October 26, 2015
Flat earning, budget cut drags UAE bourses lower
UAE markets continued their downwards trajectory following a trimmed Federal budget and flat third-quarter earnings.
The Abu Dhabi Securities Exchange General Index experienced its largest one-day fall in seven weeks, losing 1.3 per cent at 4,413.96. Dubai’s headline index fell 1.2 per cent at 3,553.03, its lowest close in nearly seven weeks. “Markets are still experiencing negative momentum from earnings around the region,” said Muhammad Shabbir, the head of equity funds and portfolios at Rasmala Investment Bank in Dubai. “Some of the banks have put out some pretty negative results, indicating broader changes with regard to liquidity and the lending market affecting the banking sector as a whole,” he said. Union National Bank earlier this week announced a 12.4 per cent fall in its third-quarter profits. Emirates NBD, NBAD, FGB and DIB are all expected to release earnings later this week. The UAE’s Cabinet on Sunday approved a trimmed Federal budget – representing about 13 per cent of all government expenditure – of Dh48.5 billion for next year, down 1.1 per cent from this year. “The budget numbers are now out and may clear the air a bit, but it’s difficult to adopt a positive outlook in the current scenario,” Mr Shabbir said.
Dubai Investments and Union Properties were among the hardest hit big names in Dubai, ending the day down 2.9 and 2.7 per cent, respectively.
In Abu Dhabi, Aldar Properties had its worst day in nearly eight weeks, closing down 4.6 per cent at Dh2.25, while Dana Gas closed down 4 per cent at 48 fils apiece.