Index ended its trading week down 0.3 per cent at 6,423.87.