ADX sheds 5.06% in largest one-day loss for 10 weeks

The Abu Dhabi Securities Exchange endured its largest one-day loss for 10 weeks following mega losses in its 10 largest stocks. The ADX fell 5.06 per cent to 2,163 points and there seems little chance of a rebound today.

Etisalat was the biggest casualty yesterday and its collapse suggests investors have lost all confidence in the market.

As the largest listed company in the UAE and with predictable revenues, the telecoms giant should be largely aloof to the woes of the troubled real estate and financial services sector, but it has tumbled along with everything else.

Etisalat fell 6.3 per cent to Dh9.89, the first time it has been below Dh10 this year and it has now lost 55 per cent of its value in a little over nine months.

Abu Dhabi's real estate stocks plunged yet again. While the capital's property sector is several years behind Dubai's and so not facing the same problems of oversupply, it has nonetheless been hit by the near-collapse of the UAE mortgage market and investors are dumping realty stocks with abandon.

Meanwhile, Aldar Properties and Sorouh Real Estate were two of the nine ADX stocks to drop more than nine per cent.

Banks in the UAE capital fared slightly better, with Abu Dhabi Commercial Bank and National Bank of Dhabi both falling by eight per cent or more, while First Gulf Bank retreated 7.44 per cent.

Losers eclipsed gainers 27:5, with Methaq the only notable winner after the Islamic insurer 0.54 per cent.

Turnover increased by a fifth from the day before to Dh105 million. FGB was on top with Dh29m, followed by Aldar's Dh23m and Sorouh with Dh10m. Etisalat's Dh7.5m placed it fourth.


DP world falls 3.85%

DP World slumped to yet another all time low on the Nasdaq Dubai.

The Dubai-headquartered ports operator delivered another abject performance to fall 3.85 per cent to $0.25 after just over four million shares were traded.

Depa fell on pitiful volumes, dropping 10 per cent to $0.45 as 10,000 shares changed hands.


Government support

UAE Government bodies must step in and decisively support the domestic stock markets and wider economy, according to Mohammed Ali Yasin, Shuaa Securities Chief Executive.

"The government should act now to improve sentiment and provide liquidity for the economy," said Yasin, adding: "Whether this is through government or quasi government funds, they are the only ones that can turn the situation around. Some sectors are in big trouble."

Analysts disagree over whether there should be state intervention in the stock markets, with the naysayers claiming this only creates artificial supports that will inevitably be broken as market forces apply.

"Banks should be forced to lend to the private sector, while the cost of borrowing should also be reduced," said Yasin.

Follow Emirates 24|7 on Google News.