There’s never been so much trading in Shuaa Capital’s stock.
The number of shares bought and sold in the UAE’s only regularly traded investment bank surged to 69 million on Wednesday, about 20 times the six-month daily average, according to data compiled by Bloomberg. Last Thursday, volumes reached 94 million, double the previous record. On both days, the shares advanced 15 per cent, the maximum allowed, bringing Shuaa’s market value to Dh615 million. The equity rose as much as 7.5 per cent in Dubai today.
The increase is a sign that an investor may be seeking to gain a foothold in a company whose shares have lost about two-thirds of their value in the past two years, had four chief executives in about five years, and managed without one since the end of 2013. The stock has been trading below book value since October 2014. Shuaa posted a Dh190m loss last year, the worst performance since 2011.
“It could be a strategic increase of a stake by a shareholder or a group of investors, regardless of the stock’s price,” Muhammad Faisal Potrik, the head of research at Riyad Capital, whose focus is on the Saudi Arabian markets, said by telephone. “That’s one reason why a stock would behave irrationally for a short period of time.”
A spokesman for Shuaa declined to comment when contacted Wednesday and last Thursday.
Dubai Banking Group, the biggest shareholder in the company, owns 48 per cent of Shuaa, according to data compiled by Bloomberg. There have been no publicly announced changes in the holdings. Dubai Banking is part of Dubai Group, a conglomerate that restructured billions of dollars in debt after the 2008 financial crisis.
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