Stock News: Arabtec Drags Down UAE, Saudi Earnings Disappoint
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Stock News: Arabtec Drags Down UAE, Saudi Earnings Disappoint

Stock News: Arabtec Drags Down UAE, Saudi Earnings Disappoint

Arabtec tumbled its daily 10 per cent limit, dragging down the entire Dubai stock market to close six per cent lower.

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Saudi Arabia’s bourse edged down on Sunday after several companies disappointed investors with their second-quarter results, while Dubai’s Arabtec triggered a sell-off across the United Arab Emirates.

Saudi Arabia’s main index slid 0.6 per cent in early trade, dragged down mostly by three companies that reported their quarterly earnings before the opening: Saudi Industrial Investment Group (SIIG), Dar Al Arkan and Saudi Basic Industries (SABIC).

SIIG tumbled 7.2 per cent after its second-quarter profit missed the estimate of SICO Investment Bank by a third.

Dar Al Arkan fell 3.7 per cent, having reported a 17 per cent rise in second-quarter net income to SAR121.3 million ($32.3 million). Six analysts polled by Reuters had forecast, on average, that it would record a net profit of SAR209.8 million.

SABIC slipped 0.7 per cent after reporting a seven per cent rise in second-quarter net income, in line with estimates.

In Dubai, builder Arabtec plunged and triggered a wide sell-off after Aabar Investments, one of its major shareholders, did not confirm a report which said Aabar was in talks to increase its stake.

Arabtec tumbled its daily 10 per cent limit, dragging down the entire Dubai stock market, where the main index closed six per cent lower.

“It is Arabtec which is affecting the market,” said Shakeel Sarwar, head of asset management at Securities and Investment Co in Bahrain.

“This is crazy volatility…The main issue is that the market does not have depth, it’s totally at the mercy of retail investors and speculators.”

Arabtec jumped last week on speculation that Aabar would raise its stake from the current 18.94 per cent. The bourse suspended the stock on Thursday after Bloomberg reported that Aabar was in talks to buy at least part of the 28.85 per cent stake owned by Arabtec’s former chief executive Hasan Ismaik, who abruptly resigned last month.

But Aabar issued a statement on Sunday that did not confirm or deny the report, saying it was studying different options for its stake and that any talks on a deal would remain confidential. Disappointed retail investors dumped Arabtec as it resumed trading, along with other stocks.

Developers Union Properties and Deyaar, and contractor Drake and Scull, also closed limit-down. Bourse operator Dubai Financial Market fell 8.9 per cent after it announced it had more than tripled its second-quarter net profit.

The sell-off also hit property stocks in Abu Dhabi. The emirate’s biggest developer, Aldar Properties, plunged its 10 per cent limit, as did RAK Properties and Eshraq Properties. Abu Dhabi’s index closed 2.4 per cent lower.


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