Shares on the Dubai stock exchange fell by the largest amount in two months Wednesday, leading declines across the Gulf, as markets were affected by expectations that growth in world oil demand will be weaker next year than previously thought.
The Dubai Financial Market dropped 4.1 per cent, while the Abu Dhabi Securities Exchange was down 1.2 per cent, as stocks in the banking and property sectors fell.
"The market had spiked in recent weeks and was overbought in some respects," said Chahir Hosni, the equities sales manager at EFG Hermes in Dubai. "The correction was triggered by weaker global markets and subdued oil prices."
The International Energy Agency said yesterday that global oil demand may recover by only about 1.3 million barrels a day (bpd) next year, after falling by 2.3 million bpd this year. Global oil demand peaked in 2007 at 86.5 million bpd.
Shares in Emaar Properties, the UAE's largest property developer by market capitalisation, fell by almost 7 per cent, while Union Properties also fell, by 5.9 per cent.
Aldar Properties, the largest developer in Abu Dhabi, saw its shares lose 3.4 per cent, and the share price of Sorouh Properties, its nearest rival, was down 3.2 per cent.
In the banking sector, Emirates NBD, the largest UAE lender by assets, and Dubai Islamic Bank both lost 3.4 per cent. Abu Dhabi Commercial Bank's shares dropped 4.1 per cent and Abu Dhabi Islamic Bank lost 2.7 per cent.
Aymen el Saheb, the director of operations at Darahem Financial Brokerage, said: "It's not only retail investors that have sold. The big boys have also opted to cash out of major stocks on both markets."
Elsewhere in the region, Kuwait's benchmark index fell 0.7 per cent while Qatari stocks lost 2 per cent.
The Muscat and Bahrain benchmark indexes dropped half a per cent each. Saudi Arabia's Tadawul exchange lost 0.4 per cent.
skhan@thenational.ae
Tips on buying property during a pandemic
Islay Robinson, group chief executive of mortgage broker Enness Global, offers his advice on buying property in today's market.
While many have been quick to call a market collapse, this simply isn’t what we’re seeing on the ground. Many pockets of the global property market, including London and the UAE, continue to be compelling locations to invest in real estate.
While an air of uncertainty remains, the outlook is far better than anyone could have predicted. However, it is still important to consider the wider threat posed by Covid-19 when buying bricks and mortar.
Anything with outside space, gardens and private entrances is a must and these property features will see your investment keep its value should the pandemic drag on. In contrast, flats and particularly high-rise developments are falling in popularity and investors should avoid them at all costs.
Attractive investment property can be hard to find amid strong demand and heightened buyer activity. When you do find one, be prepared to move hard and fast to secure it. If you have your finances in order, this shouldn’t be an issue.
Lenders continue to lend and rates remain at an all-time low, so utilise this. There is no point in tying up cash when you can keep this liquidity to maximise other opportunities.
Keep your head and, as always when investing, take the long-term view. External factors such as coronavirus or Brexit will present challenges in the short-term, but the long-term outlook remains strong.
Finally, keep an eye on your currency. Whenever currency fluctuations favour foreign buyers, you can bet that demand will increase, as they act to secure what is essentially a discounted property.
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Wicked
Director: Jon M Chu
Stars: Cynthia Erivo, Ariana Grande, Jonathan Bailey
