Builder unlikely to be affected by move to redeem outstanding amount of $500m convertible bond
Shares in Dubai bellwether Emaar Properties are unlikely to be affected by the company's move to redeem the outstanding amount of a $500 million convertible bond next month.
Paper worth $237.5 million was still outstanding following an earlier conversion of the bonds into stock late last year and will be redeemed on Feb. 6, Emaar said.
The conversion price will be 4.38 dirhams per share, significantly below Monday's closing share price of 7.90 dirhams.
The stock lost about 3.5 percent of its value in mid-December on dilution worries, which analysts said would be around 2.2 percent.
"This is not a big deal and if anything it will help Emaar save on interest payments to bond holders," says Sanyalaksna Manibhandu, senior analyst at NBAD Securities.
Emaar's share price more than doubled during 2013 and a bullish outlook for the stock remains intact, underpinned by a recovery in Dubai's property sector.
"Emaar is launching more projects and their delivery schedule for 2014 shows an improvement over 2013, which is why you're able to chase higher valuations," Manibhandu adds.
Shares in Dubai-listed Gulf Navigation may gain after the firm received shareholder backing to continue operating as well as approval for a write-off of accumulated losses and a convertible bond issue.
The sale of two very large crude carriers (VLCC) that according to local press reports was held up by creditors claims against them, was also approved.
Egypt exchange is closed on Tuesday for a religious holiday, according to bourse data.
Elsewhere, Asian shares stabilised on Tuesday after four straight days of losses, while Brent oil futures climbed above $107 a barrel.