Reuters reported that declines in property stocks and some banks dragged Abu Dhabi's index to its first reverse in 11th sessions, while Dubai's index ended lower for a 3rd day.
Abu Dhabi Commercial Bank fell 2.1% and First Gulf Bank slipped 0.9%. Dubai Islamic Bank and Emirates NBD lost 1.2% and 0.3% respectively.
Mr Sanyalaksna Manibhandu research head of Emaar Saudi Financial Services said that "The regional talking point has been the troubled Saad and Algosaibi groups and it is inconceivable there will only be 2 family companies in difficulties, there must be more and we need to know about them."
Struggling Saudi conglomerates Saad Group and Ahmad Hamad Algosaibi & Bros are restructuring billions of dollars of debts. According to court documents, earlier this month, Algosaibi filed a lawsuit in New York against Mr Maan al-Sanea the billionaire head of the Saad Group, in a case involving allegations of USD 10 billion in loan irregularities.
National Bank of Abu Dhabi surged 7.5% after the company announces plans for a 10% share buy back. It posts a 9.3% drop in Q2 profit after taking provisions worth AED 500 million in the H1 of 2009.
Mr Manibhandu said that "Banks that have provisioned heavily are doing the right thing they're frontloading the bad news and should benefit going forward. The banks that have been giving the right information will be rewarded by the market, because investors will see that bad news has been provided for."
He said that "Dubai is holding above 1,800 points and is not going to fall to new lows there are people who are picking up stocks whenever there is a bad down day. Money is waiting on the sidelines to come back in. In terms of volumes, trading will be lacklustre for the next few weeks at least."
