Shares in Sorouh Real Estate rises to their highest level in more than two years as expectations build about progress in a potential merger with Aldar Properties.
Sorouh and Aldar shares gain as merger progress expected
Sorouh climbed 6.3 per cent to Dh1.87, the highest since June 2010 at the close in Abu Dhabi, while Aldar advanced 4.8 per cent to Dh1.54, the strongest since January 17.
The stocks were the most traded by value on the benchmark Abu Dhabi Securities Exchange General Index, which was barely changed at 2,970.68 points.
The companies will hold separate shareholder meetings on Thursday.
Aldar's board last month approved a plan to offer 1.288 shares for each Sorouh stock in a government-backed acquisition to create the Middle East's third-largest publicly traded developer.
Sorouh's stock has advanced 15 per cent since the announcement as investors deemed the terms of the merger to favour the smaller of the two, while Aldar's has declined 5.5 per cent.
"It seems something very positive is expected at the meeting," said Nabil Rantisi, the managing director of brokerage at Abu Dhabi-based Menacorp. "The expectations seem to be beyond the terms as the movement is strong."
About 55 million Sorouh shares were traded, more than three times the three-month daily average, compared with 129 million for Aldar, more than six times the average.
Abu Dhabi is seeking to revive its property market after prices fell more than 50 per cent during a crash. Sorouh rallied 41 per cent last month while Aldar gained 13 per cent in the period.
Elsewhere, the Dubai Financial Market General Index retreated 0.4 per cent to 1,881.89. Banks, financial services, property and construction were among the stocks falling on the Tadawul All Share Index in Saudi Arabia, which dipped 0.2 per cent to 7,056.53.
* Bloomberg News