Amlak shares end flat after wild return to Dubai trading

After a session marked by wild price fluctuations, shares of the Dubai mortgage lender ended unchanged on its first day of trade following a hiatus of more than six years.

Amlak Finance, the most heavily traded stock on the Dubai Financial Market yesterday, closed at Dh1.02 after falling as low as 75 fils and rising as high as Dh1.11, defying analyst predictions of “a bloody day for the stock”.

Traders said institutions were doing most of the selling while speculative individual customers were doing most of the buying.

They said the shares of the Islamic lender were poised for more volatility in the coming days and weeks as investors tried to gain more clarity on the future of the once embattled company.

“Mainly we saw big retail interest and more institutional selling,” said Hani Konquar, a Dubai-based senior equity sales trader for the Middle East and North Africa at Mubasher Financial Services.

Retail investors “were buying and the institutions were mainly selling”, he said. “These were institutions that had been locked in for several years and wanted to get out.”

Normal statutory trading limits, which require the suspension of shares that rise or fall by more than 15 per cent in a single session, were not triggered during Amlak’s first trading day since 2008.

Some 202 million shares of Amlak changed hands, comprising more than 30 per cent of total trade on the Dubai Financial Market, traders said. Shares of Emaar Properties, the Dubai-based property developer that owns a 45 per cent stake in Amlak, rose 1.8 per cent.

“This is a significant milestone…providing us with the opportunity to contribute to the Dubai financial market’s overall performance as well as resume full regulatory reporting and compliance. We continue to strive to deliver long term value for our shareholders and we fully intend to adhere to our commitments with our financiers,” said Amlak’s chief executive, Arif Alharmi, in a statement carried by Wam.

The home loan provider was among the biggest casualties of the collapse in Dubai house prices six years ago.

Amlak flirted with default as the 2008 financial crisis hit and home prices plummeted. The bursting of the 2009 real estate bubble hurt both Amlak’s loan book and its property portfolio, leading the DFM to suspend trading in the company’s shares in February 2009.

Amlak completed a restructuring of US$2.7bn worth of debt in August, paving the way for the company’s shares to resume trading.

This month, Amlak reported a 62.5 per cent drop in first-quarter net profit to Dh6 million from Dh16m a year earlier. Revenue fell 15 per cent in the quarter to Dh105m because of its decreasing property portfolio, the company said.

The shares were last traded on November 20, 2008, at Dh1.02 each.

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