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Abu Dhabi, UAEFriday 14 December 2018

Shuaa abandons talks to acquire Global stake

Dubai-based bank seeking regional acquisitions after financial turnaround

Shuaa Capital is expanding its operations through acquisitions. Pawan Singh / The National
Shuaa Capital is expanding its operations through acquisitions. Pawan Singh / The National

Shuaa Capital, which was the top investment bank in the Arabian Gulf region before the 2008 financial crisis, saw its shares fall sharply on Monday after it abandoned plans to acquire a stake in Kuwait’s Global Investment House, setting back the Dubai-based investment bank’s acquisition strategy.

The Dubai-based investment bank gave no reason for the cutting off of discussions with Global, announced on Monday in a statement on the Dubai Financial Market. Its shares fell 1.7 per cent.

Shuaa had formerly pursued a merger with Bahrain's GFH, but broke off talks in June.

In an interview with The National earlier this month, Shuaa general manager Fawad Tariq-Khan described Global as a “better fit” than GFH, with the Kuwaiti firm’s real estate asset management seen as a particular draw. It intended to secure a shareholding in Global in 2018.

Shuaa has expressed intentions to gain scale through acquisitions and expand its footprint within the region, following a turnaround in its financial fortunes.

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A series of restructuring exercises, together with an investment from alternative investment company Abu Dhabi Financial Group last year, have helped the bank return to profitability this year after posting annual losses in 2015 and 2016.

Shuaa said this week it had re-launched its securities brokerage business in Egypt, as part of plans to expand the bank’s capital markets offering in the Middle East and North Africa (Mena).

Shuaa Securities commenced operations in the Egyptian market on Sunday after securing official approvals from the Egyptian Financial Supervisory Authority (EFSA).

The bank suspended its brokerage business in Egypt after the global financial crisis in 2008 hit trading volumes.