Shares to watch: Emaar, Arabtec may lift Dubai

Developer Emaar Properties and builder Arabtec may support Dubai’s bourse on Tuesday after positive news, while Saudi Arabia’s market is vulnerable to further profit-taking.

Emaar said late on Monday that institutional investors had committed to buying all the shares offered to them in the flotation of its shopping malls business, only a day after the initial public offer was launched.

Dubai’s largest property developer plans to raise as much as Dh5.8b ($1.58b) from the offer of shares in Emaar Malls Group (EMG), which is expected to be the Gulf’s biggest stock sale since 2008.

Meanwhile, shares in Arabtec jumped 3.7 per cent to Dh4.77 on Monday following an Al Arabiya television report that its former chief executive Hasan Ismaik had agreed to sell half of his 27.90 per cent stake in the firm to Abu Dhabi state fund Aabar Investments at a price of between Dh5 and Dh5.5 per share.

After trading closed, a source close to Ismaik told Reuters that he had agreed in principle to sell at least part of his stake. The source declined to elaborate on the deal’s size or price but said the deal would be announced soon.

On Tuesday, Arabtec itself said it was unaware of any potential deals.

“There’s short-term risk appetite for Arabtec,” said Sanyalak Manibhandu, manager of research at NBAD Securities. “But once the deal (between Ismaik and Aabar) is done, I think the stock may go down to a more sustainable level.”

Elsewhere in the region, Saudi Arabia’s bourse looks vulnerable to further profit-taking after falling below minor support at its early September low of 11,010 points and sliding to 10,933 points.

Investors began booking profits after the market rose 14 percent following the announcement by regulators on July 22 that they would open the bourse to direct foreign investment early next year.

The global backdrop remains negative as Asian shares held near one-month lows on Tuesday, preparing for a possible hawkish shift in the US Federal Reserve's policy stance.

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