Arabtec Holding's stock slumped for a third consecutive day yesterday, helping to drag the Dubai Financial Market General Index down by 1.9 per cent yesterday.
The builder fell by a further 9.9 per cent to close at Dh2.17, the lowest level since February last year as investors shied away from the prospect of a rights issue. Arabtec shares have fallen 26.7 per cent in three days - knocking a total of 42.6 per cent off the DFM index. It closed at 1,899 points yesterday.
Arabtec's slide follows the announcement on Thursday that it would undertake a Dh4.8 billion rights issue and issue a further Dh1.6bn of convertible bonds.
"With this new rights issue some investors are saying they are not willing to pay up any more. They don't want to see their share capital diluted and so they are exiting at this point before the discounted rights issue," said Saleem Khokhar, the head of equities at National Bank of Abu Dhabi. The Abu Dhabi Securities Exchange General Index fell 0.3 per cent to 3,026 points as share prices dwindled for the soon-to-merge property developers Aldar and Sorouh.
Aldar fell 5.2 per cent to Dh1.47 and Sorouh 3.7 per cent to Dh1.81 following the companies' extraordinary general meetings on Sunday giving shareholder backing to the Dh47bn merger.
"This is speculative profit taking from short-term investors," Mr Khokhar added. "Now that it is a done deal there is nothing for them left to play for. They've had a very good run and are now taking their profits."
News that China is taking steps to curb property prices also dampened the mood for property and construction securities on both exchanges - among the decliners were RAK Properties, Eshraq Properties, Drake & Scull International and Emaar Properties, the largest developer in the UAE.
