17-04-2025
Union Properties' share surges to be UAE's best forming - as markets stay flat
Dubai: Union Properties' stock has shot up an eye-catching 40% since the start of the year to date, easily making it the best-performing share on the DFM but the wider UAE capital markets. In fact, in recent days, the Dubai developer's share gained 20% plus before trimming some of the increase.
In comparison, the wider DFM is down 0.4% year-to-date, while the ADX general index is flat. Which makes Union Properties' surge all the more of an outlier. 'Emaar Developments is down for the year after an exceptionally strong showing in 2024, while Aldar on ADX has gained 12% year-to-date,' said an analyst. 'It's pure sentiments that seems to be driving UP's share for now – but it's making for an unprecedented run.'
Especially when stock market sentiments have been largely muted in the UAE and GCC as investors weigh in what the Trump tariffs on nations and economic blocs would actually mean. The US stock markets have given their response, heading down into correction territory and investors getting spooked.
UP's stock is at Dh0.57 against the Dh0.59, which is the 52-week high.
The developer is yet to issue any statement on DFM to give its views on why the stock has shot up. Union Properties has in the recent past launched its first project in some time, at Motor City, and also got a firmer grip on its debt exposures. On the 2024 financials, the company inched its way to some health after 3-4 years of underperforming and leading to sizable losses.
On the operating profit side for 2024, UP reported Dh161.8 million – and that came about from an impressive 59% gain.
Capital reduction
At the time, the company said it will proceed with the necessary approval to cut its accumulated losses in full through a capital reduction.
'This step will further conclude the recovery phase of the company, ensuring a robust and clean capital structure that will enable distribution of dividends in the future,' said a statement by UP.
According to analysts, UP's management seem to be winning over investors through its recent actions in tackling - and overcoming - its losses over the years.
"The best part is that the company is back to launching projects, that too in the mid-income focused residential space," said an analyst. "UP has done a good job in developing Motor City as a destination and the new launch fits right into that narrative."
Will UAE stock markets see a bounce?
A lot rests on when UAE's flagship airline Etihad decides to go ahead with the planned IPO. The Abu Dhabi company has not made any formal announcement on a likely timeline, but the markets have been abuzz about the possibility for weeks now.
"That would be a blockbuster as and when Etihad decides to catch the flight to ADX," said an analyst. "For now, there is still much to cheer about the other IPO that came out this year - Alpha Data on ADX. The stock had a decent first day bounce and is still in positive territory.
"It shows fairly priced IPOs will perform well on the subscription side and sustain the momentum on listing."
