First Gulf in share buyback

SHARE BUYBACK: First Gulf has initiated a buyback of 10 percent of its shares. (ITP Images)

Abu Dhabi-based First Gulf Bank said on Wednesday it was initiating a buyback of 10 percent of its shares, which have plummeted more than 40 percent so far this year.

First Gulf said it received approval for the share buyback from the Emirates Securities and Commodities Authority (ESCA) on Nov. 5.

First Gulf chairman Sheikh Hazza bin Zayed Al-Nahyan said in a statement the buyback would "proactively protect our shareholders' assets".

"I hereby confirm that the Board focus remains on providing the maximum value for our shareholders, we therefore decided to initiate the share buyback programme as we strongly believe in our franchise future performance," Sheikh Hazza said.

First Gulf's shares ended Wednesday 0.87 percent up at 11.55 dirhams. The share price is down 42.77 year-to-date.

First Gulf posted third quarter profit of 850 million dirhams ($231 million) in the three months to Sept. 30, up 68 percent from 506.5 million dirhams for the same period last year.

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READERS' COMMENTS

Signalling!!
Posted by SR on Friday 21 November 2008 at 11:06 UAE time


I dont think share buy back decision provides the expected signalling effect, especially in the context of current market situation. People essentially see these as desperate measures and thereby tend to sell further, driving the price down further.
As such, the decision may be technically correct, but leaves much to be desired in terms of reality vis-a-vis perceived effect.
Banking is built on strong fundementals, most of which are tried and tested over centuries. When greed rules with scant regard to such fundementals, one has to expect the consequences.

BIG MISTAKE~First Gulf in share buyback
Posted by joe Simms on Friday 21 November 2008 at 00:04 UAE time


A warning to the general public...this is what Lehman & Bear Sterns did before their big blow up. They are throwing money at a fire and it'd be a shame if people jumped into this stock as a result. I'd sell. That's my humble opinion

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