Dubai, Qatar Stocks Lead Drop in Gulf on European Debt Crisis, Oil Slump
By Zahra Hankir - May 09, 2010
Dubai and Qatari shares slumped, leading a drop in the Gulf, after global stocks tumbled on concern Europe’s debt crisis will spread beyond Greece and slow the global economic recovery. Crude oil fell to $75 a barrel.
Air Arabia PJSC, the Middle East’s largest low-cost carrier, retreated the most in more than a month as first- quarter profit fell 51 percent. Emaar Properties PJSC, the developer of the world’s tallest skyscraper, dropped to the lowest since March. The DFM General Index slid 3.3 percent, the most since Feb. 14, to 1,677.49 as of 11:32 a.m. in Dubai. Qatar’s benchmark index, the QE Index, tumbled 4 percent
“The international melt-down scenario related to Greek sovereign debt” is pushing Arab markets lower, said Dubai-based Yazan Abdeen, a fund manager at ING Investment Management (Dubai) Ltd. “If you think in the gloom scenario, international demand falls and hence oil, and that leads to less sovereign government revenue.”
Stocks fell globally last week on concern Europe will be unable to contain the spiraling government debt crisis. European shares tumbled the most in 18 months before euro-region leaders met in Brussels to endorse the Greek bailout. Moody’s Investors Service said banks in Portugal, Spain, Italy, Ireland and the U.K. could be at risk as the threat of contagion grows. The MSCI World Index slid 2.3 percent to 1,099.58 on May 7, the lowest close since Feb. 8.
16 Months
Crude oil tumbled to $75.11 a barrel, capping its biggest weekly decline in 16 months. The six nations of the Gulf Cooperation Council supply about a fifth of the world’s oil. Shares in Saudi Arabia, the world’s biggest oil exporter, declined 4.4 percent yesterday.
Air Arabia retreated 3.9 percent, the most since April 1, to 90.3 fils. The airline said net income fell to 50 million dirhams ($13.6 million) as fuel prices rose and it cut fares to lure passengers amid slowing economic growth in the Middle East.
Emaar dropped 4.7 percent to 3.67 dirhams, the lowest intraday level since March 21.
“The sell-off in the regional market should not be sustainable,” Abdeen said. “Value is rising and it is time to invest.”
The Kuwait Stock Exchange Index retreated 2.2 percent, the most in more than five months. Oman’s MSM30 Index slid 1.4 percent and Bahrain’s gauge dropped 1.5 percent. Abu Dhabi’s index decreased 1.4 percent.
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