Dubai shares fell to the lowest in a week on concern Dubai World will stop paying interest on loans starting this month, and as stocks slid globally as a deepening debt crisis in Europe’s threatens to slow an economic recovery. Dubai Islamic Bank PJSC, the United Arab Emirates’ largest Islamic lender, dropped the most in more than two weeks after it said first-quarter profit slumped 46 percent. Emaar Properties PJSC, the developer of the world’s tallest skyscraper, retreated for a third time this week. The DFM General Index lost 0.7 percent to 1,723.28 as of 12:38 p.m. in Dubai, bringing the decline for the week to 0.9 percent. The Bloomberg GCC 200 Index of 200 companies in the gulf region slipped 0.2 percent to the lowest in two weeks.
“The focus here remains on the Dubai World process and possible implications for banks and trade creditors,” said Ali Khan, head of cash-equity trading at Dubai-based Arqaam Capital Ltd. “The backdrop to international markets remains weak.”
Asian stocks slumped, dragging the MSCI Asia Pacific Index down the most in three months and erasing its 2010 gain amid fears European government debt levels and efforts by China to crack down on property speculation will hurt the global recovery. The MSCI Emerging Markets Index declined 1.4 percent and the MSCI World Index retreated to the lowest in more than two months.
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