Equities Tumble on Heavy Profit-taking

DUBAI - UAE bourses were hit by profit-taking on Monday, with Arabtec Holding pacing losers in Dubai, as its disappointing first-quarter results prompted investors to cash in gains from recent rallies.



Arabtec, the country’s biggest construction company and builder of the world’s tallest skyscraper, Burj Dubai, plunged by 8.36 per cent to Dh2.19. The company announced its results after trading hours on Sunday, posting a consolidated first-quarter profit of Dh161 million, compared with Dh231.4 million during the same period last year.

“Arabtec already gave its guidance for the year. They need to have stronger numbers in the succeeding quarters to meet their targets this year,” said Ali Khan, managing director of Arqaam Capital Limited. Arabtec had earlier projected a revenue of Dh9.5 billion and a net profit of Dh950 million for 2009.

Selling pressure also hit property and banks, which pushed down the benchmark index of the Dubai Financial Market by 4.48 per cent to 1,666.52, with property stocks plunging by 7.88 per cent, and banks by 1.92 per cent. Out of the 25 traded stocks, 24 declined.

“UAE markets were brought down to earth with a bump. Profit-taking was overdue and the severity of today’s falls are no surprise given the ferocity of the gains. If stocks rise this way, you’ve got to expect them to fall the same way,” said Matthew Wakeman, managing director of cash-and-equity linked trading at EFG Hermes.

Property stocks which fell by 6.91 per cent, weighed down the main index of the Abu Dhabi Securities Exchange, finishing 2.65 per cent lower at 2,623.70.

“It was a healthy profit-taking. Stocks rose on very little solid fundamentals in recent weeks. This correction will continue in the next couple of sessions as investors re-test the bottom,” said Vyas Jayabhanu of Al Dhafra Financial Brokerage.

Dubai-based Emaar Properties, the Middle East’s biggest property company by assets, slipped by 7.29 per cent to Dh2.54. Deyaar Development lost by 9.58 per cent to Dh0.66. Union Properties fell by 8.42 per cent to Dh0.87.

Among banks, Emirates NBD, the UAE’s biggest bank by assets, edged down by 1.35 per cent to Dh2.91. The Dubai Islamic Bank declined by 4.91 per cent to Dh2.32.

In Abu Dhabi, Sorouh Real Estate was down by 7.02 per cent to Dh2.74. Sorouh said it will reduce prices at its Alghadeer project at the border of Dubai and Abu Dhabi. Aldar Properties fell by 6.97 per cent to Dh3.75. RAK Properties lost 5.8 per cent to Dh0.64.

The National Bank of Abu Dhabi declined by 4.29 per cent to Dh9.85, while First Gulf Bank, retreated by 1.23 per cent to Dh11.80.

rocel@khaleejtimes.com


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