Property and banking lead regional bourses lower as investors continue to dump stocks.
No relief for Abu Dhabi, Dubai stocks
Abu Dhabi's index slumps to a 32-week low as stocks tumble, while Dubai shares fell to their lowest level in 38 weeks. Property and banks led the bourse down in Abu Dhabi. These are the two most liquid sectors and so are easiest for investors to offload. Sorouh Real Estate and Aldar Properties each drop more than 9 per cent, while Abu Dhabi Commercial Bank reverses early gains to end 8.2 per cent lower. The index falls 2.8 per cent to 2,467 points. "Today was a continuation ? sentiment is still very bad, the outlook for banks and real estate is the reason for this massive sell off," says a Dubai-based trader who asked not to be identified.
"Bad news poured into the market this morning. There is absolutely no catalyst for a rebound ? fear is everywhere and everybody is dumping stocks." In Dubai, the index tumbles to a 38-week low as widespread confusion about the emirate's debt problems spurs more panic selling. Most heavyweight stocks fall by almost 10 per cent, the maximum allowed, and with no buyers coming in at these levels, trading is moribund for much of the session.
Emaar Properties drops 9.9 per cent and Dubai Islamic Bank and Dubai Investment Co each lose 10 per cent. The index falls 6.4 per cent to 1,533 points, its lowest close since March 19. "All Dubai-related companies will find it hard to raise finance and I think it will be harder for the Gulf as a whole," says Keith Edwards, head of asset management at Doha-based investment company The First Investor.
"(Dubai World's restructuring) will raise the cost of capital for Dubai property and investment companies." *Reuters