Sorouh share decline leads Abu Dhabi market retreat

Investors sold shares of UAE companies yesterday after Sorouh Real Estate, Abu Dhabi's second biggest developer, reported a 42 per cent in profits for the first quarters.

The Dubai Financial Market General Index was down 1.9 per cent to 1,634.13.

Sorouh Real Estate led Abu Dhabi shares lower yesterday while the Dubai stock market also finished the week down.

Sorouh, Abu Dhabi's second-biggest developer, reported a 42 per cent drop in earnings for the first quarter compared with the same period last year.

The company had net profit of Dh76.3 million compared with Dh132m in the first quarter last year, according to a filing to the Abu Dhabi bourse. Shares declined 4 per cent to Dh1.42 yesterday.

"Sorouh's results were certainly below market expectations, and so the weakness in the stock … is no surprise," said Matthew Wakeman, a managing director at EFG-Hermes in Dubai.

The Abu Dhabi Securities Exchange General Index declined 0.3 per cent to 2,695.50 points.

A delay in adopting a new settlement system also dampened sentiment. The system, called delivery versus payment, is a key requirement for the country to be upgraded to "emerging market" status by index benchmark MSCI. The UAE is currently classified as a frontier market.

The deadline for enforcing the delivery-versus-payment system was postponed to May 29, after originally being scheduled to begin yesterday.

"This doesn't close the door to the MSCI Emerging Markets Index entry, but it increases the uncertainty in investors' minds," Mr Wakeman said.

The Dubai Financial Market General Index was down 1.9 per cent at 1,634.13. The Saudi Tadawul All-Share Index was up 0.5 per cent at 6,724.26.