Doha: Qatar Exchange ended in the red yesterday when trading closed at 12,323.45 points down 112.60 points or 0.91 percent from the previous closing of 12,436.05 points on Monday.
Among the top losers were Qatar National Bank whose share was down 2.22 percent to QR172.10, Industries Qatar lost 2.51 percent to QR174.50, Doha Bank fell 2.41 percent to QR56.60 and Salam International decreased by 3.26 percent to QR16.62.
Meanwhile, bourses in the United Arab Emirates suffered their biggest losses in many months as a slide in construction firm Arabtec, Dubai’s most heavily traded stock, triggered a chain of margin calls that forced a broad sell-off.
Dubai’s benchmark closed down 6.7 percent, its biggest daily loss since last August, after tumbling as much as 8.7 percent at one stage. At least 10 stocks fell their 10 percent daily limits. Abu Dhabi’s bourse sank 3.4 percent, its biggest drop since January 2011, with eight stocks limit-down.
Arabtec was a catalyst for yesterday’s sell-off as the stock was the first to go limit-down after the company said it had laid off some staff. The announcement followed a move by major shareholder Aabar Investments to reduce its stake in Arabtec earlier this month, and the resignation of the company’s chief executive Hasan Ismaik last week.
The drop extended the stock’s loss this month to 53 percent. This triggered margin calls for leveraged retail investors and since there were no buy orders for Arabtec even at limit-down levels, investors were forced to meet the calls by selling other shares.
Dubai’s index has now tumbled 26 percent from a multi-year peak hit in mid-May, erasing roughly $30bn of value.
The index is still up 19 percent year-to-date, and Arabtec shares are still up 52 percent. But the Arabtec saga has exposed major risks in the Dubai market, which along with Abu Dhabi and Qatar was upgraded to emerging market status by index compiler MSCI last month.
Other markets in the region saw little if any direct impact from Dubai, but it did affect general sentiment, in addition to concerns over the heavy fighting in Iraq and a seasonal exodus of retail investors ahead of Ramadan.
Egypt was the worst performer in the region after the UAE bourses, sliding 1.7 percent. Unlike the oil-rich Gulf nations, its trade balance and state budget could suffer from any sustained increase in oil prices due to the Iraqi conflict.
“I believe that the current weakness is attributed to multiple factors including the beginning of Ramadan and the spillover of the sell-off seen in Dubai,” said Harshjit Oza, assistant director of research at Naeem Brokerage in Cairo. “But I believe that the downside has been limited by factors such as MSCI keeping Egypt’s emerging market status alive.”
HIGHLIGHTS
DUBAI: The index tumbled 6.7 percent to 4,009 points.
ABU DHABI: The index slid 3.4 percent to 4,548 points.
SAUDI ARABIA: The index pulled back 0.3 percent to 9,522 points.
KUWAIT: The index fell 0.5 percent to 6,936 points.
EGYPT: The index slid 1.7 percent to 8,167 points.
BAHRAIN: The index edged down 0.03 percent to 1,427 points.
OMAN: The index slipped 0.2 percent to 6,921 points.
Reuters
