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DUBAI: Dubai’s Arabtec rebounded yesterday after the builder changed some of the terms of a proposed capital hike that had sent its shares tumbling, while Egypt’s index ended a five-session rally as bluechips slid.
Arabtec climbed 2.4 percent, trimming its losses to 28 percent since it announced plans for a $1.8bn capital increase that would be dilutive to shareholders.
On Tuesday, the builder received regulatory approval to issue shares in two equal tranches — one this year and another in 2014 if needed.
Arabtec also aims to issue non-convertible bonds at the end of this year or in 2014. The revised plans eased investor concerns that it would issue convertible bonds, which would have further diluted shareholders.
“The announcement had a positive impact on the shares,” says Mohammed Yasin, managing director at NBAD Securities.
“Investors are relieved by the news and it has taken some pressure off the Arabtec shares.”
Dubai’s index fell for a first session in five, dropping 0.9 percent to trim its 2013 gains to 18.5 percent.
Heavyweight Emaar Properties, which has led Dubai’s early-year rally, fell 1.4 percent.
“The markets have been going up for a very long time and they look overbought on the technical charts from a short, medium and long term perspective,” said Musa Haddad, head of investment advisory services for asset management at National Bank of Abu Dhabi.
Buyers will return as first-quarter results near, with companies expected to start reporting from mid-April, he added.
Elsewhere, Egypt’s benchmark dropped 1.6 percent to erase most of the gains from a five-session rally.
“Technical indicators still confirm the short-term trend of the market is down,” said a note from Pharos Research.
Palm Hill Development CO and Orascom Telecom fell 2.7 and 1.8 percent respectively.
In Saudi Arabia, National Medical Care Co soared on its bourse debut, underlining strong investor interest in mid-cap stocks exposed to domestic demand.
The company’s shares, which were sold in their initial public offering at 27 riyals, ended at 122 riyals in heavy trade.
The company offered 13.5 million shares or 30.1 percent of its share capital. Half were allocated to institutional investors and half to retail investors. The institutional tranche was more than five times subscribed.Reuters