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DUBAI / Reuters
Construction-related shares underperformed Riyadh’s stock market on Wednesday because of poor first-quarter earnings, though troubled Dubai builder Arabtec jumped after shareholders approved a capital restructuring plan.
Riyadh-listed Arabian Cement slid by 5 percent after reporting net profit for the three months to March 31 down 55 percent year on year, citing lower sales volumes and prices.
Other cement companies have also reported double-digit declines in quarterly earnings, with analysts saying the sector’s outlook does not look promising. Government sources told Reuters this weak that the government is embarking on a review of unfinished projects to shelve some of them indefinitely as a cost-saving measure.
The Dubai index extended Tuesday’s 0.9 percent gain by adding 0.3 percent. Arabtec surged by nearly 11 percent in its heaviest trade for two months on news that shareholders had approved its 1.5 billion dirham ($409 million) new share issue and a plan to use existing capital to wipe out accumulated losses. Emaar Properties continued to be bid up, adding 1.3 percent after a gain of 3.3 percent on Tuesday.
The stock has been strong since the company’s annual general meeting on Monday. Blue-chip stocks helped to carry Abu Dhabi’s index 0.8 percent higher. Abu Dhabi Bank, the largest lender in the emirate, and Aldar Properties each added 0.9 percent. Union National Bank jumped by 6.6 percent, having last week reported a small increase in net profit attributable to owners, at the higher end of analysts’ estimates. The Qatar index dropped 0.4 percent in a broad-based decline.