Abu Dhabi's Aabar Investments has cut its stake in Dubai builder Arabtec , the stock exchange said on Wednesday, raising questions over the state fund's commitment to what it has seen as a strategic asset.
Having failed in an earlier takeover bid, Aabar spent AED827.6m ($225.32m) buying up 21.6 percent of Arabtec's shares in 2012 and later led an overhaul of the contractor's board and senior management.
Aabar's buying helped Arabtec's shares rebound. The stock hit an all-time high of AED7.4 on May 15 to be up more than eight-fold since the start of 2012.
But on Wednesday, Dubai's stock exchange announced Aabar had cut its stake in Arabtec to 18.85 percent since Sunday.
Arabtec's shares fell 7.8 percent on Wednesday, taking its losses to 30 percent in four days.
"Is there more to be sold in Arabtec by Aabar and, if not, what is Aabar's investment strategy centred round Arabtec in the longer term?" said Allen Sandeep, director of research at Naeem Holdings in Cairo. "If yes, then would it affect Arabtec's anticipated growth going forward?"
Aabar was not immediately available to comment, while an Arabtec spokesman referred Reuters to the bourse statement concerning Aabar's holding.
In February, Arabtec said it would build 37 towers worth AED22.44bn ($6.11bn) in the United Arab Emirates for Aabar, while a month later it agreed a $40bn housing project in Egypt.
The latter project was seen as part of the United Arab Emirates' support for Egypt following the army's overthrow of former Islamist President Mohamed Mursi.
Arabtec will need Aabar support to fulfil some of these projects, said Naeem's Sandeep.
In an earlier statement on Wednesday, Arabtec said its share price moves had nothing to do with its financial position and that its ambitious expansion plans remained in place.
In May, the company's chief executive Hasan Ismaik raised his own stake in Arabtec to 21.46 percent.
Four of Arabtec's nine board members are associated with Aabar and its parent firm International Petroleum Investment Company, including the chairman Khadem Abdulla Al Qubaisi.