Arabtec Holding jumped the most in three weeks amid heavy investor buying as the Dubai contractor's shares adjusted to its ex-rights price.
On June 9, Arabtec is aiming to raise Dh2.38 billion through the issuing of new shares to investors.
The company, which is 21 per cent owned by the Abu Dhabi investment fund Aabar, has invited shareholders to buy the additional shares at 27 branches of National Bank of Abu Dhabi and 17 branches of Abu Dhabi Commercial Bank across the UAE until June 23.
Arabtec's shares jumped 7.7 per cent yesterday, the most since May 8, to close at Dh2.03.
It was the top traded stock, with more than Dh244 million changing hands, accounting for more than a quarter of Dubai's total trading activity on the broader market.
"There was strategic buying to ensure that the price remains at a premium to the rights offer in order to attract more interest into the rights issue," said Mohammed Ali Yasin, the managing director at National Bank of Abu Dhabi's brokerage arm.
The shares closed at Dh2.27 on Tuesday, the last day on which investors could buy shares and become entitled to the rights issue.
They opened at Dh1.94 yesterday morning, following a market adjustment, to factor in the new shares.
Separately, speculation of further collaboration among Dubai's contracting companies came to fruition after Drake & Scull International was awarded a Dh187 million contract to carry out works on the St Regis Hotels and Residences project in Amman, Jordan.
The main contract for the resort was awarded to Arabtec this week.
DSI's chief executive Khaldoun Tabari was appointed this month as director on the board of a company majority owned by Arabtec. He was one of several new directors to be appointed on the board of Depa, which is listed on Nasdaq Dubai, as Arabtec demanded a board shuffle and received representation on the board.
DSI declined 0.5 per cent to 99 fils yesterday.
The shares, however, have risen more than 30 per cent since January amid speculation that the company could become a takeover target for Arabtec.
Speaking to Reuters on the sidelines of a conference in Abu Dhabi on May 15, Mr Tabari said he was not interested in selling but added that there would be more announcements shortly about the two firms working together.
