Dubai stocks lowest since 2016, Kuwait market on the rise

June 26, 2018 11:57 am


Reuters’ latest market reveals instill trepidation in GCC investors as Dubai market hits its lowest since January 2016.

Losses in Dubai were led by contractor Drake & Scull, their shares falling 10% to close at 0.9 dirhams on retail selling after it fell below a key support level of one dirham.

Despite a booming construction industry, particularly ahead of Expo 2020, contractors such as Atif Rahman, partner and director of Danube Properties, have noted in 2018 that construction costs have gone up slightly and will continue to do so, the Khaleej Times reports.

Furthermore, the Reuters report mentions that traders are saying that concerns about Drake & Scull’s business outlook and ongoing investigations against its previous management are weighing on the stock. The stock is down over 60% so far this year.

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Reuter further adds that the Dubai index fell 2.1% to close 2,868 points, a new low for the year and its lowest level since January 2016.

Air Arabia posted fresh losses as investors remained anxious about its exposure to embattled private equity firm Abraaj, which earlier this month had filed for provisional liquidation. The stock closed 1.5% lower.

Among blue-chips, Emaar Properties fell 2.7% and Dubai Islamic Bank dropped almost 2%, giving up some of the recent gains on the back of its successful rights issue.

Saudi stocks ended 0.1% lower as investors paused after a strong rally on the back of expectations that Riyadh will be added to the MSCI emerging market benchmarks. The Saudi index is up over 15% this year, the best performing index in the Gulf region.

Charles-Henry Monchau, chief investment officer at Al Mal Capital in Dubai, said overall valuations for Saudi stocks are not very attractive after the recent gains and the market can lose momentum from here onwards.

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“Investor focus would now shift back to fundamentals and the second quarter results coming in a couple of weeks, would be a good reality check of underlying trends,” he said.

Qatar stocks couldn’t hold above the 9000-point psychological barrier in early trade and the index closed down 0.8%, weighed down by blue-chips such as Industries Qatar which dropped 1.9% and Qatar National Bank which fell 1.3%.

Kuwait stocks were the odd one out among the GCC markets. The index rose 1.1%, led by gains in telecommunications company Zain which rose 2.2% and Kuwait Finance House which climbed 1.5%.

Reuters continues saying last week, MSCI said it will include the MSCI Kuwait Index in its classification review next year for a potential move from frontier to emerging markets.

And this wasn’t the first sign of trouble. We only need to look a few weeks back, here: Warning! Stocks around the GCC are taking a hit

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AMEinfo Staff
By AMEinfo Staff
AMEinfo staff members report business news and views from across the Middle East and North Africa region, and analyse global events impacting the region today.



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