Stock News: Dubai Leads Losses As Oil Drags Gulf Down

Most stock markets in the Gulf fell on Monday after oil prices sank to new lows and Dubai’s index dropped as investors dumped shares in Emaar Properties, which had gone ex-dividend.

Dubai’s bourse fell 3.3 per cent to 4,031 points and Emaar tumbled seven per cent late in the session to Dhs8.32; both hit five-month lows.

While there was no fundamental reason for such a steep drop by Dubai’s biggest listed property firm, the most likely explanation was a sell-off by investors who had held it for a dividend payout, said Shakeel Sarwar, head of asset management at Securities & Investment Co in Bahrain.

The record date for Emaar’s special Dhs1.257 dividend was Nov. 30 and the stock has since plunged 21.5 per cent. It has major technical support at Dhs7.95, the June low.

Most other Dubai stocks also fell, with the exception of low-cost carrier Air Arabia, which jumped two per cent to Dhs1.56. The stock has gained 18.2 per cent since the end of October, becoming a safe haven in an otherwise bearish market; it faces strong chart resistance at Dhs1.65-1.68, this year’s peaks.

With fuel making up a significant part of Air Arabia’s costs, the company stands to benefit from cheaper oil.

Abu Dhabi’s bourse was mixed and its main index fell 0.9 per cent. First Gulf Bank and Union National Bank fell 1.1 and 3.8 per cent respectively, while National Bank of Abu Dhabi rose 1.6 per cent.

Oman’s bourse stabilised and inched up 0.1 per cent after tumbling 4.2 per cent in the previous session. Banking stocks, which had dropped when rating agency Standard & Poor’s cut its outlook for Oman’s credit rating to negative, rebounded with HSBC Oman and Ahli Bank up 4.5 and two per cent respectively.

However, Raysut Cement, which had fallen its daily 10 per cent limit on Sunday, dropped a further 3.2 per cent. The firm said on Sunday that the price it paid for gas supplies would double next year, as the government responded to the oil price drop by cutting subsidies.

SAUDI, EGYPT

Saudi Arabia’s index fell 1.7 per cent as nearly all stocks in the key petrochemical and banking sectors declined.

Saudi Basic Industries dropped three per cent and its subsidiary Yanbu National Petrochemical Co (Yansab), which last week proposed a dividend cut and announced plans to shut down a plant for maintenance, fell 1.3 per cent.

Brent crude oil fell more than $2 a barrel on Monday to a new five-year low on predictions that oversupply would keep building until next year after OPEC decided not to cut output. Cheaper oil may eat into the margins of Gulf petrochemical producers, which have previously enjoyed cost advantages thanks to subsidised feedstock.

Oil importer Egypt’s stock market rose for a fourth straight session, adding 0.5 per cent. Carpet maker Oriental Weavers surged 6.1 per cent to 60 pounds, its highest level since early 2006.

The company said last week it would launch two new carpet manufacturing plants and one plant to produce threads. The Daily News Egypt newspaper also quoted its founder Mohamed Farid Khamis as saying sales would grow 5.5 per cent this year.

Shares in property developer Heliopolis Housing jumped 4.8 per cent after its annual meeting approved a dividend of 1.0 pound per share, up from last year’s 0.85 pound, according to Reuters data.