June 17 (Bloomberg) -- Arabtec Holding Co. advanced for the first time this week, leading a gain in Dubai’s index, as investors sought to benefit from the stock’s worst two-day decline since October 2008.
Shares in the United Arab Emirates’ largest listed builder climbed 4.2 percent to 4.22 dirhams at the close in the emirate. Arabtec dropped 19 percent in the first two trading days of this week, cutting its price-to-earnings ratio yesterday to the lowest since March, amid rumors its second-biggest investor planned to cut its stake. The DFM General Index climbed 0.6 percent to 4,495.24 after two days of declines.
“The positive move in the stock points to speculators’ attempts to quench their thirst for the shares,” Ahmed Shehada, head of advisory at NBAD Securities LLC, said by e-mail. “Arabtec’s speculative moves have affected the market, both on the rally and on the sell-off. If Arabtec sees a continuous positive move, it will undoubtedly take the market with it.”
The company’s shares had the worst weekly drop since March 2012 after the U.A.E.’s central bank on June 8 pointed to signs the real estate market may be overheating. The Dubai Financial Market website on June 15 showed Abu Dhabi-controlled Aabar Investments PJSC had reduced its holding in the company to 14.32 percent from 18.85 percent. The website later updated the stake to 18.94 percent and blamed a “glitch” for the error. Aabar last week cut its ownership from 21.57 percent.
Arabtec’s Chief Executive Officer Hasan Ismaik told Al Arabiya Television yesterday there are no disputes with Aabar’s management, and he has no plans to further raise his stake in the construction company. Ismaik tripled his holding in Arabtec to 28.84 percent this year, data compiled by Bloomberg show.
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