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Dubai: The British and US terror warnings for the UAE seems to have weighed on the minds of Dubai's investors, pulling the market index to a two-month low.
Volumes traded continued to be low - 261.15 million shares on the day - as the Dubai Financial Market General Index fell 1.78 per cent to 5,560.22, the lowest since April 16.
"I think the negative news that came out from the American and British embassies of a possible terrorist threat - that's the only explanation for the decline," said Tariq Qaqish, fund manager, asset management, Al Mal Capital. "I don't see any heavy profit-taking just after one day."
Mohammad Ali Yasin, managing director of Shuaa Securities, agreed. 'That was the reason," referring to the terror warning, and "also with low volumes for some time, the market had to move up or down and therefore we saw a speedy sell-off".
Although Emaar Properties had the highest turn-over value worth Dh203.37 million, it fell 0.89 per cent to Dh11.10. DFM tumbled 3.42 per cent to end the day at Dh5.36.
The banking sector fell 2.67 per cent, led by Dubai Islamic Bank led the decline, losing 4.56 per cent to close at Dh8.37. Emirates NBD dropped 2.89 per cent to Dh11.75.
Going into the week, Qaqish believes that it will be awhile before the sentiment of investors is reversed.
'I think it will take more time - more than just a week. I think, because it [DFM] was moving sideways and it was not strong in the past few months, I would expect the news to have an impact over the short term. But with time, as investors see that there are no real threats and only a cautious movement, I think investors will go back and have more confidence in the market. "
The Abu Dhabi Securities Exchange also fell, although not as much as its Dubai counterpart. The index dropped 0.53 per cent to 5,117.76. The difference in the performance of the two markets has been marked since the beginning of the year and that also weighs on the investor sentiments.
Telecom, real estate, banking and energy sectors declined. etisalat fell 1.23 per cent to Dh20.10. First Gulf Bank fell 1.48 per cent, but National Bank of Abu Dhabi was unchanged at Dh21.50. Abu Dhabi Commercial Bank however gained 2.36 to close at Dh5.21.
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