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Tuesday, March 17, 2009

UAE Stocks Slip; Drake & Scull Tumbles 26 Per Cent on Debut

DUBAI - Property and construction stocks dragged UAE shares down on Monday. Engineering and construction contractor Drake & Scull plunged 26 per cent below its offer price on its trading debut. The Dubai Financial Market benchmark index ended 1.04 per cent lower at 1,509.7. The Abu Dhabi Securities Exchange main index inched down 0.74 per cent to 2,311.11.

“The rest of the Dubai market drifted lower in the absence of retail focus, but the index managed to close above the 1500 level which is becoming a key psychological point,” said Matthew Wakeman, managing director at EFG Hermes.

Arabtec Holding, the country’s biggest construction company building the world’s tallest skyscraper in Dubai, retreated 2.38 per cent to Dh1.64.

Index heavyweight Emaar Properties, the largest property company in the Middle East, shed 1.46 per cent to Dh2.02. Deyaar Development edged down 2.12 per cent to Dh0.46, while Union Properties lost 1.47 per cent to Dh0.67.

Drake & Scull which sold shares last year, ended down 26 per cent to Dh0.74, below its offer price of Dh1.0 on its first trading day. “The poor showing of Drake & Scull merely reflected the sentiment of the market; clearly risk appetite is zero,” said Samer Al Jaouni, general manager at Middle East Financial Brokerage, adding that “the uncertainty out there will make it difficult for companies to go public in the next three quarters.”

Takaful House, a leading provider of Takaful insurance based in the UAE, was the last company listed on DFM in August 2008.

Mashreqbank PSC slipped 5 per cent to Dh174.60. The bank said it plans to convert federal government deposits into Tier-2 capital. Tier-2 capital is a banks’ secondary capital and includes items such as undisclosed reserves, general loss reserves and subordinated debt. It protects depositors after the value of Tier-1 capital, that includes items such as common stock, retained earnings and perpetual preferred stock — has eroded. In Abu Dhabi, construction-related stocks led declines with Arkan Building Materials Co. losing 6.88 per cent to Dh3.40. Ras Al Khaimah Cement Co. shed 4.72 per cent to Dh1.20 while Union Cement Co. gave up 5.21 per cent to Dh.2.11.

--Khaleej Times

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