Markets Wrap: Abu Dhabi's two biggest developers, Aldar and Sorouh, advanced yesterday, amid investor expectations of an imminent merger.
Investors expect Aldar and Sorouh merger
Aldar, which developed Yas Island, gained 2.2 per cent to close at Dh1.35 on the Abu Dhabi bourse.
The shares rose as much as 3 per cent during the trading session.
Sorouh, which developed Reem Island's Sun and Sky Towers, gained 2.2 per cent to close at Dh1.34. The shares rose as much as 2.3 per cent.
"Investors are expecting that the merger will happen. That is what is being priced in right now on the shares," said Saleem Khokhar, the head of equities at National Bank of Abu Dhabi.
"Investors are buying into what will be an Abu Dhabi government-supported company, a combined entity that will be strong and in a better position to secure contracts."
The two companies said they were weighing a tie-up last March.
A merger would create a property developer with US$15 billion in assets.
The Abu Dhabi Securities Exchange General Index added 0.2 per cent to 2,685.99 points.
Emaar Properties rose 1.3 per cent to Dh3.91. The stock holds a 21.2 per cent weighting on the Dubai index.
Logistics companies also made substantial gains. Air Arabia, the region's biggest budget carrier, advanced 1.4 per cent to 88 fils.
Gulf Navigation, Dubai's only publicly traded oil-tanker owner, rose 2.8 per cent to 28 fils.
The Dubai Financial Market General Index closed 0.8 per cent higher to 1,681.75.