Things were too good to be true? Arabtec's stocks plummet 10%
Most markets in the Middle East and North Africa region ended the day’s trade in the red because of the Iraqi conflict. These include Saudi Arabia and Egypt’s stock markets, which opened lower and slid 1.2 per cent each.
The insurgent offensive that threatens to dismember Iraq spread to the northwest of the country on Sunday. It is not clear that events in Iraq will have any significant impact on the other Gulf Arab countries, which are insulated by big budget and current account surpluses; higher oil prices could even benefit them.
Nevertheless, the news from Iraq encouraged some foreign institutions to take profits — something they were already contemplating after gains in regional markets this year — while further dampening the appetite of some local retail investors to buy for now.
Dubai’s benchmark index dropped 4.71 per cent on Sunday to end at 4,609.28 on the back of a 10 per cent drop by powerhouse Arabtec, while the Abu Dhabi Exchange (ADX) general index went down 2.03 per cent to reach 4,831.57.
Shares in Ooredoo, a Qatar-based company that has Iraq’s second-biggest mobile telecommunications operator Asiacell as a unit, dropped 2.4 per cent.
Zain Kuwait, another major telecommunications firm with operations in Iraq, went down 1.5 per cent, as Kuwait’s index declined 1.6 per cent.
In Abu Dhabi, Dana Gas that has operations in the Kurdistan region of Iraq fell 3.6 per cent.
In Dubai, property developer, Arabtec, dropped the most allowed to reach a share price of Dh4.50. However, its stocks dominated trade on DFM, accounting for over one third of the value of trade.
The DFM website had erroneously shown that Aabar Investments cut its stake in Arabtec for a second time in a week. The website later attributed the error to a “temporary system glitch”, and said that Aabar’s stake is currently 18.94 per cent.
Other blue chips in the market also dropped. Emaar declined 5.08 per cent, Union Properties went down 5.02 per cent, Dubai Islamic Bank decreased 4.93 per cent, and Gulf General Investments Co dropped 5.81 per cent.
However, Drake & Scull International rose 1.19 per cent to reach a share price of Dh1.70.
Abu Dhabi’s Eshraq Properties marked the greatest change in a volume with a 8.15 per cent drop, while Aldar Properties declined 6.08 per cent, Dana Gas went down 4.82 per cent, and RAK Properties dropped 4.50 per cent.
Of the 32 stocks traded on DFM, 25 went down, five went up, and two remained unchanged. Of the 33 stocks traded on ADX, 22 declined, seven advanced, and four remained flat.