Al Mal Capital Keeps ‘Outperform’ Rating on Arabtec

DUBAI — Brokerage Al Mal Capital kept its ‘outperform’ rating on UAE construction company Arabtec Holding, saying its shares will be boosted in the near-term by its winning of a Dh687 million contract to build Onyx Towers in Dubai.

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Published: Wed 26 Aug 2009, 10:44 PM

Last updated: Thu 2 Apr 2015, 3:46 AM

Arabtec shares, which are listed at the Dubai Financial Market climbed by 1.4 per cent to Dh2.82 on Tuesday.

The company said on Monday that the Onyx contract was awarded by Ishraqah, a Saudi-based developer. The project involves the construction of a three-tower commercial and retail building. Al Mal said Arabtec continues to bag contracts under existing difficult market conditions.

“Although the order is in Dubai, we are relatively comfortable given that the order is not for a Dubai government or quasi-government entity,” said Al Mal. The brokerage said that while it continues to have a negative view of the UAE construction sector and does not see a recovery before the first half of 2010, it is bullish about Arabtec’s overseas projects. “We retain our favourable view of Arabtec, given its geographically diversified portfolio, increasing efforts to enhance client mix and evidently improving liquidity situation in the first half of 2009.”

Al Mal said the Onyx project increases Arabtec’s exposure in Dubai to Dh9.10bn, 32.4 per cent of the total outstanding backlog of Dh28 billion or half of the outstanding backlog excluding Russia. The brokerage estimated that out of Arabtec’s outstanding receivables of Dh4.48 billion at the end of the first half of 2009, more than 50 per cent comes from Dubai master developers, which accounted for 32 per cent of its revenue mix during the period.


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