Arabtec shares surge amid hopes of positive news
Speculation increasing Aabar may increase stake in construction giant
Dubai's bourse outperformed a generally strong region on Tuesday as construction firm Arabtec surged on hopes for positive news from the company or one of its major shareholders.
Arabtec soared 13.6% to a one-month high of 4.86 dirhams and was among the main supports for the index, which jumped 3.4%.
Trading volume in the stock rose more than fivefold and was the second highest this year.
One of the reasons for Arabtec's surge appeared to be hopes that Abu Dhabi state fund Aabar Investments, a major shareholder in Arabtec, could raise its stake. Aabar held a board meeting on Monday, sources told Reuters, but did not disclose the results of the meeting. Aabar declined to comment.
Earlier this year Arabtec more than tripled in value to a record peak of 7.74 dirhams, but it plunged 61% in June as Aabar reduced its stake to 18.94% from 21.57%. This month, Arabtec chariman Khadem Abdulla al-Qubaisi said Aabar remained committed to the company and might increase its stake again.
Some investors may also be betting on strong second-quarter results, said Allen Sandeep, director of research at Naeem Holding. Analysts surveyed by Reuters expect Arabtec's quarterly profit, to be announced sometime in coming weeks, to jump 20%.
"I think the move that we saw today was a result of impatience by mainly retail investors," said Julian Bruce, director of Western institutional equity sales at EFG Hermes in Dubai. "There were some buyers on the sidelines who decided they should wait no longer."
Some other stocks in Dubai also rose sharply. Property developer Deyaar surged 12.2% and investment bank Shuaa Capital jumped 7.4% after Shuua said its second-quarter profit more than quadrupled.
In Abu Dhabi, the main drivers of the previous day's leg up, National Bank of Abu Dhabi and First Gulf Bank , pulled back 2.7 and 0.6% respectively.
But the index added 0.3% as telecommunications firm Etisalat rose 1.3% and Aldar Properties, the Emirate's biggest listed developer, surged 3%.
Qatar's bourse rose 0.9% on strong second-quarter results. Qatar Islamic Bank was the main support, gaining 5.4% after its second-quarter profit jumped 15%, beating analysts' expectations by a wide margin.
Qatar Insurance Co was another main driver, rising 3.8% after its quarterly profit more than doubled to 319mn riyals ($88mn), beating the estimate of QNB Financial Services, which had forecast 221.5mn riyals.
However, Qatar Electricity and Water Co slid 1.7% after its second-quarter profit fell 4.4%, in line with analysts' estimates.
Kuwait's bourse slipped 0.8% after the country's government launched a fresh crackdown on the political opposition, adopting what it called an "iron fist" policy.
It threatened, according to state news agency KUNA, to revoke the citizenship of Kuwaitis suspected of trying to undermine stability.
Also, shares in Kuwait's Agility, the largest logistics firm in the Middle East, dropped 3.7% after being diluted through a 5% bonus share issue on Monday.