Jan. 24 (Bloomberg) -- Aldar Properties PJSC led gains in Abu Dhabi real estate stocks on investor bets the company may benefit from a spending plan that includes the expansion of the emirate’s airport and the construction of homes.
The shares of Aldar, Abu Dhabi’s biggest developer, soared 6 percent to 89 fils, the highest since Jan. 8, at the 2 p.m. close. Sorouh Real Estate PJSC climbed 5.3 percent to 79 fils, the highest since Jan. 5. The stocks had the second and third- biggest percentage gains on Abu Dhabi’s benchmark. Gulf Cement Co. PSC, the United Arab Emirates-based producer of the building material, led the rally. Abu Dhabi’s ADX General Index rose 0.4 percent to 2,361.55, the highest since Jan. 11.
Abu Dhabi, the oil-rich emirate that’s transforming itself into a business and cultural hub, plans to resume suspended projects including branches of the Louvre and Guggenheim museums after reviewing their viability, the government said late yesterday. The ADX Real Estate Index, down 54 percent in 2011, rose 5.2 percent to the highest since Jan. 4.
“Although schedules, budgets and contractors have yet to be announced, speculative buyers are active on the assumption that companies such as Aldar and Sorouh would be front line beneficiaries of any contract awards,” said Julian Bruce, Dubai-based equity sales head at EFG-Hermes Holding SAE.
The executive council approved the building of 13,150 homes for U.A.E. citizens in North Al Wathba, the country’s official WAM news agency reported. Another 7,608 villas are expected to be completed this year and delivered to the government. The council also approved the building of schools, hospitals and two roads, WAM reported.
Developers in Abu Dhabi and the neighboring emirate Dubai are struggling to pay off debt after property prices fell by more than half from the market’s peak in 2008.
Aldar shares have dropped 3.3 percent this month, extending last year’s 60 percent slump. The company obtained 16.8 billion dirhams ($4.6 billion) from Abu Dhabi’s government by selling assets in December. Sorouh tumbled 48 percent last year and has fallen 7.1 percent in January.
Sorouh may post a fourth-quarter profit of 124 million dirhams on Feb. 1 after a loss the year earlier, according to the median estimate of four analysts on Bloomberg. The stock was rated “buy” in new coverage last week at Beltone Financial, which cited the company’s earnings and financial position.
--Editors: Claudia Maedler, Susan Lerner
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