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Emaar share buy-back plans to boost markets

By Parag Deulgaonkar

Emaar surprised markets yesterday after winning approval for a 10 per cent buy-back of its shares for the second time in two years.

The decision by the Securities and Commodities Authority (SCA) comes several months after the expiration of Emaar’s last share buy-back period – which was not exercised.

Companies have one year from the date of approval in which to buy back shares.

Yesterday, analysts said the new request shows the Burj Dubai developer’s intention to complete the transfer and not disappoint shareholders again.

The buy-back issue was the main point of contest between the shareholders and Chairman Mohammed Al Abbar during the company’s AGM earlier this year. “The developer’s request to buy its shares back indicates its confidence that the fair value of its share is considerably more than the current market price.

While the initial request submitted in 2006, which was not implemented, had aimed to absorb the anger of shareholders who saw the company’s share tumble from Dh28 to about Dh10” said one analyst.

During yesterday’s trading session on the Dubai Financial Market, Emaar’s shares crossed the Dh15 mark for the first time since September 2006 amid heavy volumes.

Analysts have put a target for Emaar at between Dh19 to Dh21 per share. The news is expected to drive further trading during today’s DFM session.