Investors are more positive on the shares of Aldar Properties after last month's funding plan strengthened the developer's balance sheet.
Aldar starts to tempt investors once more
Aldar Properties has not been a favourite among stock-pickers for some time but attitudes look to be changing.
Since the announcement of the property developer's new funding plan last month, some investors are convinced the company's balance sheet is no longer an issue.
The investment bank UBS upgraded its recommendation on the stock yesterday from "sell" to "neutral" with a price target of Dh1.75.
Anuj Mehrotra, a UBS analyst based in Dubai, wrote in a note that the property developer had a "much cleaner and relatively stronger balance sheet".
After a difficult few months in which Aldar's price fell 37 per cent from a high in October of Dh2.66, the shares were flat yesterday at Dh1.67 on relatively low levels of trading on the Abu Dhabi Securities Exchange General Index.
Aldar announced a funding plan early last month in which the Abu Dhabi Government would buy Dh10.9 billion worth of the company's infrastructure assets on Yas Island, Dh5.5bn worth of residential units and land, and the company will issue a Dh2.8bn convertible bond.
Investors appear to be taking a fresh look at the stock.
Aldar said last week it was still moving forward with two of its signature projects, news that was likely to have assured many potential buyers.
The developer confirmed it still expected to open the first phase of Motor World, its collection of new and used-car showrooms, in April.
It said it was also set to deliver 2,600 housing units in the Al Raha Beach area this year.