Monday 11 January 2010

Dubai Index Drops to 2-Week Low on Concern About Arabtec Deal

Dubai shares slid to the lowest level in almost two weeks on investor concern that shareholders will not benefit from a planned purchase of a 70 percent stake in Arabtec Holding Co. by Aabar Investments PJSC.

Arabtec, the United Arab Emirates’ biggest construction company, fell for a second day to a two-week low. Emaar Properties PJSC, the U.A.E.’s biggest developer, dropped to the lowest this year. Sorouh Real Estate PJSC, Abu Dhabi’s second- largest property developer, retreated the most in more than two weeks. The DFM General Index lost 1.4 percent to 1,788.85, at 1:08 p.m. in Dubai, the lowest intraday level since Dec. 30. Abu Dhabi’s measure dropped 0.3 percent.

“Arabtec is being punished and is dragging the market with it,” said Rabih Sultani, a fund manager at Duet Mena Ltd., a unit of Sydney-based Duet Group, which oversees about $2.1 billion. “The deal offered very little in terms of shareholder value and was tainted with flagrant insider trading.”

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