DUBAI: Dubai’s bourse suffered its largest loss in a month yesterday as investors sold blue chip Emaar Properties in a delayed reaction to the prospect of dilution from a convertible bond. Other regional markets were narrowly mixed.
Emaar dropped 3.3 percent to Dh7.14 a day after the company said it would discuss today whether to convert the bond into shares, after bond holders asked for the conversion. The developer issued a $500m convertible bond in 2010, with maturity in 2015.
However, if full conversion takes place at Dh4.38 per share, there should only be a slight dilution of 2.2 percent in the stock price, analysts at NBK Capital estimated in a note.
“Emaar has been going up too fast and if the dilution provides a break in that, it’s not a bad thing,” said Sanyalaksna Manibhandu, senior analyst at NBAD Securities. The stock is up 90.4 percent year-to-date.
Manibhandu also said an early bond conversion would be beneficial for Emaar by allowing a reduction in the firm’s interest payments. The bond has a coupon of 7.5 percent.
NBK put Emaar’s fair value at 6.88 dirhams, a minimum estimate since two new developments now underway are not included in the calculation. Dubai’s index lost 1.6 percent, falling from Sunday’s five-year high.
Qatar Exchange ended in the red area when trading closed at 10,475.39 points (0.49 percent) down 51.56 points from the previous closing of 10,526.95 points on Sunday.
The volume of shares fell to 9,706,992 from 10,292,912 on Sunday and the value of shares decreased to QR354,119,566.66 from QR463,037,080.71 on Sunday.
Among the top losers were Qatar Islamic Bank (down 1.55 percent to QR69.70), Industries Qatar (down 0.88% to QR168), Electricity and Water (down 1.24 percent to QR167.40) and Vodafone Qatar (down 1.04 percent to QR11.40).
The Banking and Financial sector index lost 0.11 percentage points while Consumer Goods and Services sector index fell 0.27 points. The industrial sector dropped 0.50 points while insurance sector was down 0.09 percentage points.
In Kuwait, the index climbed 0.2 percent from a 10-week low to close at 7,656 points, holding major technical support on its 200-day average, now at 7,648 points.
The market, which has been underperforming the region in recent months, showed little reaction to progress on one of the major projects in the government’s economic development plan. National Bank of Kuwait said the country was set to secure $1.43bn in financing from a consortium of banks for the Az-Zour North Power and Desalination Plant.
Elsewhere, Saudi Arabia’s market remained sluggish overall with the main index slipping 0.1 percent as most banks and petrochemical shares weighed. But insurance stocks surged, with Saudi Re up 8.1 percent, as short-term traders turned to that sector in the absence of other cues.
Rabigh Refining and Petrochemical (PetroRabigh) soared 9.9 percent for a second session to a 19-month high, after the firm said it expects 2013 revenues to rise by almost SR1bn ($267m) as its parents boost their marketing support for its products.
In Oman, Dhofar International Development & Investment Holding rose 1.3 percent after it said it had received board approval for the purchase of a 35 percent stake in Oman Investment & Finance, subject to regulatory approval. OIF gained 2.8 percent, outperforming the overall market which climbed 0.4 percent.QNA/Reuters
