Emirates Leaks

Losses dominate UAE stock markets

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Standard losses continue to strike UAE stock markets amid financial pressures and a massive housing and financial crises.

The Dubai index fell 0.3% with the opening of trading this week under the pressure of real estate losses.

Arabtec Holding fell 5.3%. Emaar Properties, the emirate’s largest real estate developer, fell 3.6%, while Deyaar Real Estate fell 1.6%.

The general index of the Abu Dhabi market also fell 0.1%, while the Qatar Stock Exchange index fell 0.3%. Most of the losses were in the shares of banks and companies operating in the oil and gas sector.

Meanwhile, a specialized report by Kuwait’s KAMCO (Istithmar Bank) showed a decline in the total profit of listed companies on the UAE stock exchanges at record levels.

Total net profit of listed companies decreased by 2.6%. Around $2.6 billion was lost during the period, compared with $2.7 billion in the comparable period of 2018.

Dubai Financial Market posted a modest rise of 1.4% in the first quarter to $2.7 billion, compared to $2.6 billion in the comparable period last year.

Recently, Dubai has been in a spiral of financial loans as its economic crisis escalated due to the collapse of its real estate market and its impact on the aggressive foreign policies of the ruling regime in the UAE.

The Dubai Financial and Real Estate crisis have prompted Abu Dhabi to extend a 20-billion-dollar debt it offered to Dubai during its financial crisis about 10 years ago and is due next month, according to Reuters.
In March 2014, the Abu Dhabi government agreed with the UAE Central Bank to refinance the five-year loan at an annual interest rate of 1%. The first extension reduced the financing cost to 1%, down from its original cost of 4%.

The extension included a $10 billion five-year loan from the Abu Dhabi government to Dubai through two state-owned banks and the five-year US $10 billion five-year bonds issued by Dubai to the central bank.

“This time is similar to the previous time, and the debt will likely extend again,” one familiar source said, without elaborating. The other two sources familiar with the matter said the debt would be extended and the two asked not to be named because the decision was not yet announced.

The pressure Dubai faces is not as serious as it faced 10 years ago. But being the region’s largest financial, trade and tourism hub, Dubai has been hit by the economic slowdown in the Gulf states as a result of falling oil prices.ا

A senior banker said, “Abu Dhabi will not risk any tension by asking Dubai to pay. The time is now more sensitive than 2009, “he said, adding that the debt would be extended to help Dubai develop its economy.

Dubai’s economy has been hit by the UAE’s decision to impose a trade boycott on Qatar and cut off transport links with it since mid-2017, along with Saudi Arabia and other Arab countries. The UAE is also committed to renewed US sanctions against Iran, which historically has been a hub for shipping goods to and from Dubai.