The Dubai and Saudi markets hit their lowest points for more than a year today, wiping out earlier gains.
Shuaa investigation report adds to market pain
The Dubai and Saudi markets hit their lowest points for more than a year today, wiping out gains they had made early this week. On continued uncertainty in the global financial system, the Dubai Financial Market (DFM) plummeted 3.97 per cent, while the Saudi exchange slid severely, currently trading 5.67 per cent down. The two markets were last at these lows on May 3 and July 3 last year, respectively.
All GCC bourses lost value today, with the Abu Dhabi Securities Exchange down 2.29 per cent, Doha losing 3.69 per cent and Muscat falling 1.76 per cent. One of the big falls was the investment bank Shuaa Capital, which plunged 11.43 per cent on the DFM after a report that the Dubai Financial Services Authority (DFSA) was investigating it in relation to a purchase of DP World shares. Shuaa is the UAE's largest investment bank by market capitalisation, is reportedly under investigation for alleged irregular trading of DP World shares on March 31. Oliver Schutzmann, a spokesman at Shuaa Capital, declined to comment on 'rumours and speculation' and executives were not available for comments. DP World refused to comment. The investment bank posted a net profit of Dh400.5 million (US$109m) for the financial year ending on March 31, up 53 per cent from the previous year. Shuaa was one of four lead managers of DP World's initial public offering (IPO) in November 2007, the region's largest IPO to date. DP World is the fourth largest marine port operator in the world. Shares in DP World, which is listed on the Dubai International Financial Exchange, remained unchanged. Shuaa fell Dh0.51 to Dh3.95 (US$1.07). A DFSA statement is expected later today.
A number of other factors caused today's markets plunge ? many traders are selling stock and closing positions because of the upcoming Eid holiday, when they will not be able to trade. In addition, the US is still the focus of attention, with uncertainty around the government's $700 billion (Dh2.57 trillion) bailout of investment banks causing negative sentiment. email@example.com firstname.lastname@example.org