Second day of gains for NBAD amid merger talks

Abu Dhabi stocks fell on Monday as investors booked profits, even as National Bank of Abu Dhabi shares rose to their highest level since September.

The lender and its local competitor First Gulf Bank are in discussions over a possible merger to create the Middle East’s largest bank.

FGB, whose shares rose by 11.4 per cent on Sunday, closed down 3.4 per cent on Monday at Dh12.65. NBAD surged 4.3 per cent to Dh9.60. The stock has gained 20 per cent since Thursday’s close. Monday’s gains took the increase in NBAD’s market value this week to Dh8.33 billion, according to Bloomberg.

“For NBAD, FGB provides a very profitable retail business, and would allow it to increase its single-borrower limit by 80 per cent, boosting lending to the Government as well as GREs [government-related enterprises],” said Arqaam Capital in a research note.

“Only a bank the size of FGB can provide this to NBAD.”

Abu Dhabi’s headline index closed 0.96 per cent lower to 4,481.04 while the Dubai Financial Market General Index led gains across the Arabian Gulf, closing 0.2 per cent higher at 3,305.94.

Emirates NBD and Emaar Properties led the big-name gainers, offsetting losses by Emaar Malls and Damac Properties.

Elsewhere in the region, Saudi Arabia’s Tadawul All Share Index finished the day 0.25 per cent higher, while the Qatar Exchange rose by 0.2 per cent.

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John Everington

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