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Dubai's Amlak Shares Jump after Buyback Plans - ASHARQ AL-AWSAT English Archive
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DUBAI (Reuters) – Shares of Amlak Finance jumped as much as 4.8 percent on Monday after the Dubai-based Islamic mortgage lender said it planned to buy 5 percent of its own stock that has tumbled almost 40 percent this year.

Amlak shares were the biggest gainers in the Dubai index, up 3.23 percent at 0720 GMT, after the lender said in a statement on the Dubai bourse Web site it planned to seek regulatory approval to be able to buy its shares.

Amlak stock has fallen below the fair value target of two of three regional investment banks that started covering the company this year.

“We have confidence in the company and in the expected results, therefore we made the decision to buy back 5 percent of the shares,” Chief Financial Officer Firas Abwah told Reuters by telephone.

Abwah declined to give a fair value target for the stock, which closed at 3.10 dirhams ($0.84) on Sunday.

In April, Egyptian investment bank EFG-Hermes gave a price target for Amlak shares of 4.52 dirhams. In June, HC Securities put the fair value at 3.72 dirhams and Shuaa Capital last month at 2.30 dirhams.

Amlak trades at around 26 times expected 2007 earnings compared with about 19 times for shares of its rival, Tamweel, according to Reuters data.

The firm is seeking permission to operate as an Islamic bank to take deposits from retail customers to meet growing demand in the region for Islamic finance products, especially mortgages, its Chairman Nasser al-Shaikh said last month.

Amlak, which operates in accordance with Islamic law banning the receipt of interest, almost doubled its revenue in the second quarter on gains from investment and property sales.

The lender had posted its second-smallest profit in two years in the first quarter.

Last month, the firm said it planned to sell asset-backed Islamic bonds worth about $260 million to finance expansion, possibly into Jordan and Morocco. As well as in the UAE, Amlak operates in Egypt and Saudi Arabia.

Asharq Al-Awsat

Asharq Al-Awsat

Asharq Al-Awsat is the world’s premier pan-Arab daily newspaper, printed simultaneously each day on four continents in 14 cities. Launched in London in 1978, Asharq Al-Awsat has established itself as the decisive publication on pan-Arab and international affairs, offering its readers in-depth analysis and exclusive editorials, as well as the most comprehensive coverage of the entire Arab world.

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