DUBAI, June 25 (Reuters) - Dubai stocks fell more than one percent in early trade on Monday, led by losses in contractor Drake & Scull, while Saudi stocks were flat after gains ahead of index compiler MSCI’s move to lift Riyadh to its emerging markets benchmark.
Drake & Scull shares were down nine percent at 0.910 dirhams ($0.2478) in morning trade on retail selling after it fell below a key support level of one dirham.
Concerns about Drake & Scull’s business outlook and ongoing investigation against its previous management are weighing on the stock, traders said. The stock is down over 60 percent so far this year.
Other stocks weighing on the Dubai index included Dubai Islamic Bank, which fell 1.6 percent after investors took profit on recent gains on the back of its successful rights issue. The stock is up three percent in the last one month despite Monday’s losses.
Saudi stocks opened flat as investors paused after a strong rally on the back of expectations that Riyadh will be added to the MSCI emarging market benchmarks.
The Saudi index is up nearly 15.6 percent this year, the best performing index in the Gulf region.
Charles-Henry Monchau, chief investment office at Al Mal Capital in Dubai, said overall valuations for Saudi stocks are not very attractive after the recent gains and the market can lose momentum from here onwards.
“Investor focus would now shift back to fundamentals and the second quarter results coming in a couple of weeks, would be a good reality check of underlying trends,” he said.
Qatar stocks failed to sustain themselves above the 9000-point psychological barrier in early trade and the index was down 0.1 percent. Qatar National Bank was down 0.9 percent. ($1 = 3.6728 UAE dirham) (Reporting by Saeed Azhar, Editing by William Maclean)