Arabtec shares rise as chief overtakes Aabar as largest shareholder
Arabtec shares were lifted yesterday on news that its chief executive had increased his personal shareholding in the company, making him the single largest investor in the builder of Burj Khalifa.
Hasan Ismaik’s stake in the construction firm climbed to 28.84 per cent from 20.51 per cent previously, according to data published yesterday on the Dubai Financial Market.
The acquisition means that Mr Ismaik is now the single largest shareholder in the company, overtaking Aabar, the Abu Dhabi investment fund.
Arabtec announced on May 29 that Mr Ismaik had increased his stake to 21.46 per cent from 8.03 per cent.
Mr Ismaik’s stake was subsequently reported to have fallen to 20.51 per cent on Monday. No explanation was given for the decrease.
Arabtec’s shares closed up 2.55 per cent in Dubai yesterday at Dh6.43 each.
Aabar holds a 21.57 per cent shareholding in the company via four subsidiaries, after a series of share purchases in 2012. Arabtec said in March last year that the fund would not seek to further increase its stake in the company.
Mr Ismaik joined Arabtec in August 2012 and was appointed CEO in February 2013. He is one of five individuals on Arabtec’s nine-person board brought in by Aabar.
An Arabtec statement issued after Mr Ismaik’s stake increase last month said that the move was a vote of confidence in the company, and was designed to reduce volality in the company’s share price.
However, one UAE-based analyst, requesting anonymity, said the move could signal a number of things.
“I’ve never seen a CEO buying up a 20 per cent stake of a company of Arabtec’s size in a single week,” the analyst said.
“You could take the move at face value and say that it’s because he believes the stock is undervalued. On the other hand you could read it as a move to keep the share price high, and to accumulate shares to use as currency for a possible future merger or acquisitions.”
Arabtec shares have more than trebled in value since the start of the year, benefiting from the accelerating pace of construction in the UAE and the prospect of contracts in Egypt.
However the company’s shares have endured a volatile month, shedding 9 per cent of their value in the first full week of trading after the announcement of their inclusion in MSCI’s Emerging Markets Index in mid-May, before recovering much of their value in the past two weeks.
Mr Ismaik’s stake increases may have been accompanied by other share purchases by other Arabtec or Aabar officials, in a move to shore up control of the company, the analyst speculated.
An Arabtec spokesman declined to comment.
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Updated: June 5, 2014 04:00 AM