Bloomberg News

Dubai Shares Drop as Arabtec Falls on Concern Gain Is Overdone

December 20, 2011

Dec. 20 (Bloomberg) -- Dubai shares dropped to the lowest level in three weeks, led by Arabtec Holding Co. amid investor speculation that this month’s gain for the United Arab Emirates’ biggest construction company may have been overdone.

Arabtec tumbled the most since Aug. 7. Emirates NBD PJSC, the country’s biggest bank by assets, declined the most since Nov. 1. The benchmark DFM General Index retreated 1 percent to 1,360.80, the lowest since Nov. 27, at the 2 p.m. close in the emirate. The measure has retreated 17 percent this year. The Bloomberg GCC 200 Index, which tracks the biggest 200 companies in the region, gained 0.1 percent. Abu Dhabi’s ADX General Index fell 0.8 percent.

“Profit taking on Arabtec by the end of the session brought the index down,” said Samer Darwiche, an analyst at Gulfmena Investments in Dubai.

Arabtec has surged 13 percent this month compared with a decline of 1.3 percent for Dubai’s benchmark index. The shares trade at about 13 times estimated earnings, while Emaar Properties PJSC, the developer of the world’s tallest tower, is valued at 8.4 times. Arabtec said Nov. 30 that the value of a contract it won in Saudi Arabia may rise to 1.5 billion riyals ($400 million) as it expands in the biggest Arab market.

The shares tumbled 5.2 percent to 1.65 dirhams as about 29.5 million were traded, the highest volume on Dubai’s index, according to data compiled by Bloomberg.

“Arabtec has been outperforming aggressively lately so this correction is very expected, and is even softer than the rally,” said Chahir Hosni, equity sales manager at EFG-Hermes Holding SAE in Dubai.

Emirates NBD lost 4.1 percent to 3.05 dirhams. The bank had its price-estimate cut by HC Brokerage on Dec. 18, citing rising loan-loss charges and a possible acquisition of mortgage lender Amlak Finance PJSC.

Kuwait’s benchmark gained 0.2 percent and Qatar’s QE Index advanced 0.4 percent, while Bahrain’s BB All Share Index dropped 1.3 percent. Oman’s MSM30 Index fell 0.7 percent. Saudi Arabia’s Tadawul All Share Index rose 0.2 percent.

--Editors: Claudia Maedler, Linda Shen

To contact the reporter on this story: Alaa Shahine in Dubai at

To contact the editor responsible for this story: Claudia Maedler at

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