Dubai stocks headed for the lowest in a week on bets the United Arab Emirates will miss an upgrade to emerging market status at MSCI and after Spain's rating cut fueled concern the global economy is slowing.
Emaar Properties, developer of the world's tallest skyscraper in Dubai, fell 1 per cent. Arabtec Holding, the UAE's biggest construction company, was set for the lowest close in a week.
The benchmark Dubai Financial Market General Index decreased 0.8 per cent to 1,466.09 at 11.30 am in Dubai, poised for the lowest close since June 7. The measure has gained 0.2 per cent this week.
MSCI, the index provider whose stock indexes are tracked by investors with about $7 trillion in assets, will release the results of its classification review on June 20. The UAE and Qatar are up for a potential upgrade from frontier market status after failing to secure the promotion twice last year as investors cited concern about a settlement system and foreign ownership limits.
"Now that investors know when the decision will be announced the pessimism is starting to emerge; it's unlikely that the UAE will secure an upgrade" as not much has changed since December, said Ziad Dabbas, a financial analyst at National Bank of Abu Dhabi, the UAE's second-biggest bank by assets. "The correlation with global markets on the downside is also ongoing; investors would rather wait for developments in Europe ahead of a long weekend."
Emaar fell to 2.86 dirhams, while Arabtec decreased 0.7 per cent to 2.83 dirhams, set for the lowest close since June 7.
Elsewhere in the Persian Gulf region, Kuwait's measure lost 0.6 per cent, Qatar's QE Index declined 0.2 per cent and Abu Dhabi's ADX General Index slipped 0.1 per cent. Bahrain's measure advanced 0.8 per cent and Oman's MSM30 Index gained 0.1 per cent.