Arabtec surges on contract wins; Gulf markets end mixed

Reuters/Dubai

Dubai’s Arabtec jumped to a near four-month high yesterday as recent contract wins boosted sentiment ahead of the builder’s earnings, while Gulf Arab markets were mixed in muted trade.

In Qatar, the index declined 0.2%, its fourth decline in five sessions since last-week’s 57-month high.

Shares in Arabtec jumped 5.1% to their highest close since February 28. The builder has secured a flurry of contracts under its new management, led by Abu Dhabi state fund Aabar Investments.

The latest is worth 4bn dirhams ($1.09bn) to build a mixed-use development project by Abu Dhabi’s Aldar Properties in Kazakhstan.

“Arabtec’s legacy business is doing quite well and the backlog has doubled in the last year and a half,” said Loic Pelichet, assistant vice-president for research at NBK Capital. “On standalone basis, it just about justifies the current share price.”

The new awards, along with better sentiment for the UAE’s property sector are adding to upbeat sentiment on Arabtec, he added.

The stock is recovering from sharp declines in late February after the company announced massive capital raising plans that could be dilutive to shareholders.

Dubai’s measure rose 0.6%, extending 2013 gains to 47.5%.

Abu Dhabi’s benchmark gained 0.2% to its highest close since October 2008.

Elsewhere, Cairo’s main benchmark slipped 0.5%, its second decline in five sessions days since June 12’s one-year low.

Local investors have sold shares ahead of the first anniversary of President Mohamed Mursi taking office on June 30, which his opponents plan to mark by demonstrations.

Most stocks retreated - Commercial International Bank and Orascom Telecom dipped 1.1 and 1.5% respectively.

“There is a lack of appetite - buyers are waiting for a trigger to enter the market,” said Mohamed Radwan, director of international sales at Pharos Securities.

Foreign investors were net buyers, which sometimes happens when political tensions rise in Egypt. Foreigners prioritise long-term equity valuations over day-to-day political concerns, Radwan said.

Shares in heavyweight Orascom Construction Industries bucked the downbeat trend, rising 1.7% after an extraordinary meeting of shareholders. The company said it would discuss a takeover offer by Dutch-listed subsidiary OCI NV and a tax settlement with the government.

Elsewhere, Kuwait’s index eased 0.01% to 8,075 points; Saudi Arabia’s measure ended flat at 7,526 points; Oman’s gauge declined 0.4% to 6,469 points; while Bahrain’s measure retreated 0.2% to 1,202 points.