By: Mahmoud Gamal

Dubai – Mubasher: UAE stock markets are currently lacking in transparency, Marie Salem, capital markets director at FFA Dubai, told Mubasher, citing the recent sharp drop seen on Drake & Scull International’s (DSI) stock and the ongoing mystery behind it.

Although DSI, which is listed on the Dubai Financial Market (DFM), announced two weeks ago that it had no exposure to crisis-roiled Abraaj Group, its stock continued to fall.

In June, The Abraaj Group filed for liquidation and is currently undergoing a massive restructuring after announcing money misuse at its $1 billion healthcare fund.

DSI’s announcement indicates that the company is safe from a financial perspective, Salem said, noting that the movements and strong selling seen on the stock were unjustified.

DSI and the Securities and Commodities Authority (SCA) need to intervene and ensure transparency so that the company may overcome this phase, the analyst highlighted.

Over the past month, DSI’s stock tumbled by nearly 40% and up to 66.68% of its value since the start of the year.

Ajman Bank more than halved its stake in DSI to 13.06% from 28.57% by the end of trading on Thursday, while individual shareholder Adel Abdelhamid Ibrahim Abdullah Al Huweisny reduced his stake to 5.61% from 5.98%, data published on the DFM showed.

As for The Abraaj Group and the ongoing exposure announcements, Salem advised investors to remain cautious when trading, particularly those whose investments are in the banking sector.

We are still waiting on banks to disclose their exposure to Abraaj whether in terms of loans or banking guarantees, she told Mubasher, stressing the need to unveil any ties to the group ahead of the period for disclosing first-half financial results.

Translated by: Nada Adel Sobhi