UAE shares slide as crisis hits US financial sector

Shares in Dubai retreated for a fourth day, losing 1.7 per cent at 4,044.27 on Monday as Gulf Arab indexes fell due to a drop in oil prices and after investors fled emerging markets fearing further declines from a US investment bank’s bankruptcy.

The Abu Dhabi bourse also dropped sharply, tumbling 4.4 per cent to close at 3,754.49 points, although analysts ruled out any direct connection between the declines in the UAE and global markets.

“While the UAE is open to foreign investments, financial crises in the West are not directly influential here, only indirectly,” said Hiba Azar, a senior broker at Shaheen Financial Brokers.

She noted that the Dubai Financial Market (DFM) General Index initially lost eight per cent on Monday, but posted a net loss of 1.7 per cent due to new capital being pumped into the market. The bourse lost 31.8 per cent so far this year. Emirates NBD, the country’s biggest bank by assets, was among the biggest losers in Dubai with a fall of about five per cent to Dh9.21 as the banking sector weighed down the main index. Commercial Bank of Dubai, the emirate’s fourth-largest bank, lost 4.9 per cent to Dh9.65.

The worsening financial crisis in US also brought speculation of a weaker demand for energy, prompting oil prices to drop below US$93 a barrel in London on Monday, the lowest level since February. Abu Dhabi Commercial Bank and United National Bank retreated 9.4 per cent each to Dh3.41 and Dh6.11 respectively on ADX, which dropped 17.5 per cent so far this year. Saudi Arabia’s Tadawul All-Share Index, the Arab world’s biggest stock exchange, fell sharply and headed to its lowest close since July 2007.

DP World plummeted to a record-low 9.7 per cent to US$0.56 since listing on the DIFX, while Depa Limited plunged 5.5 per cent to US$1.03.