Dubai slips, most of region up

File - Investors share a laugh as they monitor stocks at the Dubai Financial Market, June 17, 2013. (REUTERS/Jumana El Heloueh)

DUBAI: Momentum driving markets in the United Arab Emirates was tempered Sunday after the regulator approved changes to margin lending rules and said it would crackdown on unlicensed lending, while most other regional bourses scaled higher. Dubai’s index slipped 0.2 percent, easing off Thursday’s five-year high.

The market gave back early-session gains as brokers told clients to sell shares so margin limits would fall within the amended regulations.

Although changes to the lending rules aim to improve trading volumes going forward, the likelihood of penalties for not complying with the set limits sent some brokers scrambling to lower margin levels.

Most of the trading on Dubai’s bourse was on margin, which is now being cut back, traders said.

“Today, margin trading business from what we can see in volumes is low,” said Mohammad Ali Yasin, managing director of Abu Dhabi Financial Services. “This is for the short term, as brokers will raise their capital to allow for more leverage.”

Abu Dhabi’s index rose 0.6 percent, in its fifth consecutive gain, to a new five-year high.

Banks supported, with Abu Dhabi Commercial Bank up 3.5 percent and Union National Bank 3.9 percent higher. Analysts expect Abu Dhabi lenders to announce strong dividends in the coming weeks.

In Qatar, the measure advanced 1.1 percent in its second sharp advance as investors position for dividends. Regional investors favor Qatari stocks in dividend season, which are among the highest-paying in the region.

In Egypt, Cairo’s benchmark index added 0.6 percent to 6,854 points, heading back to the previous peak of 6,876 points – the intraday high of Dec. 26.

The market gained despite fresh violence over the weekend.

“We expect to see more and more violence from the supporters [of ex-President Mohammad Morsi] but the market has been quite resilient,” said Mohammad Radwan, director of international sales at Pharos Securities.

Elsewhere, Saudi Arabia’s measure struggled to make gains but closed up 0.2 percent. Oman ticked up 0.1 percent, while Kuwait’s benchmark was little changed.

A version of this article appeared in the print edition of The Daily Star on January 06, 2014, on page 5.




Your feedback is important to us!

We invite all our readers to share with us their views and comments about this article.

Disclaimer: Comments submitted by third parties on this site are the sole responsibility of the individual(s) whose content is submitted. The Daily Star accepts no responsibility for the content of comment(s), including, without limitation, any error, omission or inaccuracy therein. Please note that your email address will NOT appear on the site.

Alert: If you are facing problems with posting comments, please note that you must verify your email with Disqus prior to posting a comment. follow this link to make sure your account meets the requirements. (

comments powered by Disqus



Interested in knowing more about this story?

Click here