Dubai’s Emaar may be pressured by bond conversion talk

Shares in Dubai’s Emaar Properties may fall after the company said it would discuss whether to convert bonds into shares

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Shares in Dubai’s Emaar Properties may fall on Sunday after the company said it would discuss on Tuesday whether to convert bonds into shares.

Bond holders have asked for the conversion, a bourse statement said without elaborating. Emaar issued a $500 million convertible bond in 2010; the initial conversion price was set at the equivalent of 4.75 dirhams per share, according to the original issue prospectus.

“It will put pressure on the stock but investors will take this opportunity to buy Emaar,” says Mohab Maher, senior sales trader at Mubasher. Heavy buying from foreign investors in recent sessions will partly offset any selling pressure, he adds.

Shares in Dubai’s biggest developer jumped to 7.36 dirhams on Thursday - a 63-month high - after it announced a joint-venture project near the emirate’s 2020 World Expo site.

Also in the United Arab Emirates, Abu Dhabi National Energy Co (TAQA) said it plans to cut staff at its corporate headquarters by 16 percent to 189 as part of a global efficiency drive.

TAQA expects to help save more than $20 million in 2014 from the cuts. This may help buoy investor sentiment and TAQA shares.

Globally, equity indexes slipped on Friday on growing concerns the U.S. Federal Reserve could surprise investors by scaling back its stimulus as early as next week. But Brent crude oil stayed firm at about $108 a barrel.

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