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Tue 25 Sep 2007 12:26 PM

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Amlak share buyback approved

Dubai-based Islamic mortgage lender to buy back 5% of its shares, which are down 40% this year.

Dubai-based Islamic mortgage lender Amlak Finance said on Tuesday it had received approval from the Emirates Securities and Commodities Authority to buy back 5% of its shares.

Amlak did not say when it would begin buying back shares in a statement on the Dubai bourse website. It had announced the buyback plan on September 10.

The company shares, down almost 40% this year, were 2.52% higher at 3.25 dirhams at 0650 GMT.

Amlak, which operates in compliance with Islamic law that bans receiving interest, said almost two weeks ago it expected profit this year to grow at least 70% in a statement on the Dubai bourse website. The statement citing company Chairman Nasser Al-Shaikh, did not give more details.

Egyptian investment bank EFG-Hermes in April gave the company's shares a price target of 4.52 dirhams, and HC Securities put the company's fair value at 3.72 dirhams.

Amlak almost doubled its revenue in the second quarter on gains from investment and property sales after posting its second-smallest profit in two years in the first quarter.

The firm is also seeking permission to operate as an Islamic bank to take deposits from retail customers to meet growing demand in the region for Islamic finance products, especially mortgages, Shaikh said last month.

Amlak, which already operates in Egypt and Saudi Arabia, said it plans to sell asset-backed Islamic bonds worth about $260 million to finance expansion, possibly into Jordan and Morocco, Shaikh said.