Tensions high before MSCI review

Arabtec was added to MSCI's index yesterday. Jeffrey E Biteng / The National

UAE stock markets fell yesterday as anxious investors sold shares ahead of MSCI's classification review of the country scheduled to take place in the coming weeks.

Arabtec Holding, Dubai's biggest contracting company, was added to the international index compiler's frontier markets index yesterday.

Oman Cement and Oman International Bank were also incorporated into the index, MSCI said yesterday.

The UAE is under review for a potential upgrade to emerging markets status. The country is currently considered a frontier market.

But there are growing worries among traders that the markets will miss the cut next month as the level of satisfaction remains muted over the delivery versus payment system, introduced last year and a requirement made by MSCI. Under the system, securities are delivered and payment received on the same day.

"International investors are concerned about the forced selling that is included in its trade settlement process, the regulator did not tackle this, so it will remain an obstacle for the upgrade," said Tariq Qaqish, the deputy head of asset management at Al Mal Capital in Dubai.

The Dubai Financial Market General Index fell 1.3 per cent to 1,466.08 yesterday. Arabtec Holding lost 1 per cent to Dh2.89 apiece. The shares have risen more than 100 per cent this year. The Abu Dhabi Securities Exchange General Index lost 0.2 per cent to 2,467.21.

Elsewhere in the region: Kuwait's measure was little changed at 6,437.72; Bahrain's index was also little changed at 1,156.31; Oman's MSM 30 Index added 1 per cent to 5,643.61 points; Qatar's QE Index slipped 0.2 per cent to 8,467.76. The Saudi Tadawul All-Share Index fell 0.06 per cent to 7,099.90.

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