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Dubai's Arabtec probed its own share surge

Arabtec Holding, the UAE's largest construction company by market value, said it looked into why its shares gained the most in a year on Tuesday before it released its first-quarter results.

Dubai-based Arabtec stock surged almost 13.6% that day, before the company announced after the market closed a 63% jump in first-quarter earnings.
The stock market regulator, the Securities & Commodities Authority, contacted Arabtec on Wednesday to enquire about a possible leak of the results before they were posted on the website of the Abu Dhabi bourse, Riad Kamal, Arabtec's managing director, told Reuters on Thursday.

"We informed them there was no leak," Kamal said. "I looked into trading that day because the volume was different from usual and found that it was mainly Abu Dhabi investors speculating."

No company directors traded that day, Kamal said.

Ebrahim al-Zaabi, director of inspection and follow-up at the regulator, told Reuters on Thursday the authority was looking into why shares of Arabtec and other companies have surged during the last few days.

"The surveillance is going on for Arabtec and some other companies," Zaabi said. "It's still going on and if we find something we will inform everyone."

Zaabi declined to identify the other companies or be more specific about the surveillance.

Arabtec posted profit of 60.1 million dirhams in the three months to March 31 on higher margins from new projects, beating analyst forecasts.

Kamal told Reuters last month first-quarter profit would beat the average 41% increase analysts forecast in a Reuters survey in March.

"I gave a general indication then what our profit would be," Kamal said.

"The market should have been expecting what we got."

At least three UAE companies, including Aldar Properties, Sorouh Real Estate and First Gulf Bank (FGB) have said in statements that they do not know why their shares have surged during the last few days.

Stock of FGB closed 7.6% higher on Wednesday, the biggest jump in a year.

Shares of Sorouh surged 27.6% in the four days to Wednesday's close. Stock of Aldar jumped 16.3% in the three days from Sunday's open.

In Dubai, share of Amlak Finance, Dubai's worst-performing stock this year, surged almost 15%, the most in a year.

Nasser al-Shaikh, Amlak's chairman, said he could not explain the rise. An application with the central bank to become a bank and be able to take deposits was still pending, he told Reuters on Thursday.

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