February 13, 2017 / 1:43 PM / in 10 months

MIDEAST STOCKS-Arabtec drags down Dubai index, local sugar revival boosts Egypt food makers

* Arabtec tanks by daily limit on massive Q4 net loss

* Gulf Navigation drops despite stronger net profit

* Abu Dhabi’s Eshraq Properties slumps after swinging to net loss

* Saudi’s Alhokair up on appointment of new chief executive

* Egypt’s Juhayna, Domty up on news of new local sugar facility

By Celine Aswad

DUBAI, Feb 13 (Reuters) - A slump in shares of Dubai’s Arabtec dragged Dubai’s stock market lower on Monday after the builder reported a larger fourth-quarter net loss, while other markets were mixed.

Dubai’s index dropped 1.8 percent, its largest single-day decline since October 2015, after Arabtec plummeted by its 10 percent daily limit having reported a net loss of 2.95 billion dirhams ($803 million) in the three months to Dec. 31.

The loss was far larger than the loss of 272.8 million dirhams forecast by EFG Hermes and the loss 403.74 million a year earlier.

Arabtec also said its board approved a proposed capital restructuring and a 1.5 billion dirhams rights issue, pending investor consent at the next general shareholders’ meeting.

Mohammed Ali Yasin, managing director of brokerage at NBAD Securities, told Reuters he believed the loss reflected measures taken across government-related entities.

“This deceleration is the result of the due diligence between IPIC and Mubadala. They looked at the Abbar subsidiaries, which Arabtec is a part of, and they forced them to take the true provisions and impairments to start on a clean slate,” said Yasin.

In January Abu Dhabi’s government merged two of its top investment funds Mubadala Development Co and International Petroleum Investment Co (IPIC) to create Mubadala Investment Co, to strengthen their financial clout in an era of low oil prices.

Elsewhere commodities shipper Gulf Navigation fell 3.6 percent despite reporting a 20 percent rise in fourth-quarter net profit, according to Reuters calculations. Full-year net income came in at 136.6 million dirhams, almost six times the figure for 2015.

In neighbouring Abu Dhabi the stock index edged down 0.1 percent, with Eshraq Properties dropping by its 10 percent daily limit after it swung to a full-year net loss of 575 million dirhams in 2016, versus a net profit of 1.61 million in 2015.

The mid-sized developer said it had booked an impairment of 593 million dirhams on land values in 2016.

Dana Gas, which reported a drop in earnings last week, fell 7.8 percent.

SAUDI, EGYPT

Saudi Arabia’s index added 0.5 percent in thin trade with advancing shares outnumbering decliners 95 to 52.

Most mid-sized petrochemical producers were bid up, as Brent futures traded around $56.50 a barrel. Saudi Industrial Investment Group climbed 2.9 percent.

Apparel retailer and mall operator Fawaz Alhokair added 4.1 percent on announcing the appointment of a new chief executive, Atul Singh, effective April 1.

Shares in Saudi Airlines Catering rose 2.3 percent after it signed a 44 million riyals ($11.7 million) contract with Saudi Airlines to construct and manage the first-class lounge at Cairo International Airport. The contract is for five years and the positive impact of the deal will be reflected in the second quarter of 2017.

Egypt’s main index fell 1.4 percent with 80 percent of the most-traded shares retreating. Investment bank EFG Hermes fell 2.6 percent.

Shares of food producers outperformed on news that they will benefit from sourcing sugar locally. Egypt’s Al Nouran sugar production facility is due to start operations in May. The facility will be the largest beet sugar production line in Egypt at 14,000 tonnes a day capacity.

Arabian Food Industries (Domty), maker of sweet drinks, surged 8.5 percent and Juhayna Food Industries , maker of yoghurts, rose 2.7 percent.

Sugar had become scarce in Egypt in recent months and the government took control of stocks to counter what it said was an epidemic of hoarding by merchants reacting to rising prices amid a shortage of foreign currency.

MONDAY‘S HIGHLIGHTS

SAUDI ARABIA

* The index rose 0.5 percent to 7,060 points.

DUBAI

* The index dropped 1.8 percent to 3,638 points.

ABU DHABI

* The index edged down 0.1 percent to 4,564 points.

QATAR

* The index gained 0.1 percent to 10,671 points.

EGYPT

* The index lost 1.4 percent to 12,740 points.

KUWAIT

* The index added 0.3 percent to 6,657 points.

OMAN

* The index edged down 0.06 percent to 5,815 points.

BAHRAIN

* The index inched down 0.1 percent to 1,308 points.

Editing by Andrew Torchia and David Holmes

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