Dubai Investments PJSC fell the most in more than three months, leading a drop in Dubai’s benchmark stock index, after the company with stakes in more than 40 businesses said second-quarter profit fell 54 percent.
The shares slumped 4.7 percent, the most since May 2, to 73.7 fils at the close in Dubai. The stock led the DFM General Index 1 percent lower to 1,559.06 and was the seventh most-traded on the gauge. The company yesterday said quarterly profit declined to 63.4 million dirhams ($17.3 million) as revenue from contracts dropped.
“The only improvement comes from rental income and revaluation of investments, mainly real estate,” said Talal Touqan, Abu Dhabi-based head of research at Al Ramz Securities. The “conglomerate is still suffering from income generated from other businesses” such as industries and financial investments.
The United Arab Emirates’ housing market is stabilizing after the collapse in prices. Dubai Investments’ earnings declined as the sheikhdom’s real-estate market crashed in the wake of the 2008 global credit crisis, sending home prices plunging more than 65 percent from a peak that year.
Economic growth in the emirate, which relies on hospitality and trade for more than 33 percent of gross domestic product, is forecast to expand as much as 5 percent this year, according to the government.
Dubai Investments is targeting exits “from selected investments” to help boost profitability, chief executive officer Khalid Bin Kalban said yesterday. The company also holds interests in dairy farms, publishers and manufacturers of glass, pharmaceuticals, vegetable oils, building materials, and aluminum extrusions.