Dubai's bourse fell sharply on Wednesday as investors accumulated cash for the upcoming initial public offer of Emaar Properties' malls unit, while most other markets in the region slipped.

The Dubai index fell 3.4 percent after dropping as much as 4.4 percent at one stage. Emaar itself lost 2.7 percent. In one of the largest equity sales in the Middle East since 2008, the company plans to float its unit Emaar Malls Group this month and subscriptions for the shares will open on Sept. 14.

"People are trying to take profits in order to take part in the IPO," said Marwan Shurrab, fund manager and head of trading at Vision Investments in Dubai. "Any selling pressure you see on the market is going to be related to that."

Emaar, which plans to sell a 15 percent stake in its subsidiary, has indicated it wants to raise at least Dh5.3 billion ($1.4 billion) from the offer. It has also said it aims to sell about 30 percent of the offer to retail investors.

Another negative factor for equity markets globally on Wednesday was indications that the U.S. Federal Reserve could raise interest rates earlier than expected.

Interest rates in the United Arab Emirates are expected to track U.S. rates closely because of the dirham's peg to the dollar. The UAE and other Gulf economies are likely to withstand higher rates better than most emerging economies because of their big current account and state budget surpluses.

Abu Dhabi's index dipped along with Dubai and fell 1.0 percent. Developer Aldar Properties was hit hardest among blue chips, dropping 4.4 percent.

SAUDI, QATAR

Saudi Arabia's property firms were also weak. Developers Dar Al Arkan and Jabal Omar, down 2.3 and 1.0 percent respectively, were among the main drags on the bourse's main index, which slipped 0.2 percent.

Qatar's benchmark slipped 0.1 percent after hitting an all-time intra-day high of 14,103 points. Gulf International Services (GIS) pulled back 1.0 percent after jumping 4.7 percent in the previous session when it signed a $1.4 billion contract with Qatar Petroleum.

Egypt's bourse edged down 0.1 percent as large property developer SODIC dropped 5.1 percent, after saying it had received regulatory approval for a 1 billion Egyptian pound ($140 million) rights issue.

Cairo-based Naeem Brokerage downgraded the stock to "hold" from "buy" afterwards, saying that while the capital boost was a positive factor, it had already been priced in. Shares in SODIC have more than doubled in price this year.

 

WEDNESDAY'S HIGHLIGHTS

DUBAI: The index dropped 3.4 percent to 4,912 points.

ABU DHABI: The index slid 1.0 percent to 5,116 points.

QATAR: The index slipped 0.1 percent to 14,027 points.

EGYPT: The index edged down 0.1 percent to 9,587 points.

SAUDI ARABIA: The index fell 0.2 percent to 11,126 points.

KUWAIT: The index added 0.1 percent to 7,480 points.

OMAN: The index rose 0.4 percent to 7,548 points.

BAHRAIN: The index slipped 0.2 percent to 1,461 points.