Shares in Dubai's Arabtec tumbled on Thursday to a six-week low on fears of a significant shares dilution after company plans of raising $1.8 billion in capital. Gulf markets were mixed, while Egypt's measure extended losses. Arabtec will issue 3.2 billion shares at 1.5 dirhams per share, a near 50 percent discount to its current market price. The capital hike amounts to a more than 50 percent increase in its market capitalisation.
It's shares slumped 9.8 percent to 2.67 dirhams, its lowest close since January 16. Trading was thin as the stock hit its maximum permitted daily decline early in the day - allowing no further sell orders to be processed.
"Potential support of the 200 daily exponential moving average is around 2.63 dirhams, which co-ordinates nicely with the 50 percent retracement at 2.625 of the uptrend begun at the beginning of this year," said Bruce Powers, a technical analyst and corporate advisor at Orpheus Capital.
On Nasdaq Dubai, shares of Depa surged 11.4 percent after Cario-based EFG-Hermes said Arabtec is likely to use funds from the capital hike to take over the interiors contracting firm. Arabtec, which acquired a 23.4 percent stake in Depa in November last year, will purchase the remaining 465 million shares in Depa that it does not currently own, analysts Jan Pawel Hasman and Shaza El Kady said in the note.
Dubai's benchmark shed 0.6 percent, continuing its sideways trading as it struggles to break through the 2,000 key psychological level. Elsewhere, Cairo's measure fell 0.5 percent, down for its fifth consecutive losing session as weak earnings weighed on sentiment already downbeat on political concerns ahead of parliamentary elections.
Ezz Steel slipped 0.8 percent after the country's largest steel producer swung to a loss in the third quarter. Meanwhile, Kuwait measure climbed 0.3 percent to its highest close since May 2012. Kuwait is up 8.9 percent year-to-date but recovering from an eight year trough it hit in November last year.
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