Arabtec Rises Most in 4 Months After Aabar Buys Palm Hills Stake

Arabtec Holding Co. jumped the most since July on speculation it may get more deals in Egypt after its second-bigger shareholder bought a stake in a Cairo-based luxury real estate developer.

The United Arab Emirates’ biggest publicly traded construction company rose 8.8 percent, the biggest increase since July 15, to 4.21 dirhams at the close in Dubai, helping to lift the emirate’s DFM General Index 2.8 percent, the most in three weeks. Trading on Arabtec’s shares was about 1.7-times the three-month daily average.

Aabar Investments PJSC, which holds almost 19 percent of Arabtec, bought a 5.1 percent stake in Palm Hills Developments SAE. Both Aabar and Arabtec share a chairman, Khadem Al Qubaisi. Arabtec is already in talks to start building one million homes in Egypt, Al Qubaisi said last month.

“Investors could be anticipating that Arabtec will be getting a sizeable contract” from Aabar after its deal with Palm Hills, Ramez Merhi, director for asset management at Al Masah Capital Ltd., said by e-mail. It also “seems like Aabar and Ismaik are negotiating again with regards to Ismaik’s stake sale,” he said.

Former Arabtec Chief Executive Officer Hasan Ismaik said in August he rejected an offer from Aabar to buy part of his 27.9 percent stake in the company.

Al Qubaisi said July 2 that Aabar may raise its stake in Arabtec. The builder was at the center of a selloff in June that wiped more than 20 percent off the value of the benchmark index, triggered by senior management changes and investor concern the company may be losing Abu Dhabi-government backing.

MSCI Weightings

Meanwhile Emaar Properties PJSC, the stock with the biggest weighting on Dubai’s benchmark, rose 3.5 percent to 10.40 dirhams, taking its two-day gain to 5.6 percent.

Index provider MSCI Inc., whose gauges are tracked by investors managing about $9 trillion in assets, last week named Emaar among stocks from the U.A.E. and Qatar whose weightings will be adjusted on its emerging markets gauge, according to a note from EFG-Hermes U.A.E. Ltd. yesterday.

“Foreign investors are back to work allocating funds ahead of Nov. 25, when MSCI’s recent changes will take effect,” Ahmed Shehada, head of advisory and institutions at NBAD Securities LLC in Abu Dhabi, said by e-mail.

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