The Arabtec chairman said yesterday that long-delayed plans to build low-cost housing in Egypt were still on the cards.
The stock ended in positive territory for the first time in five sessions.
The chairman Mohamed Al Rumaithi said that Arabtec was still in talks with the Egyptian government to build a first phase of 13,000 homes – just a tiny fraction of the company’s original plans to develop a million low-cost units across the country.
“We are in discussion with the Egyptian government and hopefully we will reach an agreement,” said Mr Al Rumaithi at the Arab Businessmen and Investors Conference in the capital. “The project has been segmented into phases, first phase is 13,000 units, then we move to 100,000, and then to 200,000, and so on.”
Arabtec’s stock jumped by as much as 9.3 per cent during trading yesterday before retreating to close at Dh1.16 – an 8.4 per cent increase on the previous day.
The stock was the most heavily traded on the Dubai bourse yesterday and volumes stood at their highest level in nearly five months.
The saga of Arabtec’s planned US$40 billion low-cost housing project which was announced in March 2014 and was due to start on site in the fourth quarter of 2014 has dragged on as the company attempts to finalise a deal with the Egyptian government.
A deal for the high-profile project across 13 sites was originally struck by Egypt’s president, Abdel Fattah El Sisi, as part of a raft of support offered by the UAE to Egypt aimed at maintaining stability after the Arab Spring.
But so far little tangible progress has been made.
Arabtec, in which the Abu Dhabi government fund Aabar is the largest single shareholder, last week announced a Dh944.7 million third-quarter loss that forced it to write off Dh379m of previously declared profit.
The results sent the stock tumbling 9.92 per cent on Thursday and another 9.32 per cent on Sunday.
The company has been embroiled in a cost-cutting and restructuring programme following the departure of the former chief executive Hasan Ismaik, who was closely involved in brokering the Egyptian deal as part of ambitious plans for the company to expand Arabtec to become one of the world’s 10 biggest builders.
“We are not pricing the Egypt project into our calculations when we look at Arabtec’s share price,” said Allen Sandeep, the director of research at Cairo-based Naeem Brokerage. “Perhaps we could have done so before Hasan Ismaik left, but we are certainly not pricing it in now.
“We have been actively covering this story for years and there has been no change in Arabtec’s stance. But from official and unofficial channels on the ground here we have not heard of any deal being struck.”
He added: “To us it looks like this jump in the share price is more of a reversal after the stock fell so much in the last sessions. The company is still backed by Aabar and, sooner or later once the company has detoxified its balance sheet, we [will] see some sort of rebound in operations.”
lbarnard@thenational.ae
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Industry: FinTech
Funding: Undisclosed
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Number of employees: 8
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Edinburgh: November 4 (unchanged)
Bahrain: November 15 (from September 15); second daily service from January 1
Kuwait: November 15 (from September 16)
Mumbai: January 1 (from October 27)
Ahmedabad: January 1 (from October 27)
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Muscat: March 1 (from December 1)
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Checking: the obsession or thoughts focus on some harm coming from things not being as they should, which usually centre around the theme of safety. For example, the obsession is “the building will burn down”, therefore the compulsion is checking that the oven is switched off.
Contamination: the obsession is focused on the presence of germs, dirt or harmful bacteria and how this will impact the person and/or their loved ones. For example, the obsession is “the floor is dirty; me and my family will get sick and die”, the compulsion is repetitive cleaning.
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What is THAAD?
It is considered to be the US' most superior missile defence system.
Production:
It was first created in 2008.
Speed:
THAAD missiles can travel at over Mach 8, so fast that it is hypersonic.
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THAAD is designed to take out projectiles, namely ballistic missiles, as they are on their downward trajectory towards their target, otherwise known as the "terminal phase".
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UAE and THAAD:
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Name: Yabi by Souqalmal
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This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.