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Virus concerns hit shares in builder of world's tallest tower
DUBAI'S Emaar group felt the downside of being a proxy for investments in the local exchange as traders rushed to price in the impact of the novel coronavirus on the city's real estate, hospitality and retail industries.
Shares of Emaar Properties PJSC, developer of the 828-metre high Burj Khalifa, slumped 10 per cent this week after more than 230 cases of the virus were confirmed throughout the Middle East. Subsidiaries Emaar Malls and Emaar Development lost 4.7 per cent and 8.4 per cent respectively.
Emirates, the world's largest long-haul carrier, suspended flights to Guangzhou and Shanghai earlier this month, while continuing those to Beijing. The United Arab Emirates (UAE) this week halted all flights to Iran, the epicentre of cases in the region.
The upheaval could hardly come at a worse moment for the listed Emaar companies, which combine to represent about a fifth of Dubai's main equities index.
Emaar Properties has been battered along with its developer peers in the past two years by a slump in the local real estate industry amid a slowing economy. The holding company posted a 4.3 per cent drop in revenue for 2019 as it eked out a slight gain in net income.
Reducing the stream of visitors to Dubai would deliver a blow to the Emaar companies, which rely partly on foreigners to shop in their malls and purchase properties.
Almost a million Chinese travelled to Dubai last year, a 15 per cent increase from 2018; the figure placed the country among the top-five sources of visitors, going by official figures. Arrivals from Iran totalled 284,000. BLOOMBERG