Dubai’s shares rose to the highest in almost five months, led by Arabtec Holding PJSC (ARTC), amid speculation investors are accumulating the company’s stock on bets it will benefit from regional infrastructure spending.
Arabtec, the United Arab Emirates’ biggest construction company, surged 9.2 percent. Drake & Scull International PJSC, the Dubai-based construction company, rose to the highest since August. Dubai’s DFM General Index (DFMGI) jumped 0.6 percent to 1,476.24, the highest since Sept. 8, at the 2 p.m. close in the emirate. Abu Dhabi’s ADX General Index (ADSMI) decreased 0.1 percent.
“Arabtec continues to surprise and there are definitely bigger volumes,” said Ahmed Talhaoui, the Abu Dhabi-based head of investment and asset management at Royal Capital PJSC. “There are stories about winning more business from Abu Dhabi airport, but that does not justify the stellar performance.”
The shares rallied for a sixth day, the longest stretch of gains since April 2008, bringing this year’s advance to 64 percent. That compares with a 12 percent gain in Emaar Properties PJSC (EMAAR), the company with the heaviest weighting in Dubai’s stock measure. Arabtec, the builder of the world’s tallest skyscraper in Dubai, has been eyeing opportunities outside its home market after construction slowed.
Arabtec shares rose 9.2 percent to 2.60 dirhams, the highest level since November 2009, and the most traded on Dubai’s index today. Calls made to Arabtec Chief Financial Officer Ziad Makhzoumi by Bloomberg News today were not answered.
Drake & Scull jumped 4.2 percent to 92.7 fils, the highest since Aug. 4. The shares lost 24 percent in 2011.
“We know for sure there was a lot of dumping last year of real estate stocks,” said Talhaoui. “There could be some capitulation in selling.”
Arabtec said in November the value of a contract it won in Saudi Arabia may rise to 1.5bn riyals ($400 million) as it expands in the biggest Arab market. The company last month won a 25-month contract valued at 561mn dirhams to carry out expansion at Dubai International Airport. One of its units got 256 million dirhams of contracts in Abu Dhabi last week.
Abu Dhabi, the oil-rich emirate transforming itself into a business and cultural hub, plans to resume projects including branches of the Louvre and Guggenheim museums after reviewing their viability, the government said in January.
In Saudi Arabia, King Abdullah announced a $130bn plan last year to build homes and create jobs to stave off regional protests that toppled leaders in Tunisia and Egypt. The rulings added to a commitment announced in 2010 to spend $384 billion over five years on housing, transport and education.
Oman’s MSM30 Index rose 0.1 percent, while Kuwait’s Stock Exchange Price Index (KWSEIDX) retreated 0.3 percent. The Bloomberg GCC 200 Index (BGCC200) fell 0.5 percent. Saudi Arabia’s Tadawul All Share Index (SASEIDX) decreased 0.3 percent, snapping a ten-day winning streak. Qatar’s QE Index (DSM) rose less than 0.1 percent, while Bahrain’s gauge dropped 0.1 percent.For all the latest tech news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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