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UAE stock markets continue to slump on Dubai World concerns
(Xinhua)
Updated: 2009-12-08 21:18 ABU DHABI: Stock markets in the United Arab Emirates (UAE) plunged in free fall Tuesday due to increasing selling pressure as a result of Dubai World's debt issue, a local newspaper reported.
Continued selling pressure dragged UAE stock markets down in the early afternoon, as DFM heavyweights Arabtec, Deyaar, Emaar and Takaful all fell more than 9 percent, the report said. Only Bahrain's Al Salam Bank, listed in Dubai, was in the green. Emaar has fallen more than 30 percent in the five trading sessions since Dubai World asked for a debt restructuring. Air Arabia and Emaar were the most actively traded stocks with unusual high volumes. At the Abu Dhabi Securities Exchange (ADX), the index fell 3.22 percent to 2541.10, with RAK Ceramic, Abu Dhabi National Hotels, Al Khazna Insurance and Arkan Building Materials all down more than 9 percent. Nasdaq Dubai, the only international stock market in the Middle East, dived 6.83 percent to 1514.65 points. DP World, a subsidiary of Dubai World, went down 4.93 percent. Dubai World said last week that DP World, the world's fourth largest port operator, will not be part of its debt restructuring plan. According to Gulf News, analysts have pointed out that the selling pressure is not likely to ease until there is concrete news about the restructuring of Dubai World and information about the outcome of talks with creditors. High volumes indicate that mostly foreign funds are withdrawn from the markets, the newspaper said. However, some analysts believe that especially the Dubai stock market is already oversold, and -- as soon as the restructuring is in place -- investors will take their chance and accumulate cheap stocks again, it added. The government of Dubai, a member of the oil-rich federation UAE, announced on November 25 that it would ask the state-owned Dubai World's creditors to agree to a debt moratorium of at least six months as a first step towards restructuring. The announcement, described by ratings agency Standard and Poor 's as a default, provided the focus for global financial markets and media, affecting stock markets around the world. A meeting with Dubai World's creditor banks is scheduled for this week regarding the restructuring of its 26 billion US dollars debt, of which a 3.5-billion-dollar Islamic security, or Sukuk, is due next Monday. |
