Real estate giants in Middle East see shares plunge after Lehman Bros collapse
The collapse of US banking giant Lehman Bros has shaken the UAE markets, causing fears that the Dubai property boom could be halted in its tracks.
Early trading today saw Dubai’s main index drop 4% on opening.
Tamweel fell by 7% and Emaar Properties dropped over 6%. In Abu Dhabi, Aldar Properties fell almost 6%.
The stocks rebounded later in the day, but the volatility of global trading could have serious repercussions on the increasinly unstable Dubai property market.
Emaar Properties, the developer behind the Burj Dubai, announced a share buyback scheme this weekend after its shares fell nearly 50% in the past year.
But the announcement that it would buy back 10% of its shares has so far failed to turn Emaar’s fortunes around.
The company’s share price yesterday fell to a three-year low, and sank lower still in today’s downturn.
The collapse of Lehman Brothers and the simultaneous acquisition of Merrill Lynch by the Bank of America have sent stock markets worldwide into freefall.