Major recapitalisation announcements from Aldar Properties and Arabtec Holding pulled UAE shares lower yesterday as investors feared dilution of their stock.
Aldar, listed on Abu Dhabi's bourse, said it was calling an extraordinary general meeting to seek approval to issue a convertible bond. The property developer said it was also considering selling certain assets. Aldar, which traded 43 million shares, closed 4.5 per cent lower at Dh2.29.
In Dubai, Arabtec lost 3 per cent to close at Dh1.94. The contractor said it was also planning a convertible bond sale and a rights issue.
"This is clearly a disappointment for the market," said Walid Shihabi, the chief executive of Shuaa Securities in Abu Dhabi. "There are fears of dilution. Given the current conditions, investors would have much preferred companies make do with what they have or pursue the debt market."
The Abu Dhabi Securities Exchange General Index lost half a per cent to close at 2,740.18.
The Dubai Financial Market General Index closed 1.5 per cent lower at 1,633.53. Property stocks dropped sharply, led by Emaar Properties, which declined 1.4 per cent to Dh3.46. Union Properties closed 2.6 per cent lower at 37 fils. The telecommunications firm du was the only stock to trade up yesterday, rising 0.3 per cent to Dh2.97.
Elsewhere in the region: Kuwait's and Oman's measures remained flat at 6,950.60 and 6,918.59, respectively; Qatar's rose 1.6 per cent to 9,137.89; and the Saudi Tadawul All-Share Index gained 0.2 per cent to close at 6,686.19.
