Arab Gulf shares fell, ignoring local earnings reports, after talks to raise the U.S.-debt ceiling broke down, threatening to jeopardize the credit worthiness of the world’s biggest economy. Shuaa Capital PSC, the investment bank controlled by Dubai’s ruler, dropped the most in a week. Emirates NBD PJSC, the biggest bank in the United Arab Emirates by assets, slid to the lowest level in almost a month.
Dubai’s benchmark DFM General Index retreated 0.2 percent to 1,520.47 at the 2pm close in the emirate, the lowest since June 29. The Bloomberg GCC 200 Index, which tracks the biggest 200 companies in the region, dropped 0.2 percent.
“Turnover is very low due to summertime and the fact that Ramadan is approaching, along with the volatility in international markets because of the debt crisis in Europe and the U.S.” said Marwan Shurrab, assistant fund manager and chief trader at Dubai-based Gulfmena Alternative Investments. “We are seeing mostly positive earnings and this is supposed to help but people are reluctant to participate.”
U.S. lawmakers must agree on a plan to boost the government’s $14.3 trillion debt limit and avert a default by August 2. House Speaker John Boehner said Saturday he and the White House are “not close to an agreement” following a meeting with House Republicans in which the speaker was described as in a gloomy mood. Euro-area leaders announced 159 billion euros ($228 billion) in new aid for Greece July 21.
About 52 million shares traded in Dubai, compared with a daily average of about 133 million shares over the past six months, according to data compiled by Bloomberg. In Abu Dhabi, about 26 million shares traded compared with a daily average of 77 million shares, the data show.
Shuaa tumbled 4.7 percent to 95 fils, the biggest decline since July 17. Emirates NBD lost 2.4 percent to 4.10 dirhams, the lowest since June 28.
National Bank of Ras Al-Khaimah, the lender known as RAKBank, rose 1.1 percent to 4.7 dirhams after second-quarter profit surged 23 percent. In Qatar, United Development Co., a Qatari investment company, advanced 0.9 percent to 20.4 riyals after first-half profit increased to 346.8 million riyals ($95 million) from 340.9 million riyals.
Abu Dhabi’s ADX General Index fell 0.2 percent, while Qatar’s measure added 0.1 percent. Saudi Arabia’s Tadawul All Share Index fell 0.2 percent. Oman’s benchmark index retreated 0.3 percent and Bahrain’s measure lost 0.4 percent. Kuwait’s SE Price Index gained less than 0.1 percent.
In Israel, the benchmark TA-25 Index rose 0.5 percent. The yield on the benchmark 5 percent Mimshal Shiklit bond due January 2020 increased one basis point, or 0.01 percentage point, to 4.99 percent.
