Shares of Dubai contractors rise as Qatar real estate firm announces plans to make project awards for Lucail City, which will host the World Cup final.
Prospect of Qatari contracts lifts Arabtec Construction and DSI
Both Arabtec Construction and Drake & Scull International (DSI) shares got a needed lift yesterday after a Qatari company said it planned to award contracts worth US$3 billion in the next year in preparation for the 2022 Fifa World Cup, to be held in Qatar.
The Dubai contractors are expected to be among the top UAE bidders for infrastructure projects in Qatar.
Lusail Real Estate Development said it planned to award contracts for the Lusail City project valued at $3bn. It is scheduled to be completed by 2019. Lusail is part of Qatari Diar Real Estate Investment, the development arm of Qatar's sovereign wealth fund.
Arabtec gained 3 per cent to Dh1.34 yesterday. DSI also rose more than 3 per cent in early trading but ended the day flat, at Dh0.90.
DSI is bidding for Dh4bn worth of projects in Qatar, Khaldoun Tabari, its chief executive, said last month. The contractor acquired a prominent Qatari contracting company last year as part of its plans to enter the market there and to bid for government infrastructure projects.
"DSI has been diversifying geographically; they have no problems when it comes to cash and would be able to take on such projects," said Ameed Kanaan, the general manager at Al Jazeera Financial Services in Dubai. "Many contractors are preparing and positioning themselves in leading up to the bidding process."
Lusail City is planned to have marinas, residential areas, island resorts, entertainment and commercial districts, a golf course and five stadiums. The World Cup final will be held in a venue north of the city. Most of the city's land has been sold to private developers from the Gulf.
The main indexes for Qatar and Dubai finished in positive territory yesterday after HSBC said shares from the two places had been excessively punished by investors in response to political protests in the Mena region.
The IMF projects Qatar's economy will grow 18.6 per cent this year. The Qatari government has said it expects GDP will grow 21 per cent, compared with 16 per cent last year.