The astronomical rise in Tabreed's share price has led to confusion over what is driving intense buying interest in the Abu Dhabi-based utilities firm.
Tabreed, which is also known as the National Central Cooling Company, has seen its stock value gain 427 per cent from its low on January 16 — the company's share price has risen from 40 fils to Dh2.13 in seven weeks — although the reasons behind the surge are unclear.
Several listed companies — including construction firm Arabtec — have experienced significant upwards movement in recent weeks as the Dubai Financial Market continues its bull run. However, such large swings tend to create speculation as analysts and investors look for answers.
"Market rumours hint that Tabreed buyers are similar to Arabtec, with strategic buyers building positions in the company using various entities to stay below the five per cent declaration threshold set by the Securities and Commodities Authority law," Mohammad Ali Yasin, a capital markets specialist based in the UAE, said.