The benchmark stock index of Dubai, the DFM General Index experienced its biggest slump in the last 11 months as the quarterly profit of EMAAR missed the initial estimates. Incidentally, EMAAR is the developer of the tallest skyscraper in the world and its stock prices tumbled by 3.7%. The DFM General Index saw a retreat of 2.1%, its biggest decline since 7th March, 2012. It is currently at 1848.28. The price to earnings ratio is set at 10.5 times now for the benchmark gauge.
Incidentally, in January, 2013, the Dubai stocks saw a total surge of 16% as the investors thought that EMAAR’s profit figures will improve amidst a situation where it seems that the real estate industry is recovering. The quarterly net income of EMAAR dropped to 512 million Dirhams, much lower than the initially estimated 538 million Dirhams by the economists.
The head of Institutional Trading Department of EFG Hermes Holding SAE, Julian Bruce stated that the recent gains in Dubai stock exchange was mainly attributed by possibility of a stellar fourth quarter performance of EMAAR. However, that didn’t happen and hence some sort of profit taking is pretty evident. However, Julian added that this decline is kind of a consolidation and rather not any reverse movement of the recently experienced positive sentiment in any way.
EMAAR shares experienced its biggest drop since 3rd June, 2012 and the decline was of 4.69 Dirhams. EMAAR shares jumped up by 46% in last year as the real estate industry recovered quite well. In the first half of 2012, the economy of Dubai experienced an increase of 4.1% and the expected growth of 2nd half of 2012 is 5%. If this happens, that will mark the fastest expansion pace since 2007. The largest publicly traded Gulf cooperation Council stock market, Dubai Financial Market PJSC experienced the biggest decline that of 3.9% since last May as well.
The 14-day relative strength index of Dubai went down to 71 on today from its previous value that of 86. Incidentally, any reading above 70 denotes that the index is poised to decline.
Among other Gulf nations, Tadawul All Share Index of Saudi Arabia retreated by 0.4%. The MSM30 Index of Oman dropped by 0.3% as well. However, the benchmark gauge of Bahrain and Kuwait both experienced surges of 0.1% and 0.5% respectively.