The benchmark stock index gauge of Abu Dhabi, the ADX General Index has increased by 1.1% and is currently at 2968.54, marking its best figure since November, 2009. The stocks were hugely helped by the fact that two of the biggest real estate companies of the Emirates will meet in this week and vote on a possible merger.
Aldar Properties PJSC and Sourouh Real Estate Co. were the most traded companies in the gauge and the two has confirmed to sit on 21st February to discuss on the possible combination. The merger was already approved in January and since then; a lot of selling has happened. Incidentally, on 21st January, the board members of Aldar approved a plan for offering 1.288 shares for each of the Sourouh stocks for making the Government backed acquisition possible. Incidentally, this will make the joint company the third largest publicly traded developer in the entire Middle East. The share prices of Aldar since then have declined by 14%, whereas, Sourouh has been able to post a gain of 8%. According to investors, this merger will help the smaller of the two developers more.
On today, the stock prices of Aldar climbed the most since 8th January, as it posted gains of 5%. Each share of Aldar is currently priced at 1.47 Dirhams. On the other hand, Sourouh shares increased by 2.9%, marking its biggest gain since 23rd January. Incidentally, one share of Sourouh currently costs 1.76 Dirhams. On today, more than 58 million of the Aldar shares were traded, around thrice of the daily average of last 3 months.
According to the investors, this combination marks an attempt of the Abu Dhabi authorities to revive the property market as the same tumbled by 50% during a crash in the United Arab Emirates. In 2012, the profits of Aldar doubled, whereas Sourouh saw an advance of 32%.
Among the other members of Gulf Cooperation Council, Saudi Arabia’s benchmark stock gauge Tadawul All Share Index went down by 0.2% after rallying for 6 straight days. The benchmark gauge of Kuwait, QE Index, on the other hand, tumbled by 0.1%, whereas, the MSM30 Index of Oman was more or less unchanged. DFM General Index of Dubai declined by 0.2%, however, the measure of Bahrain, posted increase of 0.3%. The benchmark gauge of Egypt, EGX 30 Index declined by 0.4%.