Aldar at five-year low, property weighs on UAE

Abu Dhabi's Aldar Properties slumped to a five-year low, extending declines since it unveiled a restructuring plan dilutive to minority shareholders, but bank stocks limited the losses on the UAE capital's index. Aldar fell 1.5 per cent to Dh1.93, its lowest finish since at least May 2005. The indebted developer's shares were down 15.4 per cent since saying it would take $2.9 billion in impairments and issue a convertible bond to a government-owned investment vehicle, measures seen eroding shareholder value. Abu Dhabi's government will also buy various assets from Aldar for $4.5bn. Rival Sorouh Real Estate fell 0.7 per cent.

"UAE markets will remain under pressure because of real estate – most listed companies are exposed directly or indirectly to real estate, whether they are developers, contractors or banks," says Shahid Hameed, Global Investment House head of asset management for the Gulf region. House prices in Abu Dhabi and Dubai are seen making further double-digit declines as over-supply weighs on valuations, a Reuters poll last week showed. Dubai prices are already about 60 per cent below a 2008 peak. National Bank of Abu Dhabi climbed 1.3 per cent, while Abu Dhabi Commercial Bank and First Gulf Bank each rose 1.5 per cent. Abu Dhabi's index slipped 0.04 per cent to 2,683 points. In Dubai, Emaar Properties gave up early gains to end 0.3 per cent lower, while Dubai Islamic Bank dropped 0.5 per cent, with investors little moved by the latter appointing a new chief financial officer. Dubai's index fell 0.3 per cent to 1,604 points.