Dubai stock market sees strong recovery after official's speech
DUBAI, Dec. 10 (Xinhua) -- Dubai stock market rebounded strongly Thursday after a top government official criticized global media for creating panic with "inaccurate reports" on the state-owned conglomerate Dubai World.
After losing 27 percent of value during the last two weeks, the Dubai Financial Market (DFM) was boosted by bargain hunting. The DFM Index gained 7 percent straight and closed at 1,640.76 points on the last day before the Islamic weekend.
Shares of market bellwether Emaar Properties, the largest Middle Eastern real estate developer by market value, jumped 14.84percent, closing at 2.94 U.A.E. dirhams (about 0.80 U.S. dollar).
Emaar announced Wednesday that it stopped negotiating with state-owned Dubai Holding over a merger with its three real estate subsidiaries Dubai Properties, Sama Dubai and Tatweer. Both parties entered into negotiation in June, but bank analysts have been skeptical about a possible merger's added value ever since.
Ten years ago, Emaar built the famous landmark-hotel Burj Al Arab, which is considered as the only Seven-Star-Hotel of the world. Emaar currently finishes the iconic Burj Dubai in the heart of the city, which is scheduled for official opening on Jan. 4, 2010.
Other shares with significant gains were Dubai Islamic Bank, up14.53 percent at 1.97 dirhams (about 0.53 dollar), and the DFM itself, the only Arab stock market which is listed itself at an exchange, 14.60 percent higher, closing at 1.57 dirhams (about 0.42 dollar).
Some 878 million shares changed hands. While non-Gulf investors mostly withdrew money, Arab investors were net-buyers at the DFM Thursday.
At the Nasdaq Dubai, the only international stock market in the Middle East, Dubai Ports (DP) World rebounded by 11.11 percent, ending at 0.35 dollar.
Dubai World said last week that its subsidiary DP World, the world's fourth largest port operator, will not be part of its debt restructuring plan.
Other markets in the region posted small gains as well, such as Abu Dhabi (up 1.43 percent), Qatar (up 1.19 percent) and Kuwait (up 0.21 percent). Bahrain remained flat, Saudi Arabia was closed, as always on Thursday.
Earlier in the day, Abdul Rahman Al Saleh, Director General of Dubai Finance Department, said world media's inaccurate phrasing like "Dubai default," "Dubai debt meltdown" and "Dubai financial crisis" had created panic at stock markets.
"It was inaccurate, it was unnecessary blind panic, it was a misunderstanding of the status of Dubai, which indeed is a center of trade and economic activity," the official news agency WAM quoted Al Saleh as saying at a conference.
"The reactions were caused by asymmetric information of the situation in Dubai," he said.
Al Saleh admitted that markets' reaction to the debt issue of Dubai World, one of Dubai's largest and most important conglomerates, was psychological and strong.
"However, the reaction is now softening as investors became more informative about what happened," he said, adding that Dubai will eventually emerge as a winner from the current financial crisis.
"We keep our ultimate objectives for the economy firmly in mind-- sustained recovery to high levels of output and employment with price stability. Though we are operating in a highly uncertain world economic situation, we will continue to adapt our policies as necessary to accomplish these objectives," the official said.
