Dubai stocks fell 4.4% Monday, ending their worst week since 2008, as the country’s real estate sector comes under fire.
Emaar Properties, a developer and the DFM General Index’s largest-weighted-stock, fell 3.7% per cent. Arabtec, the United Arab Emirates’ largest listed contractor, fell 10% per cent, the most allowed in a day.
The DFM General Index lost 22% in June, and entered a bear market last week after the shares plunged 20% per cent from their peak in May.
We recently told you how the UAE was until recently the world’s hottest property market, with prices up 10% quarter-over-quarter. It appears the reckoning has arrived.
“Property and construction stocks are at the forefront of the market, and in a down draft they take a hit,” Hisham Khairy, the Dubai-based head of institutional trade at Mena Corp. Financial Services LLC, told Bloomberg. “It looks like the correction is not fully done and we are heading lower again.”
Still, a full-on destabilizing crash remains unlikely. “There are some noticeable structural differences between where Dubai is today and where it was six years ago,” Ali Khalpey, head of equities at Exotix Partners LLP in London, told Bloomberg. Here’s what the DFM has looked like over the past 12 months: