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Emaar to start share buyback after Q3 results
Dubai's Emaar Properties , the largest Arab developer by market value, said on Tuesday that it had yet to begin its share buyback progamme but would commence repurchases after posting its third-quarter profits.
Emaar, whose shares have lost over 50 percent of their value this year, said last month that it would begin to buy back shares in October after securing the approval of the UAE stock market regulator.
Emaar shares ended 2.14 percent lower on Tuesday outperforming other real estate shares on speculation that it had begun the share buyback programme.
Real estate and banking shares have also tumbled across the oil-exporting Gulf Arab region due to concerns that the credit crunch could slow down its booming economies.
"... Companies cannot execute any share repurchase for the period starting from 15 days prior to the closing of the financial quarter until three days after the disclosure of its quarterly financial statements," an Emaar spokesman said.
"Emaar will follow the... guidelines and... will commence the share buyback three days after the disclosure of the quarterly financial results for the third quarter."
Regulations in the UAE allow companies to buy back up to 10 percent of their shares, once they secure approval from the regulator.
In nearby Kuwait, a government task force recommended on Tuesday that firms buy back shares to help shore up flagging shares.
Dubai's Union Properties said on Tuesday its board was considering a buyback programme after its shares lost over 50 percent of their value this year in a Gulf Arab stock market rout. (Reuters)
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Posted by ColonialB, london on 8 October 2008 at 10:34 UAE time
For those hoping that the stock market’s recent “correction” will be followed by a swift recovery, economist J.K.Galbraith has some words of wisdom. Note the last paragraph re buybacks, written in 1954 butas true today as ever:
“The singular feature of the great crash of 1929 was that the worst continued to worsen. What looked one day like the end proved on the next day to have been only the beginning. Nothing could have been more ingeniously designed to maximise the suffering.”
It’s worth remembering that a full recovery in the stock market took more than 20 years. During that time, in July 1932 the Dow Jones index was 89pc below its top. In Britain, the reaction was less severe: the market merely halved.
Amid the carnage, there were buy-backs of stock by investment trusts, desperate to shore up their share prices. This resulted in a massive outflow of cash, just when liquidity was at its most precious. “They bought their own worthless stock,” wrote Galbraith. “Men have been swindled by other men on many occasions. The autumn of 1929 was, perhaps, the first occasion when men succeeded on a large scale in swindling themselves.”