What's up: Dubai Islamic Bank (DIB) was the focus of trading yesterday as retail investors picked up shares in anticipation of the lender's third-quarter earnings.
DIB shares popular ahead of earnings
Dubai Islamic Bank (DIB) was the focus of trading yesterday as retail investors picked up shares in anticipation of the lender's third-quarter earnings.
The positive sentiment was driven in part by strong results this week from another Islamic lender, Abu Dhabi Islamic Bank. It reported a net profit of Dh314.5 million in the third quarter, up from Dh239.3m in the same period last year.
Sobhi Asim, a day trader on the Abu Dhabi Securities Exchange, said there was also some feeling that DIB's involvement with Tamweelwould provide a catalyst for the bank's shares. The lender increased its stake in the mortgage company last month to became a majority shareholder, now holding 57.3 per cent of the company. DIB also pledged to inject liquidity into Tamweel so it could resume lending, although that activity would not be reflected in third-quarter results.
The fate of Tamweel's rival Amlak remains uncertain after Noor Islamic Bank released a statement this week denying it was planning a tie-up with the mortgage lender.
Almost 30 million DIB shares changed hands yesterday on the Dubai Financial Market, about five times the daily trading average. The stock finished up 5.1 per cent at Dh2.46 a share.
"The move was so aggressive that it was able to change the Dubai Financial Market General Index from red to green during the second half of the trading session," said Saad al Chalabi, an institutional trader at AlRamz Securities based in Abu Dhabi.
DIB shares had not previously rallied like other listed banking stocks, which have moved up 3 per cent on average since the beginning of the third-quarter reporting season.
"The market was down early in the morning because of weak international sentiment, making us all sell our shares," Mr Asim said. "Once the prices fell (traders) started picking up small stocks, DIB among them, but no one knows what to expect. We are all still in the dark."