Arabtec shares plunge 9.9% to near limit

News senior exec sacked, hundreds fired sees rapid sell-off; share price has halved since May

The price of shares in UAE construction firm Arabtec has plummeted by nearly 10 percent – the daily limit - in less than two hours since trading opened on Monday after news a senior executive and hundreds of employees had been fired from the company.

The share price had fallen 9.9 percent to AED3.46 ($0.94) at 11.45am, according to the Dubai Financial Market (DFM) website.

The fall brought down the entire Dubai market, down 2.7 percent, the largest decline in the Gulf on Monday morning, as investors look to book profits ahead of the Islamic month of Ramadan, when trading typically slows.

It was revealed on Sunday night that Arabtec’s head of mergers and acquisitions, Shohidul Ahad-Choudhury, had been sacked days after chief executive Hasan Ismaik resigned.

Ahad-Choudhury, a former Deutsche Bank executive, had joined Arabtec in March 2013 and also acted as financial advisor to Ismaik, according to Bloomberg.

Based in Abu Dhabi, he was responsible for implementing the company's new strategy, mergers and acquisitions, joint ventures, and strategic financing activities.

The company’s share price has more than halved since May.

The fall was instigated when major shareholder Aabar Investments, an Abu Dhabi state fund, cut its stake in the company to 18.85 percent from 21.57 percent between June 8 and 11. The stake is now 18.94 percent, according to bourse data.

Ismaik, who abruptly resigned from the company last week, said on Thursday he had no plans to sell his 28.85 percent stake.

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Posted by: SAM

Ismaik had 28.85% of the company and Aabar Investments had 21.57% before the fiasco. Combined, Aabar & Ismaik had more than 50% of shares and together they had control of the company. The message that Aabar appears to be giving by reducing ownership to 18.94% is that this joint control strategy is over, for mysterious reasons. Probably Aabar is trying to force the hand of Ismaik by fanning this uncertainty and causing share value to drop drastically. I guess eventually, Aabar will get control of the company without Ismaik's participation and share price will then gradually climb back. Sellers are getting suckered.

Posted by: shak shaqeel

ARTC is a power horse of company which send shivers throughout the DFM and GCC stock markets.In my opinion the big boys and the press manipulate this stock for they own strategic gain through chinese whispers.There is no reason for the share to drop the way it has done.Firstly Ismaik is gone but a more than capable person has replaced him who certainly will bring more orders and finance to ARTC, as he is also a director of Aabar.Although Ismaik resigned, as a insider he had the knowledge of what the company was worth and which direction it was going and total faith in Aabar to continue supporting ARTC,therefore he bought so many shares.Aabar only sold a small amount of shares as adjustment into one umbrella,if they did not want to back ARTC then they would have sold all the shares.It is only normal that when a new director comes to office he brings his own staff and relieves previous staff. Fundamentally ARTC has massive orders,money in the bank,making huge profits and backed by Aabar.

Posted by: Risk Culture Builder

Addressing the aspect of people risk is the only way an organisation can improve the way their people respond to a situation of risk and the effectiveness of their risk management function.

Posted by: Zahid

Has anything changed technically or fundamentally with ARTC? It's insane to see the share price tank the way it has. The investor relations dept at ARTC should release a PR and help clarify and calm down the sell off

Posted by: khalid

Either PR dept only knows how to release good news or they also don't know whats going on.
either way; they fail !

Posted by: Nberardis

Still more downside to come in my opinion

Strange 100s have been sacked when they have 50bn of projects in the pipeline

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