Credit Suisse cuts DSI, Arabtec target
Dubai, September 8, 2011
Credit Suisse cut its price target on Dubai's Drake & Scull International (DSI) and Arabtec citing lower margin estimates and a slump in contract awards for the companies.
Property prices in Dubai have been under pressure since late 2009, when the financial crisis and a drop in oil prices ended a six-year economic boom in the Gulf region.
The brokerage cut its share-price target to 1.26 dirhams from 1.3 dirhams for contractor DSI and to Dh1.34 from Dh1.47 on Arabtec, the largest builder in the UAE by market value.
Credit Suisse said it maintained its preference for DSI over Arabtec on the back of strong backlog growth for DSI, compared with stalled growth and declining profitability for Arabtec.
Arabtec's second-quarter net profit fell 74 per cent, missing analysts' forecasts.-Reuters