Dubai mortgage lender Amlak fell more than 12 per cent in early trading this morning, its first trading day for more than six years on the Dubai Financial Market.
Investors flocked to abandon a stock in which they had been “trapped”, according to one analyst, before the stock recovered in choppy trading to be down 2.75 per cent at 10.45am.
Normal statutory trading limits, which require the suspension of shares that rise or fall by more than 15 per cent in a single session, do not apply to Amlak’s first trading day since 2009.
Amlak flirted with default as the 2008 financial crisis hit, and received a government bailout of Dh1.7 billion from the UAE Central Bank and Ministry of Finance in early 2009.
The lender was dependent on short-term loans to fund its book of long-term mortgages, but when Lehman Brothers collapsed in 2008, Amlak found itself unable to tap markets for its financing needs, and came close to default.
The bursting of the 2009 real estate bubble hurt both Amlak’s loan book and its property portfolio, leading the Dubai Financial Market to suspend trading in the company’s shares in February 2009.
Hisham Khairy, the head of institutional trading at Menacorp, yesterday predicted that it was going to be “a bloody day for the stock”.
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