Dubai-based construction firm Arabtec Holding said on Wednesday it has won a Dh3 billion dirham ($817 million) contract to build almost 2,300 houses in the emirate, pushing its stock to a a record-high.
The stock, in which foreigners can own up to 49 per cent, surged 7.38 per cent to Dh13.10 on the announcement.
Arabtec, the largest United Arab Emirates construction company by market value, won the contract from the Mohammed bin Rashid Housing Establishment, it said in a statement on the Dubai bourse website.
Arabtec trades at 9.76 times expected 2007 earnings, below the real estate and construction sector average of 11.72 times, according to Reuters data.
"If you look at the Dubai market, if you want exposure to the construction sector there is nothing but Arabtec," said Amr Diab, head of sales at EFG-Hermes in Dubai.
"The only thing holding Arabtec back is that it has reached its foreign ownership limit," he said.
HSBC's price target for Arabtec is 18 dirhams while Morgan Stanley has a target of Dh18.87 on the stock.
Construction will be completed in phases over the next 40 months, it said, taking the number of houses under construction by the company to 5,000.
In 2007, the company won $2.3 billion worth of contracts in the United Arab Emirates, according to a contractor survey by the London-based MEED magazine.
Quarterly net profit of the firm was expected to reach Dh185.47 million after Dh60.1 million in the same period a year ago, according to the average of a Reuters survey of three analysts. (Reuters)
Arabtec wins $817m deal