Aramex gained the most in more than four years after a unit of Australian Postal Corp. sold its stake in the package-delivery service, enabling other foreign investors to buy the stock.
Aramex advanced 9.1 percent in Dubai on Wednesday, the biggest increase since December 2014, to end at the highest level in more than a year. It was the best performer among the 37 companies on Dubai’s main share index.
Australia Post Transaction Services sold its 10 percent holding in Dubai-based Aramex for about 603 million dirhams ($164 million), according to a filing. That opens the way for more investors from outside the Gulf to buy stakes, since the stock was almost at the 49 percent regulatory limit of foreign ownership.
“Aramex is a great company trading at very cheap valuations,” and Australia Post’s disposal “is a catalyst for unlocking this value,” said Mohammed Al-Alwan, managing director at at Al Rajhi Investment in Riyadh. “Many hedge fund managers were unable to buy this company because of the foreign ownership limit. Many people were waiting on the sidelines.”
The delivery company, which competes in the Middle East with Deutsche Post’s DHL and United Parcel Service, offers advantages including a high return on equity and zero net debt, Al-Alwan said.For all the latest transport 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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