Shares in Dubai construction firm Arabtec fell again on Thursday after a bounce in the last session, taking the steam out of a rally on the emirate's bourse. Other Gulf markets were mixed in thin trade ahead of Ramadan.
Arabtec dropped 5.5 percent, erasing the previous day's gains while trading volume in the stock halved. Dubai's benchmark slipped 0.7 percent, after rising as much as 1.0 percent early in the session.
After swinging wildly this month in response to Arabtec's gyrations, the Dubai index is down 22 percent from its multi-year peak in mid-May, though still up 25 percent year-to-date. With the Ramadan lull about to begin and few fresh, positive catalysts on the horizon, the market will stay vulnerable to profit-taking, fund managers believe.
Even though Arabtec has reassured investors it will continue expanding, it remains unclear who will become its new full-time chief executive following the resignation of Hasan Ismaik last week. Investors are also concerned about the fate of Ismaik's 28.85 percent stake in Arabtec.
Other property-related stocks also suffered in Dubai on Thursday. Top developer Emaar Properties fell 1.3 percent, Deyaar Development slid 1.9 percent and Union Properties dropped 4.5 percent. Construction firmDrake and Scull edged down 1.2 percent.
Abu Dhabi's bourse, on the other hand, continued to recover, adding 0.6 percent on the back of blue-chip banks. National Bank of Abu Dhabi rose 3.2 percent and Abu Dhabi Commercial Bank jumped 4.3 percent.
Property stocks, however, remained under pressure in Abu Dhabi too. Shares in major developer Aldar Properties fell 1.7 percent while RAK Properties and Eshraq Properties were down 4.1 and 3.2 percent respectively.
Qatar's benchmark continued to retreat from its late-May all-time peak and slid 2.4 percent. Islamic lenderMasraf Al Rayan was the main drag, dropping 4.8 percent.
The Qatar bourse, together with Dubai and Abu Dhabi exchanges, gained sharply in the first five months of this year as index compiler MSCI prepared to upgrade them to emerging market status at the end of May.
That made them vulnerable to speculation and subsequent profit-taking. Thursday's slide extended Qatar's losses this month to 13.7 percent, compared to Dubai's 17.0 percent and Abu Dhabi's 11.2 percent.
Egypt's bourse edged up 0.2 percent, ending a five-day losing streak. Among the gainers was investment bank EFG Hermes , which is awaiting the results of an independent valuation following a bid for 20 percent of its shares. The stock added 0.3 percent to 15.35 pounds.
A group represented by Beltone Financial Holding offered this month to buy a 20 percent stake in EFG Hermes at 16.00 pounds per share. The tender offer was originally to run until July 3 but the regulator said on Thursday it would be extended to July 6.
EFG Hermes has hired HC Securities & Investment as an independent financial advisor to evaluate the bid. According to Mohamed Radwan, director of international sales at Pharos Securities, some investors are betting that HC Securities will value EFG Hermes above the offer price.
"Right now, 16 pounds acts as the ceiling, but in that case it will become a floor for the price," he says. It is not clear when HC Securities will complete the evaluation but the market expects it to do so very soon, with little time left before the offer's expiry.
In addition to the weekend, Egypt's bourse will be closed on Tuesday, July 1 for the start of a new fiscal year.
In Saudi Arabia, Abdul Mohsen Al-Hokair Group for Tourism and Development Co jumped the daily limit of 10 percent on its listing, which followed a $220 million initial public offer. The main index slipped 0.1 percent.