Dubai stocks dive to 27-month low on real estate woes

Dubai stocks hit a 27-month low on Thursday (May 3rd) on the back of sharp falls in the real estate market and a drop in liquidity levels, AFP reported.

The Dubai Financial Market Index ended the day's trading down 1.83% on 2,947.99 points breaching the 3,000-point psychological barrier.

The Dubai bourse dropped 3.1% by the close of the Muslim trading week.

The market has shed 12.5% since the start of the year as cash injections dropped sharply, with the main fall coming from the vital real estate sector.

"Dubai market has underperformed its (Gulf Co-operation Council) GCC markets losing over 12% (YTD) dragged by the sell-off in Real Estate sector," M.R. Raghu, head of research at Kuwait Financial Centre (Markaz) said.

Most of the seven Gulf bourses have made good gains in 2018 due to a partial recovery in oil prices, with Saudi stocks rising 12%.

"Fundamentally, the real estate prices have been falling and the market has been sluggish," Raghu told AFP.

Dubai real estate witnessed a 46% fall in off-plan sales by value in the first quarter, and a 24% decline in previously owned resales, he said.

The real estate sector is one of the main pillars for Dubai's highly diversified economy, which is not dependent on oil.

A massive fall in liquidity levels and reports that international investors, an important component in the market, have moved to Saudi Arabia, are other causes for the downturn, analysts said.

According to local economic reports, liquidity levels dropped a massive 35% in April alone.

Do you like this article?

0 Comment(s)

Comment Policy * Denotes Required Field 1500 / 1500