Meydan-linked firm suffers further shares woe

Shares in Malaysian-listed WCT Bhd, whose $1.3 billion contract to build a Dubai racetrack was cancelled, fell for a second day in Kuala Lumpur as analysts cut earnings forecasts at the engineering company.

The stock, which was halted on Tuesday after a 30 percent slide, fell as much as 28 percent on Wednesday before recovering to a 6.2 percent drop.

JP Morgan Chase & Co cut its rating on the stock, newswire Bloomberg reported on Wednesday.

Its partner in the cancelled Meydan contract, UAE construction giant Arabtec, saw its shares fall by more than nine percent on Dubai Financial Market on Wednesday.

The cancellation, after the Dubai client accused WCT and Arabtec of falling behind on the project, has battered future earnings and raised concerns the Malaysian firm will struggle to win other regional orders.

The two-day stock slide has cut $134 million from the company’s market value, Bloomberg added.

WCT and Arabtec Holding won $1.3 billion order in September 2007.

Meydan Group, the master developer overseeing the development, said on Tuesday that despite the cancellation of the deal to construct the main stand and the infrastructure works, the racecourse project was still on target to be completed in time for the 2010 Dubai World Cup.

Built on an area of 67 million square feet, the horse racing city will include a luxury hotel and restaurants, a grand stand with a capacity of 60,000, a dirt and turf course and a presidential and commercial complex. Intersecting the creek is a 4km-long water canal linked to Dubai Creek.

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