Shares in Emaar Properties sank to their lowest level since December yesterday amid investor concerns that the chairman Mohamed Alabbar may scale back his role in the company as he spearheads massive infrastructure projects in Egypt.
Emaar stock fell 5.3 per cent to close at Dh6.25 in trading yesterday, their lowest level since December 17, marking a fourth day of losses.
Analysts pointed out that the declines follow news last weekend that Mr Alabbar was leading a project to build a new administrative capital in Egypt through his Capital City Partners fund and not involving Emaar.
In recent months it emerged that Mr Alabbar has also been appointed to the board of Eagle Hills, an Abu Dhabi-based property development company that has quietly been recruiting former top Emaar executives.
And in November more members of Emaar top brass quit to set up Nshama, another property company.
“A lot of investors are confused at the moment about movement at the top of Emaar,” said Sebastien Henin, the head of asset management at The National Investor. “After the announcement at the weekend investors are concerned that Mr Alabbar may reduce his involvement at Emaar. The company needs to come out and make a statement to the market about what is going on. The share price falls are a reaction to the lack of visibility. ”
But other analysts pointed out that yesterday’s stock price fall for Emaar came amid declines for the entire market.
Overall the Dubai Financial Market index fell 3.57 per cent in trading yesterday to close at 3,408.18 as investors fretted about declines in oil prices, fears over when US interest rates could be hiked and a deep slide in the euro. The index has shed almost 10 per cent since the start of the year.
Union Properties stock declined 4.4 per cent in trading to close at 95 fils, Damac shares fell 3.5 per cent to close at Dh2.20 and Arabtec stock was down 3.65 per cent to close at Dh2.64.
“Emaar shares are not the only stock to be falling today,” said Harshjit Oza, the assistant director for research at Naeem Brokerage.
"There is a weakness in the whole sector which is not specific to Emaar," he said. "This slump is much more to do with what is happening in the US and Emaar is noticed more because it has more weight on the DFM than any other company. It has been a favourite stock among traders so will either lead a rally or a decline."
lbarnard@thenational.ae
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