Leading index provider MSCI (Morgan Stanley Capital International) announced Thursday morning that it would not upgrade the United Arab Emirates (UAE) and Qatar to ” emerging markets.”
Consequently, stock markets in Dubai and Abu Dhabi, both belonging to the UAE, and in Qatar’s capital Doha lost over 1 percent today.
The Dubai Financial Market (DFM) General Index fell 1.76 percent, while the gauge of the Abu Dhabi bourse ADX declined 1.21 percent amid high trading volumes. In Dubai, market leader Emaar Properties, the Gulf Arab region’s largest real estate developer, plummeted 4.33 percent to 2.65 Dirham (0.72 U. S. dollars).
At Dubai’s international market NASDAQ Dubai, the FTSE NASDAQ Dubai UAE 20 Index closed at 1,415.79 off 2.56 percent. Dubai Ports (DP) World plummeted 3.92 percent to 9.80 U. S. dollars, while Damas, the international jewelry trader from Dubai, plummeted 6.67 percent to close at 0.14 dollars.
The Qatar Exchange in Doha slipped 0.20 percent to 8,752.87 points. The UAE and Qatar will remain at least for the next six months “frontier markets” in the MSCI scheme.
MSCI said in a statement the UAE should ensure strict “delivery- versus-payment” rules at its exchanges, while the index provider demanded from Qatar to open up its market for foreign investors.
It was the third time that MSCI refrained from re-classifying the two Gulf countries to “emerging markets.”
Husam Hourani, Managing Partner at Al Tamimi & Co., the region’s largest lawyers firm, however, told Xinhua that there is no reason for the UAE to mourn.
“We hope in January 2012 the UAE commercial companies law will eventually be opened up to foreign ownership, meaning more than 49 percent foreign ownership at listed firms. That has been planned for a while.”