Abu Dhabi:

Construction giant, Arabtec Holding, was suspended from trading on the Dubai Financial Market (DFM) on Thursday amid reports that Aabar Investments is set to increase its stake in Arabtec.

According to a statement released on the DFM website, Arabtec shares were suspended “awaiting clarification from the company on media reports about strategic partners’ stake as per Securities and Commodities Authority’s [SCA] instructions.”

Aabar, currently the second-biggest investor in Arabtec, is said to buy at least half of a 28.9 per cent stake owned by former chief executive officer, Hassan Ismaik. The former CEO, who resigned in late June, remains the largest investor in the company.

Neither Arabtec nor Aabar commented on the issue. However, Arabtec Chairman, Khadem Al Qubaisi, had said on July 2 that Aabar may be increasing its holding in the company.

Saleem Khokhar, head of equities at the National Bank of Abu Dhabi asset management group, said the suspension is likely to push other companies to disclose more information, and keep up their transparency with shareholders.

“It’s probably more of a safe thing to come as we move forward. I think it’s probably due to the seriousness that [Arabtec] has been showing. I think there will be tighter regulations coming,” he said.

Khokhar added that expected the suspension to last for a short period without specifying a time frame.

“I don’t think [the suspension] is going to have a negative impact on trade on DFM. I think [Arabtec] was suspended for a reason, and that will become quite clear very shortly. [The trade volume on Thursday] shows that the market is fine even without Arabtec,” he said.

On Wednesday, Arabtec share prices rose 1.9 per cent to reach Dh4.95. This brings up share gains to 67.7 per cent since the beginning of July.

The suspension of Arabtec comes exactly 10 days after SCA announced it would tighten supervision of stock markets to avoid a market crash similar to the one in June. As part of the process, SCA said it would form a committee to review steep market movements, and monitor company statements to ensure transparency.

The decision to tighten regulations was hailed by analysts who said that the volatility on DFM requires monitoring and vigilance from the market regulators.

- With inputs from Bloomberg