Abu Dhabi Securities Exchange (ADX) has denied media reports it is to launch an investigation into "unusual" share price movements of Aldar Properties and Sorouh Real Estate observed before Abu Dhabi’s two biggest developers announced they were in talks to merge, it was announced on Tuesday.
“Abu Dhabi Securities Exchange denied the claims circulating in some media outlets that it plans to investigate trading in Aldar and Sorouh shares. The unfounded rumours of an investigation allege a suspicious price movement of both companies’ shares prior to their mutual public statement of merger talks,” ADX said in a statement.
“CEO of Abu Dhabi Securities Exchange M. Rashed Al Baloushi said in an official statement that ADX carries out daily routine checks on all share trading activities through highly sophisticated electronic surveillance systems which can detect any instance of share-trading violations.
“Mr. Al Balosuhi also reiterated that the exchange does not perform any investigations unless it was highly confident that trading laws have been violated, which did not happen in the case of Aldar and Sorouh share trading,” the statement added.
Abu Dhabi stocks rose the most in two weeks yesterday after Aldar Properties and Sorouh Real Estate said they are considering a merger that may create a company with US$15bn in assets.
Abu Dhabi’s The National newspaper reported on Tuesday the ADX was launching an investigation after Aldar, the developer behind Yas Island and Ferrari World, and Sorouh both saw their share prices rise by exactly 9.8 percent.
"We were very suspicious when we saw the unusual trading movements of both stocks," the newspaper reported Abdullah Salem Al Naimi, the manager of market surveillance and market operations at ADX as saying. "We started back-office investigations [on Sunday morning] since the share price movements became identical."
Aldar, Abu Dhabi’s biggest property developer, and Sorouh, the emirate’s second-largest real estate firm, rallied to the highest in almost nine months yesterday. The benchmark ADX General Index rose 1.1 percent, the most since February 26.
The two companies, which are involved in Abu Dhabi’s drive to transform itself into a tourism and business hub, said in a joint statement yesterday that they set up a team to study a possible merger with the “blessing” of the sheikhdom’s government. The team will present a plan in the next three months.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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