Bloomberg News

Dubai Shares Rise to 1-Month High as Aabar Boosts Arabtec Stake

April 03, 2012

Dubai’s stocks advanced to the highest in almost a month led by Arabtec Holding Co. (ARTC) after Abu Dhabi’s Aabar Investments PJSC (AABAR) raised its ownership in the Dubai builder to 10.45 percent.

Arabtec, the United Arab Emirates’ biggest construction company, surged 15 percent, the biggest increase in more than three years. Emaar Properties PJSC (EMAAR), developer of the world’s tallest tower, rallied to the highest since June. The DFM General Index (DFMGI) jumped 2.4 percent to 1,693.67, the highest since March 5, at the 2 p.m. close in Dubai.

Aabar Real Estate now owns 5.13 percent of Arabtec, according to data posted on Dubai’s stock exchange. Aabar Petroleum Investments Co., which in 2008 sold its energy assets to state-owned Mubadala Development Co., holds 5.32 percent up from 5.28 percent last month, the data show.

“The interest of Aabar in Arabtec is now obvious as it increased its share through Aabar subsidiaries,” said Nabil Farhat, a partner at Abu Dhabi-based Al Fajer Securities. “The combination of available capital and technical resources will eventually make Arabtec a winner in the real-estate market on the local and the international level.”

Arabtec Rally

Arabtec has surged 117 percent this year on speculation investors are accumulating the stock amid bets it will benefit from regional infrastructure spending. That compares with a 25 percent gain for Dubai’s benchmark index. Abu Dhabi, home to about 7 percent of the world’s proven oil reserves, is trying to diversify away from crude.

Aabar, which owns stakes in Daimler AG (DAI) and UniCredit SpA (UCG), canceled in 2010 a plan to buy most of Arabtec for an estimated $1.74 billion. It had offered to buy 70 percent of Arabtec through the purchase of bonds that would be exchanged for shares at 2.3 dirhams.

Arabtec shares rallied the most since October 2008 to 3.45 dirhams today. A unit of Arabtec won in January a 25-month contract valued at 561 million dirhams ($153 million) for expansion works at Dubai International Airport. One of its units this year also won contracts in Abu Dhabi valued at 256 million dirhams.

Emaar gained 3.6 percent to 3.18 dirhams, the highest close since June 21.

Saudi Arabia’s Tadawul All Share Index (SASEIDX) advanced 0.3 percent in its fifth day of gains, Oman’s MSM 30 Index (MSM30) rose 0.3 percent and Abu Dhabi’s ADX General Index (ADSMI) increased 0.1 percent. Qatar’s QE Index (DSM) and Kuwaiti (KWSEIDX) gauge slipped 0.2 percent, while Bahrain’s BB All Share Index (BHSEASI) fell 0.1 percent. The Bloomberg GCC 200 Index (BGCC200) was little changed.

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


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