x Abu Dhabi, UAESaturday 22 July 2017

MSCI news deflates bourses

The UAE's markets plummet after MSCI declines to upgrade either the Emirates or Qatar to "emerging market" status.

The Abu Dhabi Securities Exchange General Index fell 1.2 per cent to 2,413.24. Sammy Dallal / The National
The Abu Dhabi Securities Exchange General Index fell 1.2 per cent to 2,413.24. Sammy Dallal / The National

UAE stocks fell yesterday after a decision by the index compiler MSCI not to upgrade the Emirates and Qatar to "emerging-market" status. Companies that had been expected to form part of the index lost the most in the market downturn.

The Abu Dhabi Securities Exchange General Index fell 1.2 per cent to 2,413.24, its lowest level since March 2009.

The Dubai Financial Market General Index fell 1.2 per cent to 1,367.49, at one point trading within 10 points of the year's low, which was reached last month.

Meanwhile, Qatar's QE Index slipped 0.1 per cent to 8,752.87.

Stocks that were regarded as possible candidates for inclusion, such as Emaar Properties and First Gulf Bank, were targeted in the sell-off.

Emaar, which has the largest weighting on Dubai's main index, fell 4.3 per cent to Dh2.65.

First Gulf Bank, which had risen more than 13 per cent in the three weeks before the MSCI's announcement yesterday morning, fell 3.7 per cent to Dh15.50.

Given the scarcity of listed companies in the UAE's most profitable and rapidly growing sectors, investor interest remained wanting, said Jassim Alseddiqi, the chief executive of Abu Dhabi Capital Management.

"The UAE stock markets are not deep enough to reflect the economy. If there had been a wider variety of listings, the market declines of the past few years would have been smaller," he told Reuters. "Apart from Dana Gas, energy is not represented, and nor is tourism."

Brent futures rose US$1.74 to $105.71 yesterday after falling on Wednesday when Opec agreed to a higher production ceiling. Also yesterday, Omani and Kuwaiti stocks fell and Bahrain's were flat. The Saudi index was closed.

ghunter@thenational.ae