Dubai Stocks Lead Gulf Selloff Amid Travel Curbs: Inside EM

Most Middle East stocks fell, with shares in Dubai leading losses in the Gulf, as increased travel restrictions added to pessimism over vaccine rollouts sweeping global equity markets.

Dubai and Abu Dhabi’s gauges ended 1.6% and 0.9% lower, respectively. Saudi Arabia’s main index retreated 1.2% as Saudi Basic Industries Corp. fell 1.8% even after 2020 profit beat estimates. Qatari stocks declined 0.7%.

The U.K. announced over the weekend it was banning direct passenger flights from the United Arab Emirates, of which Dubai and Abu Dhabi are part, to stop the spread of a new virus strain originally identified in South Africa. Meanwhile, Saudi Arabian authorities delayed the reopening of the country’s borders.

Global stocks slumped last week, with the S&P 500 tumbling 1.9% on Friday, as bidding by retail traders for heavily-shorted U.S. stocks fanned speculation hedge funds would have to reduce their market exposure, while concern over the deployment of coronavirus vaccines sapped risk appetite. A gauge tracking emerging-market shares posted the biggest weekly drop since March.

Shares in Dubai had been recovering from a virus-triggered selloff amid prospects of a pick-up in tourism, one of the main pillars of the emirate’s economy. Sunday’s declines came even as the UAE announced plans to offer citizenship to a select group of foreigners, the first Gulf nation to formalize a process aimed at giving expatriates a bigger stake in the economy.

Though the decision is a positive one for markets, more details are needed, Arqaam Capital’s head of equity research Jaap Meijer said in an interview with Bloomberg Television.

In Israel, the main index lost as much as 2.2%, the most since December. It was dragged down by Teva Pharmaceutical Industries, which fell 4.2% as of 2:42 p.m. in Tel Aviv, after its shares listed in the U.S. declined 3.8% on Friday.

HIGHLIGHTS
  • The MSCI Emerging Markets Index retreated 4.5% last week, the biggest weekly drop since March 20. The index trimmed gains in January to 3%
  • EM Review: Valuation Jitters Grip Stocks as Pandemic Worsens
  • Brent crude rose 0.9% for the week ended Jan. 29, at $55.88/barrel

MIDDLE EASTERN MARKETS:

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