Shares of Sorouh RealEstate decline to fresh new low after Alembic HC cuts the target price by 16 per cent.
Broker's target-price cut hits shares of Sorouh Real Estate
Sorouh Real Estate declined after a local brokerage cut the target price by 16 per cent.
The decision was prompted by the possibility of higher impairments for Abu Dhabi's second-biggest developer. The stock closed the week 7.3 per cent lower.
Alembic HC Securities cut its target for Sorouh to Dh1.60, from Dh1.90. Shares fell 0.6 per cent yesterday to Dh1.51. Earlier, the shares dropped as much as 1.3 per cent.
Earnings per share estimates for last year were cut by 49 per cent as the delivery of Sun and Sky Towers, a key project for the developer, has been pushed back to later this year.
"Accordingly, to be conservative, we now assume 50 per cent of land receivables are unrecoverable, up from 20 per cent previously. Third-quarter numbers showed deterioration in overdue receivables," said Majed Azzam, an analyst at Alembic HC Securities based in Dubai.
Other property stocks also fell. Aldar Properties lost 1.4 per cent to Dh2.01. The Abu Dhabi Securities Exchange General Index rose 0.3 per cent to 2,686.34.
The Dubai Financial Market General Index lost 0.6 per cent to 1,609.20. Losses were led by Gulf General Investment, which fell 3 per cent to 49 fils.
National Central Cooling, also known as Tabreed, fell 2.4 per cent to Dh1.57. Aramex, the Middle East's biggest courier company, lost 2.4 per cent to close at Dh2.03.
Elsewhere in the region: Kuwait's measure slipped 0.2 per cent to 6,896.20; Bahrain's declined 0.1 per cent to 1,422.86; Oman's remained flat at 6,986.13; and Qatar's declined 0.1 per cent to 9,065.59. The Saudi Tadawul All-Share Index was closed for the day.