No immediate public equity investment plans after reducing holdings in firms - Ajman Bank

Bank said transactions were in line with its strategy to strengthen asset quality

Bhavik Metha, Zawya, March 4, 2024

Ajman Bank does not have immediate plans to invest in further public equities, following the reduction of its shareholdings in Abu Dhabi and Dubai-listed companies.

The bank said reductions in its holdings in Dana Gas and Eshraq investments, listed on Abu Dhabi Securities Exchange (ADX), and in Dubai-listed Takaful Emarat and Salama were transactions in line with its strategy to strengthen asset quality.

At the end of last year, Ajman Bank owned 41.8% of Takaful Emarat but now owns 5.49%.

It also owned 9.79% of ADX-listed Eshraq Investments, which has now fallen below 5% according to ADX records, as did its shareholding in Dana Gas, leaving each company with one major shareholder.

Its shareholding in Dubai Financial Market (DFM)-listed Islamic insurer Salama fell from 29.6% of Salama to 22.53%.

A representative of the bank told Zawya: “The bank remains open to attractive investment opportunities, but it doesn’t have any immediate plans to invest in the public equities.”

Analysts at Century Financial said Takaful Emarat had suffered from legacy losses in bad assets, losing business in major channel partners to other insurers. Dana Gas operates in the geopolitically sensitive Kurdish region of Iraq, with recent drone strikes on its facilities highlighting the risks with the operational capacity.

Bhavik Metha, Century’s deputy head, research, for investment products said about Dana Gas: “Stabilisation and recovery in natural gas and Brent oil prices would be the only main anchor for the company stock prices to rally.

“The company’s stock prices correlate 65% to 75% with Brent and natural gas (NG) prices over the last five years.”

The operating income of ADX-listed Eshraq Investments in 2023 was down due to the sale of two significant assets, Metha said.

“Losses in the investment portfolio further compounded this due to substantial write-downs in its core Goldilocks funds. Further amortisation cannot be ruled out,” he said.

Ajman Bank, listed on DFM, posted a net loss for full year 2023, which it attributed to one-off provisions booked in the fourth quarter to improve asset quality.

Source

Zawya