GFH shares jump 14% as company acquires treasury shares

03/07/2017 05:43 AST

The UAE's main equity indices moved less than 1 per cent on Sunday as trade concentrated on smaller cap stocks including GFH Financial Group and Eshraq Properties, which each climbed more than 10 per cent.

GFH share prices nearly approached the market cap for a daily price increase, ending the day 14.36 per cent higher at Dh2.07. The stock was the most actively traded on the Dubai Financial Market (DFM), accounting for over 44 per cent of the market's total values.

In Abu Dhabi, Eshraq Properties jumped 10.47 per cent with its shares accounting for nearly 50 per cent of the bourse's total traded value. Abu Dhabi Financial Group has stakes in both GFH and Eshraq.

"The interest in the market is very selective. I don't see anyone trying to trade the second-quarter numbers yet. There's interest in GFH and Eshraq, but it's not broad-based yet. Early in the day, the market found out the [GFH] management was looking to buy back treasury shares, so that's a positive, and last week, GFH shares were surprisingly sold down with no news," said Sanyalaksna Manibhandu, director of research at the National Bank of Abu Dhabi Securities.

In a statement to the bourse on Sunday, GFH said it has signed a deal with SICO to act as a market maker for GFH's shares after the company received a non-objection for further acquisition of treasury shares.

SICO started shares acquisition activities effective July 2. The non-objection, which was from the Central Bank of Bahrain, came after GFH shareholders approved the acquisition of treasury shares in April 2015. The company said it is acquiring treasury shares to "stabilise and support share prices."

From a broader market perspective, the DFM index fell 0.26 per cent to reach 3,383.31, while the Abu Dhabi Securities Exchange (ADX) general index rose 0.41 per cent to reach 4,443.66. NBAD's Manibhandu said investors will continue to keep an eye on oil price movements, which will impact market performance. Both Brent and WTI crude descended into a bear market last week amid concerns about a supply glut and slower demand.

"Even though Opec (Organisation of Petroleum Exporting Countries) and its allies, including Russia, have been trying to cut production, it's not really cut by that much because you also have Libya now coming back in. If that's the case, crude is not going to the $55+ range that people were looking for," he said.

WTI Crude prices were trading at $46 a barrel in the last trading session, while Brent was at $48.77.

Apart from oil prices, investors are likely to start focusing their gaze on second-quarter financial results, which are expected to start coming out in mid-July.

Gulfnews