Shares of Amlak Finance continued to confound predictions following Tuesday's resumption of trading in the mortgage provider.
Its share price soared yesterday as retail and institutional investors piled into the stock.
After a day of wild fluctuations on Tuesday, shares in the Sharia-compliant lender rose in early morning trading yesterday, hitting the upper limit of 15 per cent just before 11am.
Amlak shares ended trading yesterday at Dh1.17, up 14.7 per cent, the best performing stock by far on the Dubai Financial Market.
More than 165 million Amlak shares changed hands yesterday, nearly a third more than Gulf Finance House, the DFM’s next most traded stock.
Amlak's performance came as "something of a surprise", said Julian Bruce, the head of institutional trading at EFG Hermes in Dubai.
"It's likely that investors are taking the view that since November 2008 the DFM General Index has doubled, and so Amlak is undervalued at Dh1.02," said Mr Bruce. "Unfortunately it is a case of pure novelty value taking precedence over fundamental value, with analysts suggesting a fair value considerably lower than where the stock is trading."
Although a number of Amlak shareholders exploited the company’s resumption of trade by selling their shares, investors were united yesterday, said Khaldoun Jaradat, trading manager at Brokerage House Securities in Dubai. “Everyone was buying – retail investors, institutions, everyone,” he said. “I can’t see it hitting its upper limits like this for many more days, but Dh1.20 to Dh1.30 is seen as an attractive price.”
Follow The National's Business section on Twitter