[2008-05-12]  UAE shares drop as prices outpace earnings Discuss prospects
UAE shares retreated yesterday in what an analyst described as a “natural correction.” Investors believed prices have outpaced prospects for earnings growth, prompting the Dubai bourse to drop 1.5 per cent to close at 5,741.55 and Abu Dhabi’s main index to slide 0.6 per cent at 5,006.24 points.

Al Firdous Holding and Islamic Arab Insurance were the biggest losers on the Dubai Financial Market (DFM) General Index with a fall of 3.8 per cent to Dh2.25 and 3.1 per cent to Dh3.43, respectively.

Tamweel, the biggest provider of home mortgages in the UAE by market value, slumped three per cent to Dh7.76 after it received regulatory approval to end the lock-up period for its founding members, who are now allowed to sell shares of the company.

Aramex, the biggest courier service company in the Middle East, declined 3.1 per cent to Dh2.53 and Dubai Investments, a consortium of at least 44 companies, slipped 2.8 per cent to Dh3.88.

“Dubai has been rising recently, and this slump is nothing more than a breather, a natural correction,” said Shahid Hameed, head of asset management at Kuwait-based Global Investment House, in a Bloomberg report.

DFM posted shares value of Dh1.14 billion compared to the 50-day average of Dh1.23 billion, based on Bloomberg’s data.

Shares value at the stock benchmark index Abu Dhabi Securities Exchange (ADX), formerly Abu Dhabi Securities Market Index, was Dh595.2 million compared with the 50-day average of Dh913.1 million.

Oman & Emirates Investment Holding Co trailed all other ADX-listed companies with a fall of 10 per cent to Dh4.80, followed by Ras Al Khaimah Poultry and Feeding Co, which lost 7.7 per cent to Dh5.20.

Abu Dhabi National Energy Co (Taqa), an investor in energy projects, retreated 2.2 per cent to Dh3.48 and Emirates Telecommunications Corp, also known as Etisalat, declined 1.2 per cent to Dh21.40.

Source: Copyright © 2001 - 2008, K. Zughaibi & B. Kabbani General Partnership.