Arabtec plunge weighs on Dubai bourse, Abu Dhabi down

  • Share via facebook
  • Tweet this
  • Bookmark and Share

Dubai builder Arabtec plunges to a 13-month low as investors dump the stock ahead of a planned capital increase that will be dilutive to shareholders.

Arabtec drops 10 percent to AED2.17, its lowest close since February 2, 2012. The stock has fallen 27 percent in three sessions since the company announced plans to raise US$1.8bn in capital.

Analysts say the stock will continue to fall until it reaches around AED1.5, the price at which the rights issue will be factored in.

Bellwether Emaar Properties falls 2.6 percent, trimming 2013 gains to 42.4 percent.

Dubai's benchmark retreats 1.9 percent to 1,899 points, a two-week low.

The market faces weakness on the technical chart after rising to a 39-month high last week.

"The 1,775 is a major support level in the intermediate trend and keeps the market bullish," says Musa Haddad, head of investment advisory services at National Bank of Abu Dhabi.

In neighbouring Abu Dhabi, shares in merger targets Aldar Properties and Sorouh Real Estate tumble to two-week lows as investors book recent gains, with this pair dropping 5.2 and and 3.7 percent respectively.

Both stocks have more than doubled in price over the past year in anticipation of a state-backed merger. Sorouh is still up 43.7 percent in 2013, while Aldar has gained 14.8 percent over the same period.

A majority of shareholders at both companies approved the merger on Sunday. Some of the new entity's senior management was named, although no mention was made about who would be chief executive.

Sorouh shareholders will receive 1.288 Aldar shares for every share they hold in Sorouh, which will then be delisted on completion of the merger.

Abu Dhabi's index slips 0.3 percent to finish at 3,026 points, down for a third consecutive session since Wednesday's 40-month peak.

Elsewhere, Qatar's measure ends 0.2 percent lower at 8,514 points, Kuwait's index climbs 0.2 percent to 6,487 points and Oman's benchmark advances 0.3 percent to 6,001 points.

Related:
Companies
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Further reading

Features & Analysis
Blood on the bourse floor

Blood on the bourse floor

Arabtec’s share price collapse was the catalyst for a huge sell...

Taking stock

Taking stock

Gulf stock markets have seen a dearth of IPOs since the global...

Steering clear of the stock markets

Steering clear of the stock markets

Listing was all the rage three years ago, but IPOs have since...

Most Discussed