DUBAI: Dubai stocks slumped on Monday to its lowest since January 2016, led by losses in contractor Drake & Scull, while Saudi stocks slipped after gains ahead of index compiler MSCI’s move to lift Riyadh to its emerging markets benchmark.
Drake & Scull shares fell ten percent to close at 0.9 dirhams on retail selling after it fell below a key support level of one dirham.
Concerns about Drake & Scull’s business outlook and ongoing investigations against its previous management are weighing on the stock, traders said. The stock is down over 60 percent so far this year.
The Dubai index fell 2.1 percent 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 percent lower.
Among blue-chips, Emaar Properties fell 2.7 percent and Dubai Islamic Bank dropped almost 2 percent, giving up some of the recent gains on the back of its successful rights issue.
Saudi stocks ended 0.1 percent 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 percent this year, the best performing index in the Gulf region.
Charles-Henry Monchau, chief investment office 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.
“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 failed to sustain themselves above the 9000-point psychological barrier in early trade and the index closed down 0.8 percent, weighed down by blue-chips such as Industries Qatar which dropped 1.9 percent and Qatar National Bank which fell 1.3 percent.
Kuwait stocks were the only exception in the Gulf market where most stocks were down. The index rose 1.1 percent, led by gains in telecommunications company Zain which rose 2.2 percent and Kuwait Finance House which climbed 1.5 percent.
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.
SAUDI ARABIA
* The index dropped 0.1 percent to 8,342 points.
DUBAI
* The index fell 2.1 pct at 2,868 points.
ABU DHABI
* The index added 0.3 percent to 4,537 points.
QATAR
* The index lost 0.8 percent to 8,937 points.
KUWAIT
* The index rose 1.1 percent to 4,866 points.
BAHRAIN
* The index shed 0.4 percent to 1,302 points.
OMAN
* The index lost 0.2 percent to 4,583 points.
EGYPT
* The index gained 0.4 percent to 16,458 points. $1 = 3.6730 UAE dirham)
Source: Brecorder
