Ajman Bank jumped to the highest level in more than three years on expectations that an institutional investor might purchase a stake in the Islamic bank.
The shares soared 6.2 per cent to Dh1.20 at the close in Dubai yesterday, the highest since October 2009, and bringing a rally so far this quarter to 47 per cent. The stock was the second-most traded and the biggest gainer on Dubai's DFM General Index. The company said last month that it does not wish to enter any strategic partnership.
"Some investors are not buying the denial that a strategic partner is interested in the bank as the volume on the stock is unusual," said Nabil Farhat, a partner at Abu Dhabi-based Al Fajer Securities. "The financial performance of the bank during this year was strong."
Daily trading volumes on Ajman Bank soared this quarter, rising above 30 million shares last month, compared with a 12-month daily average of 1.6 million shares. About 23 million shares were traded yesterday.
The bank is 25-per-cent owned by the Government of Ajman.
Calls made to the offices of Ajman Bank's acting chief executive, Mohamed Amiri, and its chief operating officer, Ashraf Shokry, were not answered.
Shares of Ajman Bank, which comprises 1.9 per cent of the DFM General Index, have gained 50 per cent in 2012, compared with 16 per cent for the gauge. The lender's third-quarter profit more than quadrupled to Dh13.5 million.
The company has a market capitalisation of Dh1.2 billion compared with Dh800m at the end of last year.
Ajman Bank's 14-day relative strength index surged to 72 yesterday. A reading above 70 indicates to some analysts that a security is poised to decline.
Ajman Bank has been listed on the Dubai Financial Market since February 2008. Its website says the bank has branches in Ajman, Abu Dhabi, Al Ain, Dubai and Sharjah.
* Bloomberg News
