Dubais Shares Retreat Led by Air Arabia as Italys Yields Rise, Oil Drops - Bloomberg

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Dubais Shares Retreat Led by Air Arabia as Italys Yields Rise, Oil Drops
By Zahra Hankir - Nov 14, 2011

Dubais shares led declines in the Persian Gulf as oil declined and amid concern new leaders in Europe will struggle to contain the soverign debt crisis after Italy paid the highest yield since 1997 at a sale of five-year bonds. Air Arabia, the Middle Easts biggest no-frills airline, declined 1.4 percent after it had its price estimate cut 4.6 percent at Morgan Stanley. Emirates Integrated Telecommunications Co. (DU), the United Arab Emirates phone company known as Du, slipped to the lowest in almost two weeks. Dubais DFM General Index (DFMGI)retreated 0.4 percent to 1,387.81 at the 2 p.m. close in the emirate after rising 0.7 percent yesterday. The Bloomberg GCC 200 Index (BGCC200)of Gulf shares dropped 0.1 percent. External markets have been unable to maintain momentum, and buyers here applied the brakes, said Julian Bruce, equity sales head at EFG-Hermes Holding SAE in Dubai. In Europe, the benchmark Stoxx Europe 600 Index dropped 1 percent and the Standard & Poors 500 Index futures declined 0.6 percent, erasing earlier gains. Italy sold 3 billion euros ($4 billion) of fiveyear bonds today at the highest yield in more than 14 years. Stocks initially climbed after Mario Monti, a former European Union competition commissioner, was appointed Italys new prime minister, as the country tackles the euro regions second-biggest debt. In Greece, the nations finance minister, Evangelos Venizelos, said his priority is to ensure the country gets a sixth loan under an European Union-led bailout after Prime Minister Lucas Papademos took charge of a new interim government. Yields on Italian five-year notes climbed to 6.57 percent.

Slower Growth
About 32 million dirhams ($8.7 million) exchanged hands in Dubai trading today, compared with this years daily average of 135 million dirhams, according to Bloomberg data.

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Dubais Shares Retreat Led by Air Arabia as Italys Yields Rise, Oil Drops - Bloomberg

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The U.A.E. and Saudi Arabia, the biggest Arab economy, are likely to post slower economic growth next year as oil prices drop and this years government expenditure wont recur, Kai Stukenbrock, director of sovereign and international public finance ratings at Standard Poors, told reporters in Dubai today. Saudi Arabias economic growth will drop to about 3.8 percent in 2012 from 6 percent this year, he said. Growth in the U.A.E., the second-biggest Arab economy, will slow to close to 3 percent from 4.5 percent, he said. Crude for December delivery fell as much as 1.3 percent to $97.71 a barrel on the New York Mercantile Exchange. Gulf Arab oil exporters supply about a fifth of the worlds oil. Air Arabia (AIRARABI) slipped 1.4 percent, the most since Nov. 9, to 62.1 fils. The company had its price estimate lowered to 62 fils from 65 fils at Morgan Stanley. Du dropped 0.7 percent to 2.9 dirhams, the lowest since Nov. 2. Abu Dhabis ADX General Index (ADSMI) slipped 0.2 percent. Bahrains benchmark declined 0.4 percent and Omans MSM30 Index (MSM30) fell 0.1 percent. Saudi Arabias Tadawul All Share Index (SASEIDX) dropped 0.3 percent. Kuwaits SE Unweighted Index was little changed, while Qatars QE Index (DSM) rose 0.3 percent. To contact the reporter on this story: Zahra Hankir in Dubai at zhankir@bloomberg.net To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net
2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.

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