Nervous start for property stocks on UAE bourses

Worries over the UAE's property sector led markets downwards this morning, with Union Properties declined almost 7 per cent at the open after reporting a loss in the fourth quarter.

The Dubai developer reported a Dh1.5 billion loss for 2010 yesterday, citing a drop in valuation of its properties. Shares of Union Properties declined as much as 6.9 per cent to 36 fils at 10:05am.

Analysts said asset sales are probably still required to finance the existing development pipeline. Last November the company announced the sale of the Ritz-Carlton to a private company in Abu Dhabi for Dh1.1bn. Ten months earlier it had announced an asking price of Dh1.5bn.

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"It is hard for us to see Union Properties prospects improving over the short term unless significant asset sales can be consummated in 2011", said Chet Riley, an analyst at Nomura in Dubai.

Other property and construction stocks also declined on the Dubai Financial Market exchange. Emaar Properties, the largest developer in its emirate, declined 0.93 per cent to Dh3.20 a share. Drake and Scull International, the second largest contractor in Dubai, lost 1.7 per cent to Dh1.13. Dubai's measure declined 0.7 per cent to 1604.91.

Aldar Properties, the biggest developer in Abu Dhabi, declined 1.77 per cent to Dh1.11. The Abu Dhabi Securities Exchange General Index declined 0.7 per cent to 2696.87.

Elsewhere in the region, Kuwait's measure declined 1.31 per cent to 6564.10. Bahrain's measure gained 0.1 per cent to 1471.15. Oman's index rose 0.1 per cent at 6999.67. Qatar's bourse gained 0.5 per cent to 8981.10.