DUBAI Feb 28 Shares in Dubai's Arabtec
tumbled on Thursday to a six-week low on fears of a
significant shares dilution after company plans of raising $1.8
billion in capital.
Gulf markets were mixed, while Egypt's measure extended
Arabtec will issue 3.2 billion shares at 1.5 dirhams per
share, a near 50 percent discount to its current market price.
The capital hike amounts to a more than 50 percent increase in
its market capitalisation.
It's shares slumped 9.8 percent to 2.67 dirhams, its lowest
close since January 16. Trading was thin as the stock hit its
maximum permitted daily decline early in the day - allowing no
further sell orders to be processed.
"Potential support of the 200 daily exponential moving
average is around 2.63 dirhams, which coordinates nicely with
the 50 percent retracement at 2.625 of the uptrend begun at the
beginning of this year," said Bruce Powers, a technical analyst
and corporate advisor at Orpheus Capital.
"Given the significant move down today it wouldn't be
surprising to see Arabtec drop below this potential support
The contractor also replaced its chief executive as part of
a shake-up driven by Abu Dhabi state investment fund Aabar, its
largest shareholder, that is tightening its grip on the firm.
On Nasdaq Dubai, shares of Depa surged 11.4
percent after Cario-based EFG-Hermes said Arabtec is likely to
use funds from the capital hike to take over the interiors
Arabtec, which acquired a 23.4 percent stake in Depa in Nov
last year, will purchase the remaining 465 million shares in
Depa that it does not currently own, analysts Jan Pawel Hasman
and Shaza El Kady said in the note.
Dubai's benchmark shed 0.6 percent, continuing its
sideways trading as it struggles to break through the 2,000 key
Elsewhere, Cairo's measure fell 0.5 percent, down
for its fifth consecutive losing session as weak earnings
weighed on sentiment already downbeat on political concerns
ahead of parliamentary elections.
Ezz Steel slipped 0.8 percent after the country's
largest steel producer swung to a loss in the third
Egypt Kuwait Holding fell 4.2 percent, extending
declines after the company reported a 47 percent drop in 2012
profit from a year ago.
Meanwhile, Kuwait measure climbed 0.3 percent to
its highest close since May 2012.
Kuwait is up 8.9 percent year-to-date but recovering from an
eight year trough it hit in November last year.
"We continue to be somewhat optimistic for the coming period
of time in light of two primary factors - the anticipated
favorable announcements and financial disclosures for many of
the listed companies that have not yet announced and more
importantly for the long over-due government mega projects
announcements," said Fouad Darwish, head of brokerage at Global
Hopes of progress on development spending are driving
optimism in the market amid a benign political backdrop. The
Kuwaiti opposition boycotted the last elections and so cabinet
members are seen as pro-government. Investors have been waiting
for development projects to be announced and a fraction of these
are beginning to trickle through.
Kuwait said on Thursday it plans to choose a winning bid in
the first quarter of this year for a 900 million dinars ($3.2
billion) new airport, a key project in the country's economic
* The index slipped 0.6 percent to 1,927 points.
* The index declined 0.4 percent to 3,045 points.
* The index retreated 0.5 percent to 5,489 points.
* The index gained 0.4 percent to 8,529 points.
* The index climbed 0.3 percent to 6,463 points.
The index slipped 0.1 percent to 5,976 points.
* The index declined 0.7 percent at 1,090 points.