Dubai Shares Head For Lowest Since January As OPEC Cuts Forecast

The DFM General Index dropped 3.3 percent to 3,753.46 at 10.38am local time, bringing its decline so far this week to 10 per cent, the worst since October.

Emaar Properties PJSC, the real estate developer that accounts for about 18 per cent of the gauge, is headed for the lowest close since February. The ADX General Index in neighboring Abu Dhabi, home to almost six per cent of the world’s proven oil reserves, sank 2.6 per cent to the weakest since July.

“We are highly correlated at least psychologically with the international markets, especially the reaction towards oil price,” Wadah Al Taha, chief investment officer at Al Zarooni Group, said by telephone.

“We will probably head down further in the next few sessions. Some foreigners may be exiting the market, probably selecting other attractive emerging markets that may benefit from a decline in oil prices.”

Equity markets worldwide tumbled after the 12-member Organization of Petroleum Exporting Countries yesterday cut its forecast for demand next year to the lowest level in 12 years, raising concern over the strength of the global economy and leaving investors contemplating when oil’s plunge will reach a bottom. Brent Crude fell below $65 a barrel for the first time since 2009.

The selloff sent the MSCI All-Country World Index and the Standard & Poor’s 500 Index to their biggest drop in two months yesterday. In Saudi Arabia, the world’s biggest oil exporter, the Tadawul All Share Index retreated to the lowest in a year.

Emaar declined 5.5 per cent to Dhs7.51. Dubai Islamic Bank PJSC, the second-biggest stock on Dubai’s gauge, lost 5.2 per cent to Dhs6.35, the lowest since July.