Real estate and construction stocks drive UAE markets' rally

source Gulf News

Dubai: UAE markets rallied on Thursday with real estate and construction stocks leading the surge. Dubai Financial Market index climbed 2.73 per cent to 1,924.01.

Emaar was the biggest gainer of the day, leaping 5.78 per cent rise to Dh3.30, regaining most of Wednesday’s losses while Union Properties rose 3.60 per cent to Dh1.15.

Arabtec gained 5.47 per cent to Dh2.89, while Dubai Islamic Bank rose 2.35 to Dh2.61.

Abu Dhabi rose 1.6 per cent, its largest gain for a month, closing at 2,867. Real estate led the gains in the market, rising 3.67 per cent. Aldar climbed 4.95 per cent while energy giant Abu Dhabi National Energy Company (Taqa), jumped 6.83 per cent.

Dubai property giant Emaar says reviewing jobs

original source Reuters

Dubai's Emaar Properties , the developer behind the world's tallest tower, said on Thursday it was reviewing its jobs policy in light of the global financial crisis after other developers shed jobs.
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'It is now crucial that we use efficiency and maximise productivity, which includes revisiting our recruitment policies and optimising human resources,' Emaar said in a statement responding to a Reuters question on potential job cuts.

Emaar, the Gulf Arab region's largest property developer by market value, said it would it would look to reorient its growth strategies to 'tackle new realities.'

The company did not give further details on the extent of the job review or specify if any jobs would be cut.

Emaar shares, down nearly 80 percent this year, were down 5.04 percent to 3.19 dirhams a share at 0902 GMT.

'This will help the company ... as it will save on overhead costs,' said Hamood Abdulla al-Yasi, general manager at Emirates International Securities. 'That is their intention and they are not the first ... They are adapting to the bad situation.'
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Emaar is 32 percent owned by the Dubai government.

The United Arab Emirates faces a slowdown in loan growth and real estate activity as it grapples with the fallout from the global financial crisis.

Emaar's possible cuts come after Damac Holding, Dubai's largest property developer, said on Tuesday it would axe 200 jobs due to the worsening global outlook and expectations the emirate's thriving real estate sector may have hit its peak.

Omniyat Properties, another Dubai-based developer, will also make redundancies as it rethinks the timing of new project launches, The National reported earlier on Thursday. Citing sources close to the firm, it said Omniyat would cut 60 jobs.

NO CUTS IN ABU DHABI

Abu Dhabi's top two developers by market value Aldar Properties and Sorouh Real Estate, both said they planned no cuts due to a healthy pipeline of projects.

'No way, not a single job cut,' Ousama Ghanoum, spokesman at Aldar, told Reuters. 'The company has lots of commitments and projects to develop with tight deadlines,' he said adding the firm behind Formula 1's newest track was still looking to hire.

Gurjit Singh, chief property development officer at Sorouh echoed those sentiments, saying there was 'no slowing down and no job cuts.'

Lloyds TSB (nyse: LYG - news - people ) Middle East said in a statement on Monday that it had stopped granting mortgages for apartments in the UAE and would require a 50 percent down payment for villas due to 'exceptional market conditions'.

Emaar Dubai Chief Executive Issam Galadari told Reuters last Friday it was giving customers more time to repay mortgages.

Galadari said liquidity constraints at local banks had exacerbated the problems of securing home finance.

Mohamed Alabbar, Emaar's chairman, said earlier this week that growth in the emirate's real estate sector could slow to 9 percent from 13 percent due to the global downturn and that the Gulf's commercial hub had set up a committee to boost confidence in the real estate market.

Emaar, which according to its website has developments beyond Dubai in excess of $65 billion, operates in the Middle East, North Africa, Pakistan, India and the United States.

Emaar’s 3Q profits decline 3.2%

source The National

Dubai-based Emaar Properties, the Middle East’s largest publicly traded property developer, saw its third quarter profit fall three per cent from one year earlier as a result of a drop in revenue.

Net income fell to Dh1.51 billion (US$411.1 million), or Dh0.25 per share, in the three months ended Sept 30 compared with Dh1.56bn, or Dh0.26 per share, a year earlier. Revenue fell by five per cent – to Dh4.319 – compared with the third quarter of last year, the company said yesterday in a statement on the bourse website.

Higher revenue from its Dubai operations, which account for more than 80 per cent of Emaar’s revenue, were offset by a fall in revenue from John Laing Homes, the California-based home builder which the developer acquired for $1.05bn in June 2006 at the peak of the US housing market.

Emaar wrote down Dh750m related to John Laing Homes in the third quarter, compared with a write-down of Dh165m in the preceding quarter.

Net profit fell nine per cent in the third quarter compared with the second quarter, and net operating profit increased 36 per cent to Dh2.258bn in the same period.

Third quarter revenue was up 1.9 per cent from the second quarter, mainly on domestic property sales.

“Overall, people were happy with the results, as they expected some kind of decline in the revenue compared to the second quarter,” Ayman al Saheb, the director of operations at Darahem Financial Brokerage, said.

“I expected they would have bigger write-downs with regards to the investors in the US, the JL [John Laing] Homes position. But the liquidity crunch happened towards the end of the third quarter. So I believe that the fourth quarter will show the proper impact, if any, on the company with regards to what’s happening on a global basis.”

“Barring write-downs, Emaar earnings are pretty impressive,” Robert Mckinnon, the managing director of equity research at Al Mal Capital PSC, told Bloomberg. “Going forward it’ll be a tough operating environment for real-estate companies although Emaar may weather it by enhancing its recurring revenue in Dubai.”

Another issue concerning Emaar is the company’s expected share-buyback scheme that it announced in September. Emaar said it would begin to buy back its shares three days after its third quarter disclosure was issued yesterday.

The company’s share price has fallen 62.7 per cent year this year. Its stock dropped more than 28 per cent this month alone.

Emaar’s chairman, Mohammed Ali Alabbar, said he was “very confident” of the company’s fundamentals and future growth.

The company’s projects in Dubai include six hotels, a theme park and 1,200 apartments as part of the Las Vegas-style Bawadi project in the desert outside the city.

Emaar Properties, whose portfolio is estimated to be worth Dh367bn, is less than a year away from completing the Burj Dubai tower, which was officially recognised as the world’s tallest building this September.

In domestic operations, a highlight of Emaar’s expansion was the completion of The Address in the downtown Burj Dubai area, the first hotel under The Address Hotels & Resorts brand owned and operated by Emaar Hospitality Group.

Emaar is also developing The Dubai Mall, which will become the world’s largest shopping and entertainment mall when it opens on Oct 30.