Property News · March 2, 2016

Arabtec shares plunge 20 per cent as rally comes to dramatic end



Arabtec plummeted 20 per cent in the final 90 minutes of trading, bringing the stock’s dramatic three-day rally to an abrupt end.EFG Hermes downgraded Arabtec to ‘sell’ from ‘hold’, arguing that the construction firm’s fundamentals did not justify recent rises in their share prices.The bank argued that the rally in Arabtec shares, which had increased in value by more than 50 per cent since Sunday, was driven purely by rumours that former chief executive Hasan Ismaik will continue to accumulate stock.
“With the exception of Arabtec and Drake & Scull International (DSI), stocks within our Mena contractors’ coverage have underperformed their corresponding general index,” the bank said in a research note published yesterday morning.”We believe both [Arabtec and DSI] will follow suit, as the market over-excitement fades away, thus we have sell ratings on both names.”Mr Ismaik exited Arabtec abruptly in July 2014, subsequently trimming his stake in the company to 11.81 per cent. Mr Ismaik’s decision to increase his stake to 11.91 per cent this week fuelled a boom in the stock among local investors.
Arabtec looked to be on course for another day of double digit gains, rising 13 per cent by lunch time.However, a rush of sell orders during the final ninety minutes of trading saw the stock shed 9 per cent at Dh1.50.”We’ve seen a crescendo of buying in the past days based on nothing more the hope that Hasan Ismaik may resume active trading in the name, rather than any fundamental change in the company,” said Sanyalak Manibhandu, the head of research at NBAD Securities in Abu Dhabi.
“As the end of the week approaches, when there’s no news, it just takes one or two people closing their positions and taking some profit to reverse the stampede.”Arabtec’s reversal of fortune sparked a sell off of other big names on Dubai’s bourse. Amlak Finance was amongst the hardest hit, closing down 9.77 per cent at Dh1.57, while index bellwether Emaar Properties ended the day off 1.88 per cent at Dh5.75.
The Dubai Financial Market General Index finished the day down 1.86 per cent at 3,225.78.Shares in the capital ended the day up 0.16 per cent at 4,379.63, thanks to gains from FGB and Aldar Properties. jeverington@thenational.aeFollow The National’s Business section on Twitter

Source : thenational.ae
Read more…Arabtec shares plunge 20 per cent as rally comes to dramatic end

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