UAE stocks slide, ending a three-day winning streak, with analysts saying worries over Dubai's debt position remain high on investors minds, despite Monday's $10 billion bailout from Abu Dhabi. "The market overreacted yesterday on the Dubai news, but this is only one problem solved and it doesn't mean the recovery phase of the company (Dubai World) is on track," says Vyas Jayabhanu, head of investments, Al Dhafra Financial Broker.
Aramex drops 9.6 per cent and Drake & Scull slides 7.4 per cent, while Emaar Properties is one of the benchmark's four gainers, climbing 3 per cent. Dubai's index falls 1.5 per cent to 1,843 points as most stocks reverse early gains. It rose 10.4 per cent on Monday in its biggest gain for 14 months after Dubai World said it would repay property unit Nakheel's maturing Islamic bond. The troubled conglomerate has asked for a standstill as it tries to restructure $26 billion of debts.
"Dubai World has to restructure ? it has finance until April but will happen after that? There are a lot of unanswered questions," says Vyas Jayabhanu, head of investments, Al Dhafra Financial Broker. Abu Dhabi's index falls 1 per cent to 2,794 points. Etisalat is the main drag, ending 6.8 per cent lower. "Abu Dhabi will remain the safe haven of the UAE ? investors are not prepared to leave cash in the Dubai market," adds Jayabhanu. "They are adopting a wait-and-see approach."
