Dubai's troubled firms return to profits

Three of stock-listed heavyweights in Dubai from the sectors of construction, investments and banking which were once hit badly by the global financial crisis swung back into profits in the second quarter of the year thanks to an economic rebound in the Gulf Arab region. On Thursday, Arabtec Holding said it earned 105 million Dirham (28.63 million dollars) in the period from March to June 2013, up from a loss of 7 million Dirham (1.908 million dollars) in the same period last year. The biggest construction firm in the United Arab Emirates (UAE) said it swung back into the black thanks to a "strong performance in its Saudi Arabia and UAE operations." The International Monetary Fund expects the Gulf Arab region's economy to grow by 3.2 percent in 2013 given the constant high oil prices and because of ample investments into infrastructure and economic diversification. Arabtec's half-year net income hit 204 million Dirham (55.61 million dollars), up 119 percent year on year. Earlier in the week, Gulf General Investments Company (GGICO), reported a net profit of 25.47 million Dirham (6.94 million dollars), up from a loss of 47.5 million Dirham (12.95 million dollars). GGICO, which has stakes in dozens of industrial and retail firms across the region recorded the profit amid lower turnover and could only return into the black as it disposed interest in former subsidiaries. For the UAE's oldest investment bank Shuaa Capital, the strong gain of the Dubai stock market in the first six months was a blessing, as well as the growing financing needs among smaller and medium-sized enterprises (SMEs). Shuaa said earlier this month its net profit for the second quarter reached 1.3 million Dirham (345,000 dollars), up from a loss of 5.9 million Dirham (1.60 million dollars) in the first quarter of 2013 and a loss of 15.9 million Dirham (4.33 million dollars) in the corresponding period last year. Shuaa, founded in 1979, slashed costs by making scores of employees redundant in recent years and through increasing its loan business with SMEs in the Gulf region. Its brokerage division for institutional benefited from the stock market rally in Dubai, which sent the market index over 60 percent higher in the first six months of 2013. In June, global index developer MSCI upgraded the UAE to Emerging Market status from Frontier Market, a move which attracted ample interest from fund managers covering emerging market shares in their portfolios. At Dubai's local stock exchange DFM, however, the three market heavyweights performed very mixed. While Arabtec underperformed by gaining 2.68 percent in the last 12 months, GGICO surged 70.35 percent and Shuaa Capital gained 13.95 percent in the same period of time.