Aldar in focus after assets sale; weak Asian lead

Abu Dhabi’s Aldar Properties is expected to make sharp gains after the emirate’s government threw a 16.8-billion-dirham ($4.57 billion) lifeline to the developer buying assets and retiring a loan.

Shares in the developer rose 3.7 percent on Wednesday ahead of a board meeting held to discuss asset sales, trimming year-to-date losses to 62.6 percent.

“This is definitely positive news for debt holders once more since the government is mainly providing Aldar with liquidity in order to repay more debt and deleverage its balance sheet,” Ahmed Badr, research analyst at Credit Suisse says in a note.

“For equity holders, it is less positive as the company is barely making any money on the back of those asset sales and the cash in flow will be mostly consumed by debt repayment.”

Qatar’s Union Development Company (UDC) will resume trading on Thursday after a one-day suspension. Activity is likely to be boosted after it said it is in talks with a state pension fund to make a strategic investment worth 160 million riyals ($43 million).

The deal would see UDC issue 80 million new shares at 20 riyals each to the pension fund, pending shareholder approval.

In more companies news, a Kuwaiti court on Wednesday overruled a verdict that had deemed Zain’s April annual general meeting void, in a victory for the telecoms operator. A former board member, Sheikh Khalifa Ali al-Khalifa al-Sabah, had opposed the process to elect the board.

In Wednesday's action, Dubai’s index made its largest one-day gain in two months in what traders said appeared to be end-of-year window-dressing, while most regional markets also edged higher.

Gulf markets have a subdued lead for Thursday’s trading as Asian stocks fall, taking cues from weak U.S. and European shares, as players cut positions heading into the year end. Brent crude oil edged lower towards $107 a barrel.

($1 = 3.6730 UAE dirhams)