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Mon 10 Sep 2007 01:12 AM

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Amlak considers share buyback

The Islamic mortgage lender says it is to discuss a proposal to buy back some of its own shares.

Dubai-based mortgage lender Amlak Finance said on Sunday it was considering buying back some of its own shares, which have plunged almost 40% this year.

Amlak directors would discuss the proposal at a meeting on Sunday, the mortgage lender, which complies with Islamic law, said in a statement on the Dubai bourse Web site, without giving details.

Shares of Amlak, an affiliate of Emaar Properties, fell 1.27% on Sunday to 3.10 dirhams ($0.844), below the fair value target of two of three regional investment banks that started coverage of the stock this year.

In April, EFG-Hermes said its Amlak target price was 4.52 dirham and HC Securities put the stock's fair value at 3.72 dirhams in June. Shuaa Capital gave Amlak shares a fair value target of 2.30 dirhams last month.

Amlak trades at around 26 times expected 2007 earnings, compared with about 19 for shares of its rival Tamweel, according to Reuters data.

Amlak is seeking permission to operate as an Islamic bank to take deposits from retail customers and to meet growing demand in the region for Islamic finance products, especially mortgages, its Chairman Nasser al-Shaikh said last month.

Shaikh was not immediately available for comment on the buyback.

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