Emaar stocks’ loss drags down DFM

Dubai’s leading real estate developer, Emaar Properties, pulled the emirate’s stock index lower yesterday while Saudi Arabia’s index again retreated from major technical resistance.

The Dubai index lost 0.8 per cent to 3,644 points, pulling back from resistance on the August peak of 3,681. Emaar slid 2.1 per cent after saying it expected to sell 20 per cent of its local property development unit Emaar Development next month in an initial public offer. Previously, Emaar had said it would offer up to 30 per cent of the business, distributing funds raised as dividends to shareholders in the parent company.

It did not reveal yesterday why the sale was now expected to be only 20 per cent, but investors assumed its decision would mean a smaller dividend – and might indicate demand for the IPO was only lukewarm, thanks to a slumping Dubai property market.

Mohammad Kamal, an analyst at Arqaam Capital, said that assuming a net asset value of Dh23.8 billion for the unit, investors might receive a special dividend of Dh0.66 per share, far below the Dh1.28 which the market had been anticipating. But he added that Emaar might use Dh5.5bn of debt at the subsidiary level to bolster the special dividend payment. Emaar’s last special dividend based on a unit’s IPO was boosted with outside funds, he said.

Elsewhere in Dubai, GFH Financial climbed 1.8 per cent and was Dubai’s most heavily traded stock after the UAE securities regulator approved the listing of Bahrain’s Khaleeji Commercial Bank, subject to approval by the Bahrain central bank.

GFH owns 47 per cent of Khaleeji, and has long been aiming to list the bank in Dubai.

In Abu Dhabi, the index edged down 0.2 per cent but Eshraq Properties rose 1.3 per cent after reporting a third-quarter net profit of Dh685,000 following a year earlier loss of Dh48.5m.

In Saudi Arabia, the Tadawul slipped 0.5 per cent to 6,975 points, retreating from resistance on the 200-day average, now at 7,035 points.

Dairy firm Almarai climbed 0.5 per cent, however, after its quarterly net profit of 667 million riyals, versus 664.3m riyals a year earlier, beat the 621m riyal forecast on average by analysts in a Reuters poll.