Aug. 12 (Bloomberg) -- Aldar Properties PJSC had the biggest two-day drop since June as Abu Dhabi’s largest developer reported a drop in revenue and after the stock surged in July.
The shares fell 2.1 percent to 2.75 dirhams at the close in Abu Dhabi today, bringing the two-day retreat to 4.2 percent, the worst since June 24. Aldar surged 24 percent last month, almost three times as fast as Abu Dhabi’s benchmark index, which lost 0.6 percent today.
Aldar had a one-time gain of 2.6 billion dirhams ($708 million) from its merger with Sorouh Real Estate Co. as it posted second-quarter earnings on Aug. 7, the first day markets in the United Arab Emirates closed for an Islamic holiday. The company said revenue dropped 73 percent to 1.26 billion dirhams.
“It’s a realistic correction based on people realizing that 2.6 billion dirhams of profits came from the revaluation of assets post-merger with Sorouh and won’t be a recurring item.” Mohammed Ali Yasin, managing editor of Abu Dhabi Financial Service Co., said by phone.
Abu Dhabi’s government backed the combination of the two developers, which are both part of the state’s drive to diversify its oil-based economy through office and leisure projects. Aldar received more than $9.8 billion in bailouts from the government in 2011.
One analyst recommends investors sell the shares, while five say hold and two advise buying the stock, according to data compiled by Bloomberg.
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