Dubai’s Arabtec dragged the bourse to a 13-week low on Sunday after investors pocketed gains amid concerns about the minority shareholders’ stake in the contractor, while Egyptian stocks rebounded on optimism over political stability in the country.
Abu Dhabi fund Aabar Investments has raised its stake in Arabtec Holding to 53 percent, a market official said on Sunday, effectively taking control of Dubai’s largest builder after a failed $1.7 billion bid two years ago.
Arabtec shares, which had surged 94 percent year-to-date, plunged 5.8 percent over fears that the company may delist and that minority shareholders’ interests would be overlooked.
“The rationale is that Arabtec will be a good instrument towards building Abu Dhabi 2030 plans,” said an Abu Dhabi-based trader who asked not to be identified.
“Partly, the share price reaction is due to a bad overall market background and some has to do with selling on fact.”
Dubai’s index dropped 1.8 percent to its lowest close since Feb. 9.
“The DFMGI is hitting a support level near 1,480 points and may target 1,570 level,” said Mateb Al Ghanim, portfolio manager at Riyadh-based Amlakuna Investment Group. “The next support is near 1,466 levels... If a rebound occurs, the index faces a strong resistance at 1,649 levels.”
Bellwether Emaar Properties fell 1.3 percent and heavyweight bank Emirates NBD declined 1.4 percent.
In Egypt, the main index rose 1.4 percent, led by construction and real estate stocks on signs politics may be stabilizing ahead of presidential polls due to begin on May 23.
“Several factors are contributing to the market, mostly from retail investors,” said Chamel Fahmy of Pharos Securities.
These include a weekend free of political protests and a court ruling late last week that rejected an attempt to have the election postponed, he added.
“Turnover is not impressive. I’m expecting we will remain at this same pace until presidential elections, and then the long-term picture will clarify,” said Fahmy.
Orascom Construction gained 3.1 percent, and Palm Hills climbed 2 percent.
In Saudi Arabia, the index fell 0.7 percent to an 11-week low as petrochemicals stocks headed declines.
It trimmed year-to-date gains to 11.9 percent.
“We might see a minor rebound close to 7,350, which is still an opportunity for the short-term traders to minimize their positions,” said Mohabeldeen Agena, head of technical analysis at Cairo’s Beltone Financial.
“We expect the bears to continue their attack and push the index downward, close to the range of 6,850 and 7,000.”
Yanbu National Petrochemical slid 2.3 percent, and Saudi Kayan Petrochemical dropped 2 percent.
“We are in a correction phase and it’s a matter of weeks before the market will rebound to new highs,” said Sebastien Henin, portfolio manager at The National Investor.
Henin added he is bullish on the Saudi economy, but further negative news from Europe could thwart a Saudi rebound.
Oil fell on Friday and posted a second straight weekly loss, while world stocks have also slid on uncertainty over Europe’s festering debt crisis.