Emaar to buy back shares

Dubai: In an effort to shore up its plummeting share prices, Emaar Properties on Saturday announced a buy back of its shares.

Brokers, investment analysts and market intermediaries welcomed the move and said it will have a positive impact on Emaar and the entire market.

"We expect this move to restore investor confid-ence in Emaar, the real estate sector and the entire UAE market," said Rami Sidani, Head of Investments Middle East at Schroders.

Emaar's Board of Directors the Securities and Commodities Authority (SCA) of the United Arab Emirates had approved the share buy back on December 25, 2007.

The company on Saturday announced that it has decided to go ahead with the buy back. However, the company said that the programme would not be implemented before October 1, 2008, in line with Securiteis and Commodities Authority's (SCA) regulation that companies cannot execute any share repurchase 15 days prior to the closing of the financial quarter.

Emaar shares had come under heavy selling pressure in recent weeks, which took it down to a three-year low of Dh7.57 last Friday.

The company said yesterday that repurchases will be made from time to time on the open market at prevailing market prices, through block trades or otherwise. Purchases may be started or stopped at any time without prior notice depending on market conditions and other factors.

Funding

"Emaar anticipates implementing this share repurchase programme in a manner consistent with market conditions and the interests of its shareholders. The company plans to fund the repurchases made under this programme from its available cash balance," the company said in a statement.

"At Emaar, we firmly believe that there is no better investment we can make than in our own future. The decision taken by the Board of Directors to buy back Emaar shares reflects our firm belief that those shares are currently undervalued in the marketplace," said Mohammad Ali Al Abbar, chairman of Emaar Properties.

Analysts said yesterday that it is sound decision from the company to buy back its shares. "Emaar's share prices are near its book value and it makes ample investment sense for the company to acquire its shares now," said P. Krishnamurthy, CEO Dubai International Securities.

Company officials and investment analysts said that the buyback decision would arrest the sharp decline witnessed by the market in the recent weeks. "Recent declines in regional markets are largely not in line with the fundamentals of the majority of companies listed here, including Emaar. Rather, the recent performance of the markets here reflects global trends such as credit crisis and global economic slowdown that affect investors' sentiments," sad Al Abbar.

"We expect Emaar shares to positively react to this decision tomorrow," said Sidani.