Feb. 8 (Bloomberg) -- Arabtec Holding Co., the United Arab Emirates’ biggest construction company, fell the most in more than three weeks on speculation a seven-day rally was overdone.
The shares declined 1.5 percent, the most since Jan. 16, to 2.66 dirhams at the 2 p.m. close in Dubai. The stock had soared 44 percent in the seven days through yesterday, bringing its gain this year to 67 percent. Arabtec was the most-traded stock and second-biggest decliner on Dubai’s DFM General Index, which rose 0.6 percent.
“With no official news from the company’s management or the market regulator on the reason for Arabtec’s share price, we expect a correction to take place,” said Tariq Qaqish, deputy head of asset management at Dubai-based Al Mal Capital.
Arabtec climbed to a more than two-year high yesterday, with the stock accounting for more than half the value of shares traded in Dubai, on speculation the company may gain from infrastructure spending in the Middle East. Chief Financial Officer Ziad Makhzoumi declined to comment on the share-price move when contacted by Bloomberg News yesterday.
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 contract valued at 561 million dirhams ($153 million) to expand the Dubai International Airport. One of its units got 256 million dirhams of contracts in Abu Dhabi last week.
Arabtec may report a 60 percent drop in fourth-quarter profit to 22 million dirhams, according to the median estimate of three analysts compiled by Bloomberg.
Arabtec’s 14-day relative strength index rose above 70 on Jan. 24 and reached 89.46 today. A reading above 70 indicates to some investors that the stock may retreat.
To contact the reporter on this story: Zahra Hankir in Dubai at firstname.lastname@example.org
To contact the editor responsible for this story: Claudia Maedler at email@example.com