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Abu Dhabi: Dubai shares fell 3.3 per cent led by Emaar Properties on Sunday after the Middle East's biggest publicly traded property developer cancelled the $1.64 billion initial public offering of its Indian unit Emaar MGF.
The Dubai-based company plunged 6.6 per cent to Dh11.35 on the Dubai Financial Market, its lowest close since October 8.
Emaar is the benchmark's biggest stock with a 17.2 per cent weighting. Emaar MGF, which planned to sell 102.6 million shares in India's second-biggest IPO by a real-estate company, scrapped the offering, citing poor investor demand.
The company, a joint venture of Emaar and MGF Development Ltd of India, will consider selling shares when the markets are more stable.
"Everyone expected the IPO to go through even though it would be a tough one, so it is disappointing," Stefan Schurmann, an analyst at brokerage EFG-Hermes Holding SAE, said.
"They have leverage available on a parent company level, so short-term funding is not an issue. But it isn't nice for sentiment." He has a "long-term buy" rating on the stock.
"There are major worries about the spillover effects of a slowdown in the US on the Gulf and emerging markets," Rami Sidani, vice-president at Shuaa Capital PSC, said.
Apart from Emaar, all leading shares in Dubai and Abu Dhabi markets also took a beating and wiped Dh19.7 billion in market capitalisation.
Dubai's benchmark index closed 3.1 per cent down at 5,598.69 while Abu Dhabi Securities Market's (ADSM) general index fell by 1.75 per cent to 4,694.19.
"If it was only Emaar, that would have been justifiable, but for all stocks across the board to decline due to unrealistic and sentimental correlation with other markets does not make any sense," commented Mohammad Ali Yasin, managing director of Shuaa Securities.
Among the losers, Dubai Financial Market's (DFM) shares fell by 3.46 per cent to Dh5.58; Amlak Finance 4.73 per cent to Dh4.63; Deyaar Development 3.11 per cent to Dh2.49; Dubai Islamic Bank 3.07 per cent to Dh11.05; Air Arabia declining 2.9 per cent to Dh2.01 and Union Properties by 4.8 per cent to Dh4.57 respectively.
In Abu Dhabi, the real estate, telecommunication, and energy sectors recorded heavy losses.
Sorouh Real Estate and Aldar Properties retreated 1.3 and 3.14 per cent to Dh9.08 and Dh10.80 respectively. etisalat fell by more than two per cent to close at Dh24.35 while National Bank of Abu Dhabi fell 1.84 per cent to Dh23.95 and Dana Gas by 2.55 per cent to Dh2.29.
- With inputs from Bloomberg
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