Foreign investors raise stake in real estate stocks

Real estate stocks witnessed mixed trend among foreign investors as their stake declined in Emaar Properties and Union Properties. The foreign investors increased their stake in construction stocks such as Arabtec, Drake and Scull and Tabreed. Emaar received a major hit as foreign investors' stake declined from 6.75 per cent by the end of May to 5.11 per cent yesterday. They sold about 100 million shares in Emaar worth Dh276 million, as per yesterday's closing. Foreign stake in Union Properties fluctuated during the past two months as it rose to 3.09 per cent by June-end and retreated to 2.81 per cent yesterday. The same pattern was seen in Arabtec while foreign investors continued to increase their stake in Tabreed and DSI. Wadah Al Taha, a senior financial analyst, sees that fund managers were avoiding investments in Emaar stock due to uncertainty about its merger with three real estate units of Dubai Holding. "The current sell off in Emaar stock was seen during September 2007 when there were preparations for a similar merger. Foreign investors always worry about increasing government stake in listed stocks." Mohamad Al Beheiri, Trading Manager at Amanah Financial Services, agreed that worries among fund managers increased about the possible merger. "There is a negative example in the market as the merger between Amlak and Tamweel delayed and their investments in the two stocks are frozen for a long time. This increased selling pressures on Emaar stock." "Despite foreign investors selling the stock now, we expect they will return buyers when the two parties give detailed information about the planned merger," said Al Taha. He added that foreign investors were selling Emaar and moving to other stocks in the same sector. Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here .