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Wed 16 Jul 2014 10:20 AM

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Dubai could rise further if Arabtec rally continues

Emirate's stock market may rise again on Wednesday if contractor, which soared in the last session, keeps its momentum.

Dubai could rise further if Arabtec rally continues

Shares in Arabtec jumped 13.6 percent to AED4.86 on Tuesday, accounting for most of the turnover on the Dubai bourse, which gained 3.4 percent. Analysts' estimates suggest Arabtec is once again well above fair value; the median target price of eight analysts surveyed by Reuters is AED3.68.

However, the stock has regained the interest of retail investors, who are hoping for strong second-quarter earnings at the company and possibly a decision by major shareholder Aabar Investments to raise its stake. So it may remain strong.

Arabtec's leap helped Dubai trigger an inverse head and shoulders pattern formed by the late June and early July lows, and pointing back up to May's multi-year peak of 5,407 points, which is strong resistance.

Elsewhere in the region, Qatari Islamic lender Masraf Al Rayan may rise after it said it had sold a stake in a local real estate firm to a state fund for QAR1.53 billion ($420 million), which would generate a gain of QAR466 million for the bank spread over three years.

The stock, which usually dominates trading on Qatar's bourse , was suspended on Tuesday pending the announcement.

Saudi Arabian Mining Co (Ma'aden) also looks likely to gain after it posted a higher-than-expected nine-fold rise in net profit in the second quarter.

Hospital management firm Al Hammadi Company for Development and Investment could make further gains after jumping its daily 10 percent limit on its first day of trading.

Al Rajhi Bank, on the other hand, may pull back after trimming its proposed cash dividend for the first half of 2014 to QAR1 per share from QAR1.38 a year earlier as its second-quarter earnings fell 8.2 percent.

In Egypt, Naeem Brokerage on Tuesday raised its target price for property developer SODIC to 45.27 pounds from 34.49 pounds after it bought 1.26 million square metres of land in New Cairo. The stock last closed at 38.71 pounds.

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Simon 5 years ago

Its like the 'blind leading the blind'. Retail investors driving the surge and the institutions sitting on the sides watching in safety...because they understand the real value of Arabtec is fundamentally far less.

In reality, the investment market is nothing more than a casino...some professional gamblers and some not. Each believes they have a system that will win. Other than that, there is little to it...just smoke and mirrors. Some people are just better at gambling than others.

I do not scorn anyone who does 'invest/gamble' in the money markets...You make your bets, you take the risk...and hopefully win! Its all about the money...