Emaar's stock tends to move in tandem with the wider stock market. Gabriela Maj / Bloomberg News
Emaar's stock tends to move in tandem with the wider stock market. Gabriela Maj / Bloomberg News

S&P gives Emaar a welcome boost



Whether the problem is declining profits or potential political trouble overseas, investors in Emaar Properties have had little to shout about recently.

Even the Burj Khalifa, the developer's most famous project, is facing a looming challenge from Jeddah's Kingdom Tower for the title of the world's tallest building.

But signs of improvement can still set pulses racing. The developer, based in Dubai, became the most traded stock in the Emirates yesterday after Standard & Poor's upgraded its outlook on the company.

The ratings agency raised its outlook for Emaar's "BB" rating to "stable" from "negative", causing the stock to rise 0.3 per cent to Dh2.77 on the Dubai Financial Market General Index.

"The stable outlook reflects our opinion that Emaar's relatively stable leasing activities, accounting for over half of total earnings in first-half 2011, and an improving performance of hospitality activities balance uncertainties in international development activities," S&P said in a report.

But caveats remain, not least of which is that Emaar's profits are closely linked to the strength of the local economic recovery, S&P said.

The developer's expansion into countries such as Egypt to diversify away from Dubai's downturn has also brought political risks in the aftermath of the uprisings in parts of North Africa and the Middle East this year.

"We consider that Emaar is pursuing an aggressive international growth strategy in markets where it lacks a track record and it is significantly exposed to markets subject to political risk," the report said.

"Mitigating these weaknesses are the increasing earnings contribution from more stable property investment and hospitality activities, the good track record and high quality of rental assets in Dubai, and geographical diversification of the development businesses."

Emaar's stock tends to move in tandem with the wider stock market and has long been favoured by international investors.

For that reason, any sign of revival in the world economy should quickly benefit Emaar.

The company reported a profit of Dh249.9 million for the second quarter, a decline of 68.8 per cent on the same period last year.

Analysts polled by Bloomberg News said they expected Emaar to report a profit of Dh307m for the third quarter, about half of last year's bottom line.

Du Plessis plans his retirement

South Africa captain Faf du Plessis said on Friday the Twenty20 World Cup in Australia in two years' time will be his last.

Du Plessis, 34, who has led his country in two World T20 campaigns, in 2014 and 2016, is keen to play a third but will then step aside.

"The T20 World Cup in 2020 is something I'm really looking forward to. I think right now that will probably be the last tournament for me," he said in Brisbane ahead of a one-off T20 against Australia on Saturday. 

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Joker: Folie a Deux

Starring: Joaquin Phoenix, Lady Gaga, Brendan Gleeson

Director: Todd Phillips 

Rating: 2/5

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Company: Instabug

Founded: 2013

Based: Egypt, Cairo

Sector: IT

Employees: 100

Stage: Series A

Investors: Flat6Labs, Accel, Y Combinator and angel investors


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