Amlak hits upper circuit again, analysts see substantial downside

Dubai: Shares of Amlak continued its gaining streak, hitting another upper circuit, triggering concerns about the current valuations of the scrip.

On Monday, Amlak Finance ended 14.94 per cent higher at Dh1.77, after gaining more than 70 per cent since June 9.

“There is very limited support for the current share price. We see substantial downside in the stock as there is substantial valuation risk,” Jaap Meijer, executive director at Arqaam Capital said, adding “there has been strong interest from retail investors and we have seen no participation from institutional investors.”

The stock was re-listed on the Dubai Financial Market after a gap of more than six years, and many analysts said that Amlak shares were playing a catch up with a 100 per cent rise in the index since 2008, when the index was at 2,000 levels.

“The share is worth only about 50 fils with whatever information that is available in public domain,” Sanyalaksna Manibhandu, Manager of Research, National Bank of Abu Dhabi Securities, adding “the stock is running past its valuations with the available information.”

Meijer said the stock is currently in the bubble area as the current share price overlooks the fundamental position of the financing company.