Dubai Stocks Lead Mideast Slump as Qatar Extends Retreat on FIFA

Dubai stocks led declines across most Middle East equity markets as investors took advantage of a four-day rally to sell positions before the start of the Muslim holy month of Ramadan. Qatari shares fell for a third day.

The DFM General Index dropped 1.5 percent to 3,971.86 at 11:31 a.m. in the emirate. Dubai developers and construction companies led the slide, as Emaar Properties PJSC lost the most since May 27. The DFM Real Estate Index sank 2.1 percent, its biggest decline in a week. Qatar’s QE Index retreated 1.2 percent.

“We are seeing some profit taking in Dubai this morning,” Ramez Merhi, a Dubai-based director for asset management at Al Masah Capital Ltd., which manages $500 million, said by e-mail. “With Ramadan on our doorstep and summer upon us we expect volumes to dry up while people partake in the holiday season.”

Ramadan, when Muslims fast from dawn to dusk and most employees in the six-nation Gulf Cooperation Council work reduced hours, starts next week. Trading volumes across the region typically decline, increasing volatility.

Shares of Amlak Finance PJSC, an Islamic mortgage provider that isn’t in Dubai’s benchmark index, rose 4 percent to 1.39 dirhams in a third day of gains. The stock, which resumed trading last week after a six-and-a-half year suspension, has increased 36 percent in the period.

Industries Qatar QSC led declines in Doha as the QE Index dropped to 11,946.24. The benchmark gauge is poised to close below the 12,000 level for the second time since April as U.S. and Swiss authorities continue to probe soccer’s governing body in investigations that include the awarding of the 2018 and 2022 World Cup’s to Russia and Qatar, respectively.

Qatar is spending about $200 billion on infrastructure in the run-up to hosting the world’s most-watched sporting event.

“There is still uncertainty with how the story will play out,” Merhi said. Investors will “handicap Qatari stocks until the investigation is over,” he said.

Source: Bloomberg