DUBA: Shares in Dubai construction firm Drake & Scull surged to an all-time high on speculation that the firm might become a takeover target, while earnings optimism lifted United Arab Emirates markets in general on Tuesday. Other Gulf bourses were flat to higher in thin trading.
Drake, which specializes in mechanical work, engineering and plumbing, gained 8.4 percent. It has risen 64.8 percent year-to-date, partly on talk that that a strategic investor could buy a major stake, with builder Arabtec viewed by analysts as a possible buyer.
Drake did not immediately respond to a request for comment, while an Arabtec spokesman could not immediately be reached for comment. In May, Drake's Chief Executive Khaldoun Tabari, who owns about 44 percent of the company directly and through other firms, said he had no plans to sell his stake.
Dubai's benchmark climbed 0.5 percent to a near five-year high, extending its 2013 gains to 57.9 percent.
"Dubai's index is in overbought territory but bullish sentiment on earnings is driving it higher," said Mohab Maher, senior manager of the institutional desk at MENA Corp. Key stocks have broken technical resistance levels but the market could soon witness a pullback, he added.
In Abu Dhabi, the index advanced 0.7 percent, its 13th consecutive rise. Heavyweight telecoms operator Etisalat gained 1.3 percent, the main support for the bourse.
Etisalat, the largest firm by market value, said it was boosting its interim dividend by 40 percent and posted a 6 percent rise in second-quarter net profit after royalties, roughly in line with forecasts.
It also confirmed it had entered exclusive talks with Vivendi to buy the French firm's 53 percent stake in Maroc Telecom for 4.2 billion euros ($5.54 billion), a deal which would be Etisalat's largest acquisition to date if completed.
However, trading was thin in the stock, since ownership is limited to UAE citizens.
In Doha, lender Masraf Al-Rayan rose 1.3 percent after posting a 13.3 percent increase in second-quarter earnings. It made a net profit of 421 million riyals ($116 million), slightly beating an average analyst forecast of 414 million riyals.
Qatar's measure gained 0.2 percent to 9,672 points, a fresh 58-month high. The index is approaching major psychological resistance at 10,000 points.
Elsewhere, Kuwait's bourse gained 0.1 percent to a four-week high despite its largest firm by market value posting below-forecast earnings.
The retail-dominated market is up 35.6 percent in 2013 on expectations for better earnings as the government moves ahead with big infrastructure projects.
"The market is above the 8,000 psychological barrier ñ there is an overwhelming consensus the government will soon invest in the economy and kick-start development projects," said Fouad Darwish, head of brokerage at Global Investment House.
A longstanding power struggle between the government and parliament has held back economic development plans. Parliamentary elections are set for Saturday and analysts expect members to be mostly pro-government, with a new voting system decreed by the emir still in place despite opposition challenges.
Drake & Scull stock hits record high
