Dubai bounces back as Arabtec halts freefall

 26 Jun 2014 - 0:50


DUBAI: Dubai’s stock index rebounded strongly yesterday from a plunge in the last session as Arabtec, which continued to dominate trading, turned around and other stocks recovered from a string of margin calls. The Dubai index jumped 6.1 percent in active trade with blue chip Emaar Properties, the top property developer, up 7.1 percent.
Shares in construction firm Arabtec, which had tumbled their 10 percent limit for three sessions in a row, rose 5.1 percent after the company’s chairman pledged it would keep expanding, despite recent management turmoil.
The statement did not clarify key questions over Arabtec’s relationship with major shareholder Aabar, or what might happen to the 28.85 percent stake in Arabtec owned by former CEO Hasan Ismaik. But Arabtec shares are now so low that they may be attractive on a fair-value basis. The Dubai benchmark dropped 6.7 percent on Tuesday, its worst daily performance in 10 months, as Arabtec’s plunge triggered a chain reaction of margin calls, knocking down the prices of most stocks in the emirate. This opened up buying opportunities yesterday.
Abu Dhabi’s bourse, which had also suffered from the soll-off triggered by Arabtec, gained 1.9 percent. Other Gulf markets were mixed on low-to-medium volumes ahead of Ramadan. Reuters