The shares of Deyaar Development continued to tumble yesterday, matching their 52-week low. Analysts say there is no support in sight that could reverse the trend, short of major shareholders coming forward with a rescue plan for the highly leveraged developer. Making matters worse, Deyaar is at risk of being delisted under Securities and Commodities Authority regulations that allow the regulator to suspend the shares of companies that are trading at less than 40 fils. Deyaar fell 3.4 per cent yesterday to 31 fils, a price last seen on June 1. The shares are down 69 per cent from their 12-month high of Dh1 and are about 50 per cent lower this year.
The developer, which is 43 per cent owned by Dubai Islamic Bank, has struggled since the onset of the economic downturn and the crash of the property market last year. "It's a sell-off which will continue until there is a clear rescue plan from the big boys," said Yazan Abdeen, a fund manager at ING Investments Management in Dubai, referring to Dubai Islamic Bank. "Until then, I'm afraid, it's a downhill slide for Deyaar.
"People realise that this is a highly leveraged company which is finding it difficult to raise cash and hand over properties," he added. On a day when the Dubai Financial Market retreated on weaker volumes, Deyaar was the most traded stock, accounting for more than 30 per cent of the exchange's volume, outpacing even its much larger counterpart Emaar Properties. Last year Deyaar seemed to be rebounding from the property crash and convinced several major international investors to commit Dh200 million towards its Dh500m distressed property fund.
But the fund was put on hold at the end of last year when the investors lost confidence after Dubai World asked creditors for a six-month standstill on its debts. Deyaar swung to a first-quarter net loss of Dh100m from a profit of Dh54m for the same period last year, largely due to increased provisions. skhan@thenational.ae
