Market Wrap: Dubai's measure dropped to a month low as investor concerns over the regional and wider global economy prompted a sell-off
Sell, sell, sell on Dubai bourse forces shares down
Dubai's market retreated to its lowest point in more than a month as concerns over the global and regional economy prompted investors to sell their shares.
The Dubai Financial Market General Index fell 2 per cent to 1,546.65 points as shares in Emaar Properties, Dubai Islamic Bank and the only publicly listed Gulf market, DFM Company fell to new lows, weighing on the wider benchmark.
Shares in those companies slipped 3.2 per cent to Dh3.04, 2.3 per cent to Dh2.10, and 4 per cent to Dh1.20 respectively.
Industry experts said the decision by the Dubai government to cut spending by up to 25 per cent to help the emirate achieve a budget surplus of Dh3 billion to Dh3.5bn had impacted confidence and liquidity in the market.
"You need two things to stimulate the markets," said Nabil Farhat, a partner at Al Fajr Securities.
"You need to have government spending and secondly you have to have relaxed monetary policy to increase liquidity [in the market]," he said.
Gulf General Investment Company fell to its lowest level since April 14 after it emerged the Dubai-based investment company defaulted on repayments on bank loans.
GGICO retreated 6.5 per cent to 33 fils a day after the company said it defaulted on almost Dh500 million in repayments of bank loans.
The company had posted a narrowing of first quarter loss to Dh48.8m after a loss of Dh85m a year earlier. It hired HSBC Middle East as an adviser to restructure its debts due to banks.
In the capital, the Abu Dhabi Securities Exchange slipped 0.6 per cent to 2,631.83 points.
Elsewhere in the region Doha's market fell nearly 2 per cent to 8,441.35 points.