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Arabtec shares record best week in more than seven years

Arabtec shares rebounded yesterday, capping the stock’s best week in more than seven years.

The construction firm’s shares, which at one point plummeted 20 per cent on Wednesday afternoon following a “sell” note from EFG Hermes, the yesterday rose by as much as 11 per cent, before settling 8 per cent higher at Dh1.62.

“We were surprised because we expected it to fall further today,” said Khaldoun Jaradat, a trading manager at Brokerage House Securities in Dubai.

“Many of our clients who sold [on Wednesday afternoon] didn’t close their entire positions, they obviously think the rally’s not done yet.”

Arabtec surged 42 per cent for the week, its best weekly performance since February 2009, with both local and foreign investors piling into the stock on speculation that the former chief executive Hasan Ismaik was increasing his stake in the company.

Mr Ismaik, who cut his shareholding in the months following his abrupt departure in July 2014, this week raised his stake in the company to 11.91 per cent from 11.81 per cent previously.

EFG said on Wednesday that the recent rally in Arabtec was not supported by the fundamentals of the company or the construction sector as a whole.

Investors have paid little heed to such warnings, however, with an unprecedented 1.9 billion shares in the firm changing hands during the week.

Shares in Dubai Financial Market and Damac were among the other gainers on the Dubai Financial Market General Index yesterday, which gained 0.7 per cent to 3,250.22.

In the capital, Etisalat closed up 2.5 per cent at a fresh 11-year high of Dh18.10, on news that the telco’s stock will be included in the FTSE Global Equity Index Series.

Etisalat’s inclusion in the index, scheduled to take place after the close of business on March 18, will result in inflows of about $216 million into the stock from various index trackers, according to EFG Hermes.

The Abu Dhabi Securities Exchange General Index rose 0.9 per cent to 4,420.51, on gains in banking sector shares.

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