Abu Dhabi Shares Headed for Biggest Gain in a Week on Earnings
February 10, 2012, 2:19 AM ESTBy Zahra Hankir
Feb. 9 (Bloomberg) -- Abu Dhabi shares headed for the biggest gain in a week amid speculation earnings at the emirate’s biggest real-estate companies will improve and they will benefit from infrastructure spending plans.
Aldar Properties PJSC, Abu Dhabi’s biggest property developer, rose for a third day this week. Sorouh Real Estate, the emirate’s second-largest developer, rallied 3.4 percent. Abu Dhabi’s ADX General Index rose 0.3 percent, poised for the biggest gain since Feb. 2, to 2,471.01 at 12 p.m. in the emirate, trimming this week’s drop to 0.2 percent. The Bloomberg GCC 200 Index fell 0.1 percent.
“Sentiment for real estate stocks has improved slightly as soon to be announced earnings are expected to be substantially better for both Aldar and Sorouh,” said Ziad Dabbas, a financial analyst at National Bank of Abu Dhabi PJSC, the United Arab Emirates’ second-biggest bank by assets. “That said, volumes remain very weak in Abu Dhabi.”
Aldar, which obtained 16.8 billion dirhams ($4.6 billion) from Abu Dhabi’s government by selling assets in December, may post a 2011 profit of 494 million dirhams after a loss of 2.4 billion dirhams a year earlier, according to the mean estimate of eight analysts on Bloomberg. Sorouh may next week post a full-year profit that almost tripled to 379 million dirhams, according to the mean estimate of six analysts on Bloomberg. Aldar shares rose 1.1 percent to 95 fils. Sorouh gained to 92 fils, headed for the highest close since Dec. 11.
Property Prices
About 53 million shares traded in Abu Dhabi today, compared with a 12-month daily average of about 62 million shares.
Abu Dhabi, the oil-rich emirate transforming itself into a business and cultural hub, plans to resume projects including branches of the Louvre and Guggenheim museums after reviewing their viability, the government said in January.
“The executive council decision has helped build momentum in Abu Dhabi’s real estate stocks, though some macro issues still remain in the sector,” said Sebastien Henin, who helps oversee $100 million at The National Investor in Abu Dhabi.
Real-estate values have fallen more than 60 percent in Dubai and 45 percent in Abu Dhabi from 2008 peaks after the global credit crisis caused banks to curtail lending and speculators left the market. Developers completing contracts are supplying thousands of homes and offices at a time when demand is dropping.
In Dubai, Arabtec Holding Co., the U.A.E.’s biggest construction company, rallied 4.5 percent to 2.78 dirhams, headed for the highest close since October 2009. The stock is up 74 percent this year amid speculation the company will benefit from regional infrastructure spending.
Dubai’s DFM General Index advanced 0.3 percent. Oman’s benchmark stock index and Kuwait’s gauge rose 0.1 percent, while Qatar’s QE Index was little changed. Bahrain’s measure fell less than 0.1 percent. Saudi Arabia’s market is closed for the weekend.
--Editors: Shanthy Nambiar, Peter Branton
To contact the reporter on this story: Zahra Hankir in Dubai at zhankir@bloomberg.net
To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net
