DP World to invest $32m in Maputo port
Ports operator DP World has announced a $32 million (Dh117.5m) investment plan in Mozambique port of Maputo, through a partnership with Grindrod International Ltd and Mozambique Gestores SARL.
DP World holds the concession to operate the container terminal at Maputo Port and is already a 60 per cent shareholder in Maputo International Port Services (MIPS), the container terminal operating company.
DP World Chief Executive Officer Mohammed Sharaf said the port is the backbone of the Mozambique economy and the project will help develop the infrastructure. “Maputo is also one of the main corridors for the Southern African hinterland. We plan to invest further in container handling facilities there,” he added.
Despite expansions and strong assets of DP World, the stock of the company in Dubai International Financial Exchange (DIFX) has dropped 9.3 per cent from its IPO price of $1.30 since listing last November. Its woes continued yesterday, with the bluechip dropping 2.48 per cent yesterday to close on $1.18.
Haitham Orabi, Head of Asset Management in Shuaa Capital, said the decline in DP World stock will be in the short term. “In the long term it will reach the target value of $1.47. The company priced the stock on the upper bracket range in the IPO so there was a short stage of profit taking after listing the stock. A major factor is persistent speculation the UAE will review the dirham value and the DP World stock is priced by the dollar. Investors try to sell out the stock to gain profits at the new value of the dirham,” Orabi said.
Another factor was the startling rally enjoyed by all domestic Gulf stock markets during the last quarter of 2007. Orabi said: “Investors turned to other stock markets. The new surge in gulf markets started from a very low base so the profit margin increased while the DP World stock started from a higher base. We have noticed pressure on DP World stock during the past 10 days, with a large volume of traded shares and many executed deals, especially in comparison to other stock traded in the DIFX.”
Nadine Wehbe, Orion Brokers Senior Market Analyst, said the decline is not fundamentally justified since the company is on very solid ground. “But when we see this kind of liquidation on a particular stock without a valid reason, it usually means that either the investors are shifting there money, or pressure is being forced to prepare for future deals.”
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