Shuaa sees profit halved as markets decline

CHALLENGING CONDITIONS: Shuaa saw its fouth-quarter profit drop by half as markets across the Gulf declined. (Getty Images).

Shuaa Capital, the Dubai-based investment bank that helped arrange last year's $5 billion initial public offering (IPO) for state-owned ports operator DP World, said fiscal fourth-quarter net profit fell by half as Gulf Arab markets declined.

Net profit in the three months to March 31 was 53.1 million dirhams ($14.46 million) compared with 107.8 million dirhams in the year-ago period, Shuaa said in a statement. The firm said the markets "were more challenging" during that period.

Gulf Arab stock markets, where Shuaa invests about 60% of its clients' money, recovered last year after crashing in 2006.

But in the first three months of 2008, Arab markets reversed some gains, with Dubai's main index shedding almost 10%, and Saudi Arabia's measure - the worst performer in the Gulf Arab region this year - losing more than 18%.

Operating income was 107.7 million dirhams and net profit, including minority interests was 58.9 million dirhams, it said. Shuaa's fiscal year begins on April 1.

Assets under management at Shuaa more than doubled to 14.23 billion dirhams at March 31, the bank said.

In March, HSBC Holdings began coverage of Shuaa with an "overweight" rating and a price target of 12.6 dirhams, saying the company was benefiting from a buoyant UAE market.

Shuaa's regional expansion and focus on fees business added to the stock's appeal, it said. The same month, Shuaa's Saudi unit, of which it owns 60%, started operations looking to tap business in the world's largest oil exporter.

In February, it agreed to buy 20% of UAE-based Orion Holding, a brokerage, technology and services firm, in a 193 million-dirham deal. The deal also involved acquiring controlling stakes in five Orion Brokers subsidiaries, Shuaa Capital said.

Shares of Shuaa have surged 24.77% this year and last traded at 8.22 dirhams, compared to the benchmark, which declined 4.13%. (Reuters)

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