Dubai builder Arabtec, which recently announced a $1.8 billion capital raise programme, is not interested in buying a stake in contractor Drake and Scull, the newly appointed chief executive said on Tuesday.

"No, we are not," Hasan Ismaik told reporters in Abu Dhabi when asked about Arabtec taking a possible stake in Drake.

Dubai's stock market has been trading heavily on stocks of both firms amid rumours of a possible deal.

However, Ismaik said that Arabtec will announce a joint venture with an oil and gas firm in the next few days. He gave no further details.

Arabtec will buy the remaining 40-per cent stake in Target Engineering it does not already own to expand into the oil and gas construction business, two sources with knowledge of the deal said. - Reuters