x Abu Dhabi, UAESaturday 22 July 2017

Tamweel news good but what of merger?

What's up Tamweel is to petition the Emirates Securities and Commodities Authority to allow trading of its shares to resume - some good news for existing shareholders.

DUBAI // It is good news for existing shareholders that the mortgage provider Tamweel is preparing to petition the Emirates Securities and Commodities Authority to allow trading of its shares to resume. They would finally be able to salvage some of their investments locked in the shares for more than a year. Sheikh Khaled bin Zayed Al Nehayan, the chairman of Tamweel, told Reuters on Sunday that he expects to request as early as next month that trading resume, once Tamweel's full financial report is released. Sheikh Khaled added that the firm's planned merger with its fellow Islamic lender Amlak Finance was still a "possibility" this quarter. A resumption of share trading, he said, was not related to the merger and the lender would also call its first general meeting with the shareholders since the Dubai Government announced the merger in November 2008.

"We are obliged to call for that for our shareholders," Sheikh Khaled said. While the news is uplifting for investors, analysts say there are still more questions than answers about the fate of both lenders. "For investors it's a good thing, as their investments were stuck for a long time," said Ali Khan, a director at the investment bank Arqaam Capital in Dubai. "However, the market needs more colour on the story and needs to know what stage of the merger they are at."

Mr Khan said any trading of Tamweel shares would not reflect progress on the restructuring of the lenders, nor if the merged entity would be receiving a retail banking licence to alleviate the liquidity problems that had forced the Government to initiate the merger. Reports in the Arab media this month said the Central Bank has yet to receive an application for a new Islamic lender that would result from a merger.

Trading of Tamweel and Amlak shares were halted after news of their proposed merger. "But the logical question here will be, 'Where is Amlak in the picture?'" said Mr Khan. "They [Amlak] have similar obligations to shareholders and the market needs guidance." skhan@thenational.ae