[2008-09-19]  UAE stocks slump again on Morgan Stanley crisis
UAE shares slumped on Thursday to erase the gains of Wednesday as investors' nerves continued to be frayed by the plunge in most markets across the world amid the deepening of global financial crisis.

It's been reported that Morgan Stanley, one of the last two Wall Street investment banks, is in emergency merger talks to save it from going under.

At close, the Dubai Financial Market General Index was down 3.02 per cent to 3,922.64. The turnover tumbled 29 per cent to Dh923.38 million. Of the 29 stocks traded, 28 declined and just one gained.

Abu Dhabi Securities Exchange Index declined 2.64 per cent to 3,730.31. The value of traded shares fell 31 per cent to Dh446.46 million. Of the 38 stocks traded, 34 declined and four were up.

About Dh18 billion was wiped away from the markets on Thursday.

"Investors are reacting to what is happening in the US - the market there closed 4.06 per cent down yesterday and today, all Asian markets opened down," said Sharif Abdul Khalek, manager, institutional accounts, Beltone Financial Securities.

"The mood is negative and that will continue to affect our markets here. Anything might happen after Merrill Lynch and Lehman Brothers. But with prices very, very cheap, we will see high volatility too in the markets here."

Tariq Qaqish, fund manager, asset management, Al Mal Capital, agreed, saying that there are more ways than one that the US and the region are connected and, with negative sentiments prevailing around the world, investors are not confident of the markets, regional or international.

"We are going to be affected for some time as our economies are correlated these days," said. " Not only the stock markets, the whole economic cycle -from credit squeeze to oil prices to interest rates - all of these factors will be affecting regional stock markets... cautious is the game now in this situation."

But concerns over the turmoil are pushing investors away from equities to commodities, and that has in the past two days led to a jump in both oil and gold prices.

Oil prices crossed $100 mark to hit a high of $102 and gold surged Wednesday more than $90.40 to close at $870.90 an ounce.

In the region's other bourses, Doha posted a loss of 3.66 per cent, Muscat 0.5 per cent and Bahrain was down 0.36 per cent.

Banks and real estate stocks dragged both the local bourses down. Yesterday, the UAE Central Bank asked the banks to report any exposure to the failed brokerage firm.

On DFM, among the major losers included Emaar Properties, the most liquid stock, shedding 3.71 per cent to Dh7. Union Properties slid 3.23 per cent to Dh3, Dubai Islamic Bank fell 7.63 per cent to Dh 5.45.

Mortgage giants Tamweel and Amlak Finance closed 6.85 per cent down to Dh3.81 and 4.93 per cent to Dh3.28 respectively.

On ADX, the losers in the banking sector list included First Gulf Bank and Abu Dhabi Commercial Bank ended down 8.78 per cent to Dh14.55 and 3.86 per cent to Dh14.95, respectively.

Aldar Properties, the most liquid stock of the day, lost 3.54 per cent to end at Dh7.09. Sorouh Real Estate closed 1.76 per cent lower to Dh5.57. etisalat posted a loss of 1.25 per cent to close at Dh15.


Source: © Al Nisr Publishing LLC 2007.