Shares of Dana Gas declined more than 6 per cent yesterday as the company accounted for more than half of the volume on the Abu Dhabi Securities Exchange.
However, analysts struggled to find a reason for the sharp decline.
"There is no material news out in the market that can justify such significant falls," said Ali Khan, the managing director and head of equities at the investment bank Arqaam Capital. "We have even checked with the company and we are told the shares are declining in a negative market and not on any company-related information," he said. Reuters also reported that a senior executive said the company had held meetings to update investors recently but no major announcement was expected.
Dana Gas closed down 6.06 per cent, to Dh0.62, reaching a 52-week low for the second day in a row. The steep drop came on a day when the capital's bourse ended slightly lower on slim trade volumes. With 28.35 million shares changing hands, Dana Gas made up 58 per cent of the total trade volume.
The company has attracted significant liquidity during the past few sessions and its share price has been declining since the beginning of last month. The price has fallen close to 18 per cent this month and is down 47.45 per cent from its peak in October last year.
Chahir Hosni, the equities sales manager at EFG-Hermes in Dubai, said the recent decline suggested some major investors were offloading Dana Gas shares. In the absence of major news, most analysts are positive on the fundamental strength of the company and see a considerable potential for a rise in the share price. Kuwait's Global Investment House maintains a "buy" recommendation for the stock with a target price of Dh1.04.
The company's first-quarter revenue rose 66 per cent on improving oil prices and an increase in production in its operations in Egypt and Iraqi Kurdistan. It returned to profitability in the first quarter of this year, posting net earnings of Dh33 million.
skhan@thenational.ae
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Founder: Amir Barsoum
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Sector: HealthTech / MedTech
Size: 300 employees
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Investors: Technology Development Fund, Silicon Badia, Beco Capital, Vostok New Ventures, Endeavour Catalyst, Crescent Enterprises’ CE-Ventures, Saudi Technology Ventures and IFC
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