Poor earnings and Paris killings hit UAE bourses

The Dubai Financial Market General Index fell 4.12 per cent to 3,146.21, its lowest close since mid-December. Abu Dhabi’s headline index fell 2.47 per cent to 4,096.58.

UAE stock markets closed at new lows for the year as poor earnings, falling oil prices and the fallout from Friday’s atrocities in Paris led to a sell-off.

Stock markets in Dubai and Abu Dhabi, among the first global bourses to open following the shootings and bombings in Paris that left 129 people dead, closed at new lows for the year, as already nervous investors rushed to close their ­positions.

The Dubai Financial Market General Index fell 4.1 per cent to 3,146.21, its lowest close since mid-December. Abu Dhabi’s headline index fell 2.4 per cent to 4,096.58.

Dubai shares have lost more than a quarter of their value since peaking in July, with Abu Dhabi stocks falling more than 16 per cent over the same ­period.

Saudi stocks fell 2.8 per cent.

Analysts downplayed the impact of the Paris attacks on regional stocks, pointing the finger at more localised factors pertaining to falling oil prices. “We’ve seen terrorist attacks overseas in the past have little impact on markets here,” said Sebastien Henin, head of asset management at the Abu Dhabi-based investment firm The National Investor.

“The sell-offs today were driven by weak oil prices following the downwards trend of last week. Plus investors are getting nervous ahead of next month’s Saudi budget announcement, with the sense that spending cuts can’t be postponed any more.”

Brent crude futures fell below $44 per barrel on Friday before gaining ground at the close, after the International Energy Agency reported record global oil inventories, with slowing demand likely to result in a supply glut well into next year.

“It’s difficult to extrapolate [the impact of the Paris attacks] on the market when the general outlook is pretty negative already,” said Julian Bruce, the head of institutional trading at EFG-Hermes in Dubai. Mr Bruce also noted that the inclusion this month of Etisalat in the MSCI Emerging Markets Index will involve UAE stocks already included in the index having their weightings trimmed, leading to outflows of passive money.

Poor results from Drake & Scull International and Dana Gas added to yesterday’s woes. Dana Gas was the worst performer on Abu Dhabi’s stock exchange, after it posted a net loss of Dh28 million for the quarter. It ended the day down 9.3 per cent at 39 fils apiece.

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