Arabtec Holding Co., (ARTC) the biggest listed construction contractor in the United Arab Emirates, gained after the company announced plans to build 1 million houses in Egypt.
The shares climbed as much as 3.5 percent before paring the increase to 1.7 percent to 4.88 dirhams at 10:46 a.m. in Dubai, Bloomberg reported on Monday. Arabtec yesterday struck an agreement with Egypt’s Defense Ministry to build affordable houses with a total value of 280 billion Egyptian pounds ($40 billion), according to an e-mailed statement from Arabtec yesterday.
“This is positive news for Arabtec, and gives the group a favorable footing in Egypt given the U.A.E.’s support for the interim government,” Nayal Khan, head of institutional sales and trading at Naeem Holding in Dubai, said by e-mail today. Arabtec is the “latest channel” through which the U.A.E. is directing aid to Egypt, and the project adds substantially to the contractor’s backlog, he said.
The U.A.E, Saudi Arabia and Kuwait have pledged billions of dollars in aid for Egypt since the ouster of President Mohamed Mursi in July. The housing project would be the largest in the Arab world and is expected to provide jobs for more than one million Egyptians, according to the statement.
Full-year profit at Arabtec, which helped build Dubai’s Burj Khalifa, the tallest tower in the world, will more than double to 313 million dirhams ($85 million) in 2013, according to the mean estimate of 11 analysts on Bloomberg.