Emaar shares fall on losses

Bloomberg

The largest real-estate developer in the United Arab Emirates on Feb. 12 reported an unexpected loss for the fourth quarter because of writedowns at its U.S. unit and falling prices at home. The net loss was 1.77 billion dirhams ($481 million) compared with a profit of 1.74 billion dirhams a year earlier.

"Emaar has shown a very dismal performance, and investors were not expecting losses of this magnitude," Vyas Jayabhanu, head of Al Dhafra Financial Brokerage, said in an interview yesterday from Abu Dhabi. "There should be some more selling pressure with stock bottoming out at around 1.5 dirhams."

The shares lost 10 fils, or 5 percent, to 1.9 dirhams at 11:14 a.m. in Dubai trading yesterday. The stock has declined 16 percent this year after plunging 85 percent last year.

Emaar reduced the value of California-based John Laing Homes, the U.S. unit, by a total of 2.52 billion dirhams last year to reflect a slump in the real-estate market. Emaar bought John Laing for $1.05 billion in 2006.

In Dubai, property prices dropped 25 percent from their September peak as banks reduced lending and speculators left the market because of the global financial crisis, Morgan Stanley said on Feb. 2.