Dubai index tumbled the most in the world on Monday after Arabtec published their fourth quarter results, also triggering a sell-off in the previously best-performing mid- and small-cap stocks.
Analysts said the investors took risk off the table in small and mid caps even as Arabtec registered wider-than-expected loss for 2016 and some felt that the Dh1.5 billion capital increase plan won’t be enough to finish off the backlog of the company.
“Markets tumbled after a bigger loss than anticipated (in Arabtec), a capital increase for loss reduction, but the question mark is this Dh1.5 billion enough, so that is why people are taking risk off the table,” said Sanyalaksna Manibhandu, director Research, National Bank of Abu Dhabi Securities.
“Investors sold off some of the shares in which they are not comfortable with especially with the mid-cap stocks that have run-up,” Manibhandu said.
Arabtec shares fell nearly 10 per cent to end at Dh1.19. The Dubai Financial Market General Index closed 1.75 per cent lower at 3,637.55, after falling as much as 3,618.77.
Small cap stocks declined more than large cap stocks. Gulf Finance House closed 3.60 per cent lower at Dh2.68. Drake and Scull fell 10 per cent to end at Dh0.477.
HITS Telecom closed more than 7 per cent to close at Dh0.786. Emaar Properties closed 0.13 per cent lower at Dh7.63.
