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Sat 12 May 2007 09:37 AM

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UAE regulator probes suspicious trades

UAE market regulator turns attention to trades after shares in some of the country's leading companies have surged.

The UAE stock market regulator said on Thursday it was looking at why shares of Arabtec Holding, the country's largest listed construction company, and of other firms surged during the last few days.

Shares of Dubai-based Arabtec jumped almost 13.6 percent on Tuesday, their biggest daily gain in a year. It was the same day the company announced after market closure a 63 percent rise in first-quarter profit. "The surveillance is going on for Arabtec and some other companies," Ebrahim al-Zaabi, director of inspection and follow-up at the Securities & Commodities Authority, told Reuters. "It's still going on and if we find something we will inform everyone." He declined to identify the other companies or be more specific about the nature of the surveillance.

At least three UAE companies, including Aldar Properties, Sorouh Real Estate and First Gulf Bank (FGB), have said in statements that they do not know why their shares have surged during the last few days. Stock of FGB closed 7.6 percent higher on Wednesday, the biggest jump in a year, and shares of Sorouh surged 27.6 percent in the four days to Wednesday's close. Aldar jumped 16.3 percent in the three days to Tuesday's close.

In Dubai, shares of Islamic mortgage company Amlak Finance, the emirate's worst-performing stock this year, surged almost 15 percent on Wednesday, the most one-day rise in a year. They rose another 4 percent on Thursday. Nasser al-Shaikh, Amlak's chairman, said he could not explain the rise. An application with the central bank to become a bank and be able to take deposits was still pending, he told Reuters on Thursday.

"There were rumours in the market that Amlak will be granted a licence to become an Islamic bank," said Alaa El Din Moustafa, chief dealer at EFG-Hermes. Arabtec Managing Director Riad Kamal told Reuters on Thursday the regulator had been in touch to find out if the earnings results may have been leaked and that Arabtec itself had looked into the share-price spike.

"We informed them there was no leak," Kamal said. "I looked into trading that day because the volume was different from usual and found that it was mainly Abu Dhabi investors speculating." No company directors traded that day, Kamal said.

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