Construction firm sees stock rocket on hopes for positive news from the company or one of its major shareholders
Dubai's bourse outperformed a generally strong region on Tuesday as construction firm Arabtec surged on hopes for positive news from the company or one of its major shareholders.
Arabtec soared 13.6 percent to a one-month high of AED4.86 ($1.32) and was among the main supports for the index, which jumped 3.4 percent. Trading volume in the stock rose more than fivefold and was the second highest this year.
One of the reasons for Arabtec's surge appeared to be hopes that Abu Dhabi state fund Aabar Investments, a major shareholder in Arabtec, could raise its stake. Aabar held a board meeting on Monday, sources told Reuters, but did not disclose the results of the meeting. Aabar declined to comment.
Earlier this year Arabtec more than tripled in value to a record peak of AED7.74, but it plunged 61 percent in June as Aabar reduced its stake to 18.94 percent from 21.57 percent. This month, Arabtec chariman Khadem Abdulla Al Qubaisi said Aabar remained committed to the company and might increase its stake again.
Some investors may also be betting on strong second-quarter results, said Allen Sandeep, director of research at Naeem Holding. Analysts surveyed by Reuters expect Arabtec's quarterly profit, to be announced sometime in coming weeks, to jump 20 percent.
"I think the move that we saw today was a result of impatience by mainly retail investors," said Julian Bruce, director of Western institutional equity sales at EFG Hermes in Dubai. "There were some buyers on the sidelines who decided they should wait no longer."
Some other stocks in Dubai also rose sharply. Property developer Deyaar surged 12.2 percent and investment bank Shuaa Capital jumped 7.4 percent after Shuua said its second-quarter profit more than quadrupled.
In Abu Dhabi, the main drivers of the previous day's leg up, National Bank of Abu Dhabi and First Gulf Bank , pulled back 2.7 and 0.6 percent respectively.
But the index added 0.3 percent as telecommunications firm Etisalat rose 1.3 percent and Aldar Properties, the emirate's biggest listed developer, surged 3.0 percent.
Qatar's bourse rose 0.9 percent on strong second-quarter results. Qatar Islamic Bank was the main support, gaining 5.4 percent after its second-quarter profit jumped 15 percent, beating analysts' expectations by a wide margin.
Qatar Insurance Co was another main driver, rising 3.8 percent after its quarterly profit more than doubled to QAR319 million ($88 million), beating the estimate of QNB Financial Services, which had forecast QAR221.5 million.
However, Qatar Electricity and Water Co slid 1.7 percent after its second-quarter profit fell 4.4 percent, in line with analysts' estimates.
Kuwait's bourse slipped 0.8 percent after the country's government launched a fresh crackdown on the political opposition, adopting what it called an "iron fist" policy.
It threatened, according to state news agency KUNA, to revoke the citizenship of Kuwaitis suspected of trying to undermine stability.
Also, shares in Kuwait's Agility, the largest logistics firm in the Middle East, dropped 3.7 percent after being diluted through a 5 percent bonus share issue on Monday.For all the latest market 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.