Arabtec Cut to Hold at Deutsche Bank on Weak Backlog

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Arabtec Holding PJSC, the largest construction company in United Arab Emirates, was downgraded to “hold” from “buy” by Deutsche Bank AG on concerns about its plans for expansion outside Dubai and a weak orderbook.

The share price estimate was lowered 20 percent to 2.4 dirhams ($0.65), Deutsche Bank said in an e-mailed note to clients today. Arabtec traded 4 percent higher at 2.33 dirhams at 12:15 p.m. in Dubai. The shares have slumped 13 percent this year compared with a 4.6 percent drop in the Dubai Financial Market General Index.

Arabtec “released a surprisingly weak backlog at 13.2 billion dirhams due to a contract cancellation in Dubai and a lower scope of works in Qatar and Saudi Arabia,” analysts Nabil Ahmed and Athmane Benzerroug wrote in the note dated March 13. The orderbook, excluding a project in Russia, fell short of an expected 17.7 billion dirhams, according to the note.