UAE markets plunge further on oil worries

Dubai's stock index fell sharply in early trade on Sunday after the price of oil hit a new low on Sunday; other Gulf markets were also bearish.

The Dubai benchmark tumbled 5 per cent to 3,415 points, an 11-month low, as nearly all traded stocks fell. Developer Emaar Properties was down 6.2 per cent and builder Arabtec Holding lost 7.5 per cent.

The main index in neighbouring Abu Dhabi dropped 2.5 per cent. Kuwait slid 1.0 per cent and Oman edged down 0.3 per cent.

Brent crude dropped nearly 3 per cent and settled at below $62 a barrel on Friday after the International Energy Agency cut its outlook for demand growth in 2015.

A plunge in the Gulf equity markets triggered by oil's decline has wiped out roughly $150 billion of value since the end of October and selling may continue as few people are willing to call a bottom for the markets just yet.

Investors' main concern is that governments in the region may start to cut spending in line with falling oil export revenues. Many analysts believe that most governments will comfortably be able to maintain spending, but Oman and Bahrain will be under pressure because of their lower fiscal reserves and higher fiscal break-even prices. 


 

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