Amlak Finance shares soared to new heights yesterday after the Islamic lender announced it was in discussions with Emaar Properties about a partnership to develop land.
In an interview with the Arabic-language Al Khaleej newspaper posted yesterday morning on the Dubai Financial Market’s website, the Amlak chief commercial officer Adnan Al Awadhi said the company was in talks with Emaar, its largest shareholder, over working together to develop land in key locations, in collaboration with Dubai Land Department.
Mr Al Awadhi said the lender and Emaar were working to find ways to restart a number of stalled projects, and that agreement was close on one particular project.
Amlak and Emaar did not respond to requests for further comment about the proposed partnership.
The lender’s shares surged on the news, closing up 14.6 per cent at a new high of Dh2.58. A total of 321 million shares changed hands, its second-busiest day of trading since being restored three weeks ago.
“News of this sort is a positive indicator for the shares’ main support block, namely UAE-based retail investors,” commented Julian Bruce, the head of institutional trading at EFG Hermes in Dubai, a leading investment bank in the Mena region.
“However, given that Amlak is 45 per cent owned by Emaar, it shouldn’t come as a major surprise that there would be a joint venture between the two. I don’t think it should be a reason to move the stock up again, as it shouldn’t come as a surprise.”
Mr Al Awadhi said that Amlak owned 4.3 million square feet of land, together with 364 housing units across areas of Dubai including Warqa, Mirdif, Khawaneej and Meydan.
The company has plans for four developments across its holdings and has already received the necessary approvals to begin projects in Mirdif and Warqa.
“Whether this will result in financial gain for the company will only become clear over the medium term,” said Muhammad Shabbir, the head of equity funds and portfolios at Rasmala Investment Bank in Dubai.
“Any business that it’s announcing is positive, but how it will release the land and the properties, and what impact it will have on their bottom line remains to be seen.”
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