DUBAI: Stock markets in the United Arab Emirates continued to recover Thursday, outperforming an otherwise weak Gulf region, while Qatar took a short-term hit from a rebalancing of the FTSE frontier market index.
Dubai’s bourse was the Gulf’s top performer, adding 1.6 percent and moving for the first time in more than three weeks in the opposite direction from Arabtec, which edged down 0.9 percent.
Arabtec, which dropped 50 percent in the last two weeks, still dominated trading volume, swinging between positive and negative territory as investors digested the surprise resignation of its Chief Executive Hasan Ismaik Wednesday.
While some were positive about Ismaik’s departure and temporary replacement with an executive close to Aabar Investments, a major shareholder, others still had reservations about the stock.
It remained unclear, in particular, what Ismaik plans to do with his stake in the company, which is 28.85 percent, making him the largest shareholder, said Julian Bruce, director of Western institutional equity sales at EFG Hermes.
Those concerns limited the stock’s upside, disappointing short-term investors.
“Daytraders who were expecting a good positive move could see that there wasn’t a great deal of momentum and they just cut their positions toward the end of the session,” Bruce said.
After the close, Ismaik told Reuters that he would hold onto his stake.
“I will keep it. I am an investor. I believe in the company, Arabtec has great potential.”
Other Dubai property-related stocks were strong, however. Emaar Properties jumped 4.5 percent while construction firm Drake and Scull surged 5.6 percent to an all-time high of 1.90 dirhams.
Shares in Drake and Scull started strengthening after the company said Tuesday that it planned to issue a 55-million dirham ($15 million) convertible bond to a strategic investor, which it did not name.
Abu Dhabi’s bourse rose 0.5 percent, boosted by Abu Dhabi Commercial Bank and National Bank of Abu Dhabi, which were up 2.6 and 1.0 percent respectively.
Shares in two local energy firms that have operations in Iraq’s Kurdistan region also rose after declining earlier this week in response to the military advances made by insurgents. Abu Dhabi National Energy Company was up 3.5 percent and Dana Gas gained 1.4 percent.
Qatar’s bourse slid 1.1 percent, largely because of Qatar National Bank, which dropped 3.8 percent.
The stock is the heaviest component in the FTSE frontier market index, which will undergo a quarterly rebalancing Friday; Bruce from EFG Hermes said selling related to the adjustment was most likely the main reason for the price drop.
Industries Qatar, which is the second largest stock in the benchmark, fell 1.5 percent.
Egypt’s market slid 1.2 percent, dragged down by blue chips Global Telecom Holding and Commercial International Bank, which fell 2.4 and 1.5 percent respectively.
Unlike the oil-rich Gulf states, Egypt’s economy could suffer from a sustained rise in oil prices due to the fighting in Iraq, as it relies on imported energy and subsidizes domestic fuel prices.