Arabtec stock gained 4.6 per cent yesterday after it emerged that the chief executive Hasan Ismaik had become the company’s biggest single shareholder, amassing a stake of more than 21 per cent.
Arabtec shares closed at Dh6.59 after Dubai's largest listed contractor announced the previous evening that Mr Ismaik had acquired the 21.46 per cent stake – worth more than Dh5.9 billion on current prices – upping his share in the company from 8.03 per cent.
“Our investment in Arabtec is strategic,” Mr Ismaik said on Wednesday as he called on shareholders to refrain from speculation.
“When management buy shares in any company, investors can see that it shows belief in the company and Mr Ismaik was very clear to say that it should be viewed as a long term commitment,” said Sanyalak Manibhandu, a research manager at NBAD Securities. “However, investors could also say that he has to say that.”
Arabtec's share price has been through a particularly volatile phase in recent days, rising 9.2 per cent during trading on Tuesday then falling 5.4 per cent on Wednesday as the stock was buffeted by investor sentiment on the MSCI and comments from the company that it wants to build Egypt's new airport.
Last month Arabtec asked investors to swap a proposed cash dividend for bonus shares as the company announced it was building a war chest to aggressively expand with the aim of becoming one of the world’s top 10 biggest builders.
Analysts warn that the volatility of the company’s share price could make it harder for it to borrow in order to acquire major rivals.
Despite Mr Ismaik’s purchase, the Abu Dhabi fund Aabar still owns a slightly larger overall chunk of Arabtec, controlling a total of 21.57 per cent of the company.
Aabar’s shareholding is split between four of its subsidiaries; Aabar Energy (5.84 per cent), Aabar Petroleum Investment (5.32 per cent) Aabar Petroleum (5.23 per cent) and Aabar Real Estate (5.14 per cent).
lbarnard@thenational.ae
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