- More than 100 million Arabtec shares exchanged on Monday
- Dubai investors `desperate for good news': NBAD Securities
Traders exchanged more Dubai shares on Monday than in the past two months after Arabtec Holding Co.’s chairman said the company is still in talks with the Egyptian government to build homes in the North African nation.
Mohamed Al Rumaithi said the largest construction company in the United Arab Emirates sent a proposal to build 13,000 units as the first stage of a plan to build hundreds of thousands of homes in Egypt. It’s the latest in a string of announcements from Arabtec and the Egyptian government since they first unveiled the 1 million-housing project in March 2014. Discussions between the two sides have started and stopped numerous times in the past 20 months.
Still, Arabtec jumped the most in almost three months after more than 100 million shares changed hands, more than a quarter of those traded on the DFM General Index on Monday. The volume of stocks bought and sold on Dubai’s index climbed to the highest since Aug. 30.
"There’s a desperation for good news," said Ahmed Shehada, the Dubai-based executive director for advisory and institutions at NBAD Securities LLC. "Nothing changed with Arabtec, but it’s a gust of wind in the right direction. The chairman’s comment on continuation of discussions on the Egypt project gave investors sufficient reason to start buying."
The announcement came less than a week after Arabtec reported its biggest-quarterly loss on record and as trading volumes in Dubai languished. Not only has the more than 40 percent decline in Brent crude prices over the past year led to project delays and deferred payments, it has also reduced government revenue across the six-nation Gulf Cooperation Council. Public spending in the region, home to about 30 percent of the world’s proven oil reserves, is a main driver of economic growth.
The volume of shares traded on Dubai’s benchmark gauge on Monday was about 30 percent more than the 12-month daily average. Property-related companies were the biggest contributors to the index’s 0.9 percent increase. Arabtec rose 8.4 percent, Dubai Investments PJSC increased 3.6 percent and Union Properties PJSC advanced 6 percent.