Confidence in Arabtec restored as Aabar continues support
For second day running, Arabtec retains support of investors, with shares soaring to daily limits of 14.9 per cent.
At a press conference on Wednesday (July 2) afternoon, Arabtec’s chairman, Khadem Abdulla Al-Qubaisi, reassured investors that major stakeholder Aabar Investments will continue to support the firm in the long term, despite a recent decrease in shares. It also announced that no projects, including the $40 billion property deal in Egypt, will be scrapped.
Many had speculated about the future of Arabtec, as Abu Dhabi state fund Aabar cut its stake in the company, from 21.57 per cent to 18.94 per cent, in early June, followed by the abrupt resignation of CEO and stakeholder (28.85 per cent), Hasan Ismaik. Along with a warning by the UAE’s Central Bank that a recent hike in rent prices was making the property market ‘overheated’, Arabtec shares began to plunge, reaching daily low limits of ten per cent and losing $6.5 billion in value, according to Reuters.
Consequently, a press conference was scheduled for Wednesday afternoon to answer some of the issues and in anticipation of what may be announced (with some even speculating that the UAE government may intervene and buy out Ismaik’s stake), confidence was rapidly restoring. After 2pm on the same day, shares already reached their daily limits and the positive forecast by chairman Al-Qubaisi somewhat rewarded investors for their faith.