Real estate and construction companies continued to weigh on the Dubai market on Wednesday as Drake & Scull (DSI) extended losses and the Abu Dhabi market also dropped. DSI shares plunged 10 percent for a third consecutive day to close at 0.73 dirhams ($0.19) per share, its lowest ever.
The shares are down 68 percent so far this year as retail investors have offloaded the stock amid concerns about its business outlook and investors worried about the outcome of an investigation into its former management team. DSI said on Wednesday that there was no reason for its stock to be plummeting and that its current projects were on track.
Emaar Properties, the largest listed stock on the Dubai market, fell for a second consecutive day to close down 1.8 percent. Emaar's hospitality unit announced on Wednesday that it had acquired a 15-year hotel operating contract in Togo. Anxiety about the outlook for Dubai's property market has weighed on Dubai's stock market in recent months amid concerns about an oversupply in units.
DAMAC Properties declined 1.4 percent. Union Properties, which said on Wednesday that it had no exposure to embattled private equity company Abraaj, rose 4.5 percent. United Arab Emirates' top securities regulator has asked UAE-listed companies to declare their exposure to Abraaj, Reuters reported on June 21.
Air Arabia fell 0.3 percent, bringing its total losses to 2 percent for the week in the wake of disclosing it had a $336 million exposure to Abraaj. The Dubai index fell 0.7 percent. In Abu Dhabi, the index fell 0.5 percent, as Dana Gas declined 1 percent after disclosing on Wednesday that it holds $6 million in a fund managed by an affiliate of Abraaj Investment Management Limited.
Last week, a court in the Cayman Islands, where Abraaj is incorporated, appointed provisional liquidators for Abraaj Holdings and AIML as the firm tries to restructure its debt. Abraaj has been bruised by a dispute with some of its investors over the use of their money in a $1 billion healthcare fund. The group has denied it misused the funds.
Saudi stocks ended 0.2 percent higher as Al Marai, the Gulf's largest dairy company, rose 2.9 percent and Saudi Arabian Mining Co. (Maaden) gained 0.9 percent. Qatar's index gained 0.4 percent, with Barwa Real Estate and Qatar Electricity and Water Co. rising 1.6 percent and 1.3 percent, respectively.