Abu Dhabi-listed Waha Capital, whose shares had surged ahead of a $1.5 billion bond issue, reported a 90-per cent decline in second-quarter profit on Sunday as earnings in invested firms slumped.

Waha, which is involved in real estate and leasing for the oil and aviation sectors including deals for military planes for the UAE Armed Forces, reported a profit of 5.99 million dirhams ($1.63 million), down from 54.5 million a year earlier.

Profits from equity accounted investees, a reference to where Waha holds a significant stake in others, fell by more than half to Dh20.67 million. The stock was down 3 per cent at 0852 GMT, having been up as much as 6 percent in early trade.

It had gained more than 19 percent in the previous three sessions since early price guidance indicated a 10-year benchmark bond for unit Waha Aerospace would be priced at 225 basis points over 5-year US Treasuries, with the issue expected to raise about $1.5 billion.

The Abu Dhabi governement holds a 15 per cent stake in Waha, according to Reuters data, and has unconditionally backed the bond.

"The headline (profit) number is quite weak, but the stock has rallied on the back of its bond issue, which is significant fundraising for the company," said Ali Khan, managing director and head of brokerage at Arqaam Capital.

"To get a 10-year bond away at this price is not bad," he added.

The firm's revenues for the three months ending June 30 were 76.7 million dirhams, down 20 per cent.-Reuters