Bloomberg News

Drake Gains Most in 7 Weeks as Drop Seen Overdone: Dubai Mover

November 20, 2012

Drake & Scull Intentional PJSC, (DSI) a supplier of engineering services to the construction industry, gained the most in more than seven weeks on bets this week’s drop was overdone.

Shares climbed 1.5 percent, the most since Oct. 1, to 72.9 fils at the close in Dubai. It was the most traded on the benchmark DFM General Index (DFMGI), which rose 0.8 percent. The stock had plunged more than 9 percent in the past two days after third-quarter profit slumped 93 percent.

“One quarter is not enough to judge the performance of the company, though results came way below estimates,” said Talal Touqan, head of research at Al Ramz Securities LLC in Abu Dhabi.

Net income dropped to 3.92 million dirhams ($1.1 million), reflecting a slowdown in the construction industry. The median estimate of four analysts was for a profit of 37.8 million dirhams, according to data compiled by Bloomberg.

Drake & Scull’s 14-day relative strength index has fallen to 23. A reading below 30 indicates to some analysts that a security is poised to gain. The shares have lost 3 percent this year, compared with an 18 percent gain for the benchmark index.

Four analysts have a buy rating on the stock, eight recommend hold while one says sell, according to data compiled by Bloomberg.

To contact the reporter on this story: Alaa Shahine in Dubai at asalha@bloomberg.net

To contact the editor responsible for this story: Shaji Mathew at shajimathew@bloomberg.net


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