Arabtec Worries Hammer Dubai Stock Market To Lowest In A Month, Ownership Of Giant Construction Company Unclear

 @MeaganKaym.clark@ibtimes.com on July 21 2014 11:10 AM
Dubai
Dubai's skyline has rapidly evolved in the past decade. Reuters

Stocks in Dubai crept back Monday after a big dip Sunday, the deepest in a month after a state-run investment company gave no reassurance about increasing its support for Arabtec Holding Co. (ARTC: DFM), one of the Middle East’s largest construction companies.

Dubai’s stock exchange, the Dubai Financial Market (DFM), gained 2.5 percent Monday after falling 6 percent on Sunday, the biggest decline since June 24. Arabtec’s shares fell 9.9 percent Sunday, the most since June 30. On Monday, Arabtec’s shares had sunk another 1.8 percent, for a total decline of 11.5 percent since Friday.

Arabtec accounts for 5 percent of the DFM, employs about 60,000 people and has had a hand in the region’s most ambitious building projects, including Dubai’s Burj Khalifa, the world’s tallest building.

Arabtec’s shares were halted from trading at the end of last week until more details about its ownership became clear. Aabar Investments PJSC (AABAR: DFM), the UAE government-operated petroleum investment firm, is negotiating buying half of a 28.9 percent stake held by Arabtec’s former chief executive Hasan Ismaik, the Wall Street Journal reported. Ismaik left the company suddenly in May.

In a statement (in Arabic) Sunday, Aabar said the talks were confidential and offered no further clarity.

Dubai’s home prices rose about 32 percent from the past year to the first quarter of this year, Global Property Guide said in June. The International Monetary Fund and others have warned that the UAE should curb real estate speculation in Dubai to prevent a bubble that would burst. Dubai has thrown up building projects from the Islamic world's first eco-friendly mosque to a Six Flags amusement park, with many ambitious plans looming, including the world's biggest shopping mall

 

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