Dubai: The Emirates Securities and Commodities Authority (ESCA), the country's stock market regulator, has instructed the Dubai Financial Market (DFM) to demand a full explanation from Emaar Properties on its reported agreement with Kingdom Holding, according to a report by WAM news agency.
On Sunday evening, Emaar denied reports that it would be developing Kingdom Holding's Dh100 billion project.
This project would encompass the tallest tower in the world and surpass Emaar's own project, Burj Dubai. Kingdom Holding had made an announcement on Saturday night. Emaar, however, did say that it would be providing management services for the project.
The ESCA has asked for more details of the agreement. These details include the type of agreement, its value and its anticipated impact on Emaar's revenues.
In a statement issued yesterday, the regulator stressed that all listed companies were obliged to disclose any information about their status and activities.
Emaar's stock yesterday closed 5.74 per cent lower at Dh3.94 after surging 7.18 per cent to Dh4.18 on news of the contract in Jeddah.
"That shows that they were involved in it [project] but later, maybe due to some reasons, it would not have gone through and they just simply denied it at a later stage. "The delay from Emaar's side definitely creates some doubts," a market analyst told Gulf News.
Emaar declined to further explain the statement to Gulf News when reached for comment. "They should have acted sooner. It was a question on our minds. It gave a negative sentiment for traders," said a DFM trader who requested anonymity.
Meanwhile, Haissam Arabi, CEO of Gulf Mena Alternative Investments, commended Emaar for releasing the information. "For them [Emaar] to come out [with a statement], actually shows good governance that they've reacted to it so that people are not misled," Arabi said.
However, he said that it was not in Emmar's best interests for its stock to take a beating as it did yesterday. The UAE and Saudi government officials held talks in Riyadh yesterday to diffuse a situation on the border where a massive pile up of trucks created 25 kilometre trail in what has been referred to as a mere customs issue, days after the UAE withdrew from the GCC Monetary Union.
