By: Mahmoud Gamal
Dubai – Mubasher: The Dubai Financial Market’s (DFM) general index lost 287.53 points, or 9%, to 2,821 points in the second quarter of 2018, pulled down by selling pressure followed the eruption of The Abraaj Group’s crisis.
The UAE markets underwent selling pressure from April to June, which was unexpected, given the latest stimulant decisions taken by the government, senior financial analyst at Mena Corp Issam Kassabieh commented.
The crisis of the ailing private equity firm Abraaj Group, once one of the developing world’s influential investors, has affected investors’ morale, which dragged down the DFM, Kassabieh added.
Arif Naqvi, the founder of The Abraaj Group, is facing criminal charges in the UAE for issuing a bounced cheque.
Earlier in June, Abraaj filed for liquidation, as a response to a group of liquidation petitions after the company was hit by money misuse allegations.
Cayman Islands court has approved a request submitted by Abraaj Group for a provisional liquidation of its business, allowing for a court-supervised restructuring and the protection of stakeholders’ rights.
Abraaj Group was accused of mishandling a $1 billion healthcare fund and audits discovered that the UAE-based company commingled investor funds with its own money in the healthcare fund.
In the second quarter, the real estate projects slowed down in the UAE, which urged foreign investors to transfer their investments to other regional markets, especially the Saudi, which was included in MSCI emerging market index, Kassabieh said.
The performance of companies listed on the UAE stock markets, particularly the DFM, did not reflect the national economy, the analyst remarked.
The consumer staples sector dropped 32.6% in Q2-18 after Marka and DXB Entertainments plunged 41% and 32.6%, respectively.
The real estate sector shed 15.48%, as Drake and Scull International (DSI) declined 56.47% to AED 1.73, while Emaar Properties, Arabtec Holding, and Union Properties went down 15.17%, 14.35%, and 9.44%, respectively.
The transportation sector lost 12.04%, as Gulf Navigation lost 12.62% and Air Arabia sank 14.12.
The investment sector fell 8.73% after DFM Company declined 7.21% and Dubai Investments sank 9.09% to AED 2.09.
The banks sector levelled down 1.03%, as Dubai Islamic Bank (DIB) and Emirates NBD shed 8.2% and 8.9%, consecutively.
Over the three-month period ended 28 June, the DFM’s trading volume reached 6.85 billion shares, while the market’s liquidity amounted to AED 10.7 billion.
On a monthly basis, the DFMGI lost 143.13 or 4.83% in June, recording its fifth monthly decline, after 1.1 billion shares were traded, with a turnover of AED 1.63 billion.
The DFM’s general index tumbled 549.07 points or 16.3% in the first six months of 2018, as 15.93 billion shares were traded with a turnover of AED 26.8 billion.
Translated by: Muhammad Khalid
