Dubai World talks and contracts lift local index

Dubai's index made up for losses earliler in the week with positive news

RELATED ARTICLES: The 10 greatest engineering feats of the decade | Nakheel could pay AED 3.6bn in bonds next week | Arabtec wins DAMAC Heights contract for marina

Talk resolutions for Dubai World and three contract wins bolstered construction related companies on the Dubai Financial Markets Index yesterday, helping it regain losses from the previous seven days.

The index closed at 1,736, up from 1,724, and just 11 points shy on 27th April but still down from the 1,836 a month ago, just before the start of talks with international creditor were announced by the troubled state-owned conglomerate.

On Monday it was suggested that Nakheel, its defaulted subsidiary, could pay back AED 3.6 billion in Islamic bonds next week. An earlier statement from the government that Nakheel’s sukuk would be paid on time providing they had 'sufficient support' from the banks for their restructuring plan. Yesterday Al Bayan reported that the creditors would have two weeks to respond to the restructuring offer.

Drake & Scull International continued its rebound from a low of AED0.859 a week ago to close at AED0.884, and has just announced the launch of its MEP focused subsidiary in Oman.

The creation of Drake & Scull International Oman aims to achieve “a greater flexibility to diversify its operations and backlog” and has already snapped up two government contracts in the country worth a combined OMR 4.6 million (AED 44.2 million). The company expansion comes three weeks after its acquisition of its MEP equivalent Qatari branch.

Arabtec, winner of the recent construction contract for DAMAC Heights in Dubai Marina, also continued its gains for the week, closing at AED2.49 up from a low of AED2.33 on the 28th of last month. Union Properties, Deyaar Development and Emaar Properties made minor gains for the week, with First Dubai Real Estate Development jumping two dirhams to AED41.

Story continues below

Advertisement

FEATURED COMMENT Please click here to comment on this article

The index's parent, Dubai Financial Market, is itself the subject of market kitters following a downgrading of the stock by a Bank  of America analyst, chiefly due to low trading volumes recently. However, the overall market rise was a counterpoint to the Tadawul Stock Exchange in Riyadh, KSA. The building and construction, real estate and cement indices all continued a decline from the previous day, with only real estate index climbing for the week, up from 3,349 to 3,377 over seven days.

Saudi Cable Company, Makkah Construction & Development and Arabian Cement Company were among the losers, with Zamil Industrial Investment Company and Arabian Pipes bucking the trend, gaining 1.89% and 1.52% respectively to close at SR48.60 and SR33.50.

In Abu Dhabi the ABX index gained 0.2% from 2,773 to 2,800, with the Qatar main index declining by almost the same amount.