July 28 (Bloomberg) -- Arabtec Holding PJSC fell the most in more than a month after the biggest publicly traded construction company in the United Arab Emirates sold new shares at a discount.
The stock dropped 3.1 percent, the most since June 24, to 2.18 dirhams at 12:47 p.m. in Dubai as volume climbed to 52 million shares, or 1.8 times the three-month daily average, according to data compiled by Bloomberg. Arabtec was the biggest decliner on the benchmark DFM General Index, which decreased 0.2 percent, trimming this month’s advance to 13 percent.
Dubai-based Arabtec raised 2.4 billion dirhams ($653 million) by selling 1.56 billion new shares at 1.5 dirhams each in a rights issue, according to an e-mailed statement yesterday. Proceeds from the offering, which was 30 percent oversubscribed, will be used to fund an expansion plan announced this year, the company said. Arabtec is winning new building contracts as the U.A.E. economy recovers following a property-market crash.
“Normally when something is trading at 2.25 dirhams and everyone gets given shares from a rights issue at 1.50, you’d expect a bit of a sell-off,” Julian Bruce, head of institutional trading at EFG-Hermes Holding SAE, said in an e-mailed note to clients today. “I wouldn’t expect the pullback to be too extended.”
Arabtec this year secured contracts to build the Abu Dhabi branch of the Louvre, an airport terminal in the U.A.E. capital and a 243 million-dirham deal from Emaar Properties PJSC. The company’s shares have climbed 17 percent this year, underperforming a rally of 55 percent for the DFM, the world’s best-performing gauge after Ghana’s index among 93 benchmarks tracked by Bloomberg.
To contact the reporter on this story: Arif Sharif in Dubai at email@example.com
To contact the editor responsible for this story: Claudia Maedler at firstname.lastname@example.org