Dubai shares rebound on Arabtec assurances

Dubai share prices rebounded strongly on Wednesday following a massive slide after leading construction firm Arabtec denied reports it was planning to de-list and assured investors over its finances. The Dubai Financial Market (DFM) Index jumped 6.1 per cent to close at 4,253 points a day after shedding 6.7 per cent on troubles facing Arabtec coupled with a deeper than expected correction, traders said. Arabtec led the recovery as the most actively traded shares on the DFM, which has been rising for months on optimism about Dubai's economy, particularly in the key real estate sector. After shedding the maximum 10 percent for three straight days, Arabtec closed 5.13 percent higher on Wednesday. In a statement to the stock exchange, Arabtec chairman Khadem al-Qubaisi gave assurances the company was forging ahead with its massive construction plans and denied reports it planned to de-list. ‘Arabtec has never requested or discussed with the Securities and Commodities Authority to be delisted,’ said Qubaisi who recalled a similar statement by the bourse authorities also denying such reports. On Tuesday, the company admitted it had laid off staff following the resignation of its chief executive Hassan Ismaik last week. Qubaisi said Arabtec has a ‘strong internal administrative structure, solid financial position and will continue to drive growth and development, and further achievements in the coming period.’ On the issue of laying off staff, Qubaisi insisted that was part of a restructuring process to cut costs without impacting the firm's expertise. All sectors on the DFM made strong gains except the industrials sector which dived. Market leader EMAAR rose 7.06 percent while the real estate sector was up 7.0 percent. Since mid-May, DFM Index has lost 21 percent after peaking at 5,406.62 points. After sustaining huge losses at the onset of the global financial crisis in 2008 and the subsequent woes over Dubai's huge debt, the DFM has made an impressive comeback in the past few years. Last year, it gained a mammoth 108 per cent after a 20 per cent rise in 2012 on the back of positive economic indicators for Dubai and the whole United Arab Emirates. Despite the losses in recent weeks, the DFM is still up 26.2 per cent on the year while its market capitalisation is around $90 billion. The stock market in neighbouring Abu Dhabi closed up 1.9 per cent at 4,639.41 points on Wednesday after shedding 3.3 per cent the previous day, according to AFP.