Double blow to Tamweel

Tamweel's shares witnessed a sell-off yesterday as investors dumped stocks amid new regulations on mortgage financing and ahead of a takeover by Dubai Islamic Bank.

The stock fell 4.2 per cent to Dh1.14 in Dubai yesterday on heavy trading volume of 24.9 million shares, which made it the bourse's fifth most-traded stock.

"There are two negative news stories affecting Tamweel directly," said Nabil Al Rantisi, the managing director of brokerage at Menacorp, an investment company in Abu Dhabi. "First the regulations - this is what they do for a living. Secondly, there are investors who want to offload the shares before the takeover."

The Central Bank released a circular last week outlining plans that restricted lending to expatriates to 50 per cent for a first property and 40 per cent for any other. Emiratis can borrow up to 70 per cent for the first home and 60 per cent for subsequent purchases.

Dubai Islamic Bank on Thursday announced that it planned to take full control of Tamweel.

The bank will offer Tamweel's shareholders 10 shares of the bank for every 18 shares of the mortgage lender.

The bank's stock dipped 0.9 per cent to Dh2.04 yesterday.

Dubai's broader market advanced strongly, boosted by positive sentiment ahead of earnings season. Emaar Properties jumped 2.5 per cent to Dh4.01. Arabtec Holding, the emirate's biggest contractor, gained 2 per cent to Dh2.47.

The Dubai Financial Market General Index gained 0.7 per cent to 1,694.13 points. During the session, the benchmark touched a peak of 1,699.99, the highest level since April 5.

The Abu Dhabi Securities Exchange General Index gained 0.8 per cent to 2,709.67 points.

halsayegh@thenational.ae