Shares of the Dubai courier Aramex continued to decline yesterday on concerns about the impact on the sector from bombs found in parcels in Dubai and England. Aramex declined by 0.5 per cent yesterday, adding to Tuesday's 2.5 per cent decline, to Dh2.04 a share.
The company's GCC chief executive Hussein Hachemsaid the company had suspended shipments from Yemen until further notice as a security measure.
Security has been stepped up around the world since two parcels were intercepted on cargo planes last week. US officials believe the scare is the work of al Qa'eda's Yemen-based regional arm, al Qa'eda in the Arabian Peninsula. While investors may have been alarmed, analysts say they do not expect any major financial impact on Aramex revenues.
"The Yemen operation is not an [Aramex] owned operation but rather a franchisee operation and outbound volumes originating from Yemen are minimal," said Kareem Murad, an analyst with Shuaa Capital. "On that premise the impact on the company's top line will be negligible and we see no impact on the company's bottom line at all. Management guidance has confirmed our views."
Mr Murad said Aramex was likely to incur some higher costs due to the increased security measures but those costs were likely to be passed on to customers.
Shares of Aramex have gone up by more than 50 per cent since the beginning of the year as foreign investors bought up shares until they reached the maximum foreign ownership level. The company's third-quarter profit increased 12 per cent to Dh46.7 million from Dh41.7m in the same period last year.
"In all cases, it is too early to examine the impact of security stepping up at the time being," Mr Murad said. "However, as mentioned, the suspension of the outbound operations from Yemen has no impact on the company's earnings."