The shares rallied 9.2 percent to 2.60 dirhams at the 2 p.m. close in Dubai, the highest level since November 2009. Arabtec advanced for a sixth day, the longest stretch of gains since April 2008. The stock has soared 64 percent so far this year and was the most traded in Dubai’s DFM General Index today. The benchmark stock index gained 0.6 percent to 1,476.24, the highest since Sept. 8.
“There is nothing that justifies such a sharp move in the share price, other than speculation about potential increases to the backlog which may not come until at least the second half of 2012,” said London-based Oliver Bell, who helps manage $2.9 billion in Middle East and Africa equities at T. Rowe Price International Inc.
Arabtec shares have surged 88 percent in the past year, compared with a 13 percent drop for Emaar Properties PJSC, developer of the world’s tallest skyscraper in Dubai. Arabtec volume today was the highest since March. Calls to Arabtec Chief Financial Officer Ziad Makhzoumi by Bloomberg News today weren’t answered.
Arabtec said in November the value of a contract it won in Saudi Arabia may rise to 1.5 billion riyals ($400 million) as it expands in the biggest Arab market. The company last month won a 25-month contract valued at 561 million dirhams ($153 million) to expand Dubai International Airport. One of its units got 256 million dirhams of contracts in Abu Dhabi last week.
The company may report a 60 percent drop in fourth-quarter profit to 22 million dirhams, according to the median estimate of three analysts on Bloomberg. Arabtec’s third-quarter profit rose to 39.1 million dirhams from 6.8 million dirhams a year earlier.
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