Global Markets
Dubai stocks sink to a four-month low as Houthi strikes on Saudi Arabia hit UAE banks; ADCB falls 3.7% despite a 15% profit rise
UAE bank and property shares led Friday's losses as Brent climbed above $114, overshadowing a strong quarter from Abu Dhabi Commercial Bank.
HedgeWeekly News Desk ·
Dubai's main share index fell 1.4% on Friday to its lowest level in more than four months, and Abu Dhabi's benchmark dropped 1.2%, as fresh Houthi attacks on Saudi Arabia stoked fears of a wider regional conflict. The two markets ended the week down 2.3% and 2.2% respectively. Brent crude rose 1.3% to $114.61 a barrel by 11:48 GMT on concern about further disruption to Middle East energy supplies.
Lenders and property developers took the brunt. Emirates NBD lost 3.5%, Emaar Properties 2.1% and Aldar Properties 3.7%, while ADNOC Logistics & Services fell 3.9%. Abu Dhabi Commercial Bank dropped 3.7% on the same day it reported a 15% rise in third-quarter net profit to Dh3.56 billion, its 21st straight quarter of profit growth.
ADCB's nine-month figures were equally firm: net profit rose 27% to Dh10.3 billion, net customer loans grew 18% to Dh469 billion and customer deposits climbed 16% to Dh558 billion. Return on average equity improved to 16.2% and the cost-to-income ratio fell to 27.3%.
Why it matters: the selloff shows geopolitical risk overriding earnings in Gulf markets. This week's attacks included strikes on a civilian airport in Dammam that killed two people and a drone strike on an oil field that killed two more, the US State Department ordered some diplomats to leave its Saudi missions, and Saudi Aramco reportedly told staff to leave its Dhahran headquarters. Saudi Arabia's benchmark was on course for an eighth straight weekly fall as of Thursday. For funds with Gulf exposure, the widening gap between bank fundamentals and share prices, and the path of oil prices, are the signals to watch.