Dubai Stocks Drop Most in Almost 3 Weeks on Dubai World Report

Dubai stocks retreated the most in almost three weeks as Zawya Dow Jones said Dubai World, the state-owned holding company seeking to restructure $22 billion of debt, may offer creditors 60 cents on the dollar after seven years. Kuwait’s benchmark index surged the most in six months.

Emaar Properties PJSC, the builder of the world’s tallest skyscraper, dropped the most this month. Dubai Islamic Bank, the United Arab Emirates’ largest bank complying with Islamic banking rules, fell the most in two months. Dubai’s DFM General Index lost 3.5 percent, the most since Jan. 26, to 1,617.51. Abu Dhabi’s benchmark index declined 0.6 percent.

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“The sizable haircut and the length of the deferral” as reported “is a disappointment,” said Julian Bruce, director of equity sales at EFG-Hermes Holding SAE, the biggest publicly traded Arab investment bank.

Dubai World’s debt deal may be guaranteed by the government and may not offer interest payments to creditors, Zawya Dow Jones reported, citing unidentified people familiar with the plans. Dubai has not made an offer to creditors to restructure the debt of Dubai World, said a spokeswoman of the emirate’s department of finance after the end of the trading day in Dubai.

The Dubai government said Nov. 25 state-run holding company, Dubai World, is seeking a “standstill” accord on its debt. Dubai World announced Dec. 1 it was seeking to alter terms on about $26 billion of debt.

Kuwait

Credit-default swaps linked to Dubai debt on Feb. 12 jumped to 631.08, the highest since Nov. 27, according to CMA Datavision prices on Bloomberg. Credit default swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent should a borrower fail to adhere to its debt agreements. A basis point is 0.01 percentage point and is equivalent to $1,000 a year on a contract protecting $10 million of debt.

Emaar fell 5.9 percent to 3.04 dirhams, the most since Jan. 26. Dubai Islamic Bank dropped 4.9 percent to 2.32 dirhams, the most in two months.

Kuwait shares advanced 1.8 percent, the most since August, after Zain, the country’s biggest phone company, confirmed that it received an offer to sell its African assets.

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“Kuwait equities are being driven higher following confirmation of the offer for Zain’s African operations,” said Bruce. “All of the Kharafi names are trading higher due to their Zain cross-holdings and the rest of the market is following dutifully.”

Kuwait’s Jump

National Investments Co., an asset-management company, jumped 6.9 percent to 385 fils, the highest since December. Kuwait Foods, a food processing and restaurant operator known as Americana, rose to 1,600 fils, the highest in more than three months.

Zain said it received an offer for its African assets, excluding Morocco and Sudan. State-run news agency Kuna reported after the markets closed that Zain’s board unanimously agreed to sell Zain Africa to India’s Bharti Airtel Ltd. Bharti made a $10.7 billion offer for the assets, Al-Rai newspaper reported yesterday.

Oman’s MSM30 measure increased 1 percent. Qatar’s Doha Securities Market 20 Index and Bahrain’s gauge dropped 0.4 percent. Saudi Arabia’s Tadawul All Share Index added 0.3 percent.

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