Dubai: The Union Properties share price has come under intense pressure from start of trading on Wednesday (November 10) as investors mulled over the detention of the developer’s chairman.
The share price was down by more than 9 per cent and within touching distance of the 10 per cent ‘circuit-breaker’, which would have immediately brought a halt to trades in the stock. By 10:40am, the UP stock had touched volumes well over 112.91 million to a 30 fils a share. It was felt at the time that touching off the circuit-breaker was just minutes away. (Stock exchanges have circuit-breaker rules to ensure that stock prices do not have sharp swings either way. So, upper and lower limits are set, and if the share price breaches that, the stock trade is halted for a while.)
After the initial steep drop, the share is going through a relatively quieter phase, trading between 4.92-6.15 per cent lower. The UP stock was not trading on Tuesday because of the Board of Directors’ meeting on the day.
Hit on multiple fronts
The news of the UP chairman’s detention came just days after it was revealed that he along with other board members were under federal investigation over the way certain assets of the company were disposed last year. Investigations are ongoing and UP shareholders will be watching and analyzing every detail that emerges.
The developer’s financials were on the mend in recent quarters, and UP also had made progress on restructuring its debts. A deal was reached with Emirates NBD last year to refinance a near Dh1 billion exposure.
“The stock prior to recent events was up 16 per cent this year and had a market cap of $380 million,” said Vijay Valecha, Chief Investment Officer at Century Financial. “The future of the company and the stock will be determined based on the possibility and severity of the financial frauds that might have occurred.”