Emaar fails to bounce back

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Share price declines are not due to regional performance, said Emaar's Ali Alabbar. (Getty Images)

Emaar Properties chairman Mohamed Ali Alabbar said that the master developer's plummeting share price is a reflection of world financial trends.

The claim came as the company announced plans to buy back its own shares amid speculation that the value of its stock will continue to drop.

Even though the buyback initially lifted the company's shares last week, by the close of play Emaar was down 3.04% at US $2 (AED7.34).

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Alabbar had earlier said the much publicised credit crisis and the global financial slowdown were the reasons behind the poor performance of the firm's share price, and not regional performance.

"Declines in regional markets are largely not in line with the fundamentals of the majority of companies listed here, including Emaar," Ali Alabbar said.

Shares in the company have fallen nearly 50% this year to date. This month alone, the value fell from US $2.47 (AED9.06) on September 1, to $2.06 on September 11.

The buyback programme will begin after October 1, in line with the Securities and Commodities Authority regulation that firms cannot repurchase shares 15 days before the close of the financial quarter.

Emaar will fund the repurchase programme from its available cash balance.

"The decision taken by our board of directors to buy back Emaar shares reflects our firm belief that those shares are currently undervalued in the market place," Ali Alabbar said.

Regional property markets have been in freefall of late. Oman's main index has lost more than 30% since June 12.

Qatar's main index has also been on the slide, which analysts have put down to fears of a slowdown in the country's real estate sector.

In Dubai, recent scandals involving other firms has also taken its toll on investor confidence.

Tamweel was forced to issue a press release on September 10 reassuring its shareholders that the arrest of its deputy group chief executive Abdulla Naser Abdulla would "have no impact on the operations and financial strength of Tamweel."

Emaar Properties recorded first-half net profits for 2008 of $0.9 billion.

The company currently operates across 36 markets globally within six areas of business, including real estate, shopping malls and education.