Dubai: Dubai bourse’s top index rose 1.7 per cent on Thursday as Emirates NBD gained after divesting more shares in Network International and as the top lender’s low-priced rights issue was in higher demand on the final day of trading.
The Dubai Financial Market (DFM) index gained 43.8 points at 2,694.21, while Abu Dhabi’s ADX edged down 0.2 per cent.
Emirates NBD gained 6 per cent, after raising about Dh755.5 million through the sale of 31 million shares in Network International, the largest payment processing firm across the Middle East and Africa.
Also, the bank’s rights issue, which was launched last month in hopes of raising Dh6.45 billion, rose 14 per cent as investors rushed to buy the discounted rights on the offering’s last day of trading on the DFM.
The rights, which consisted of 758.8 million shares that was intended to be sold at Dh8.5 apiece, began trading at a massive discount of Dh. 2.9 on Nov. 3 and shed around 20 per cent as of Wednesday’s close before ending up in-line with its opening day price.
“This is not surprising,” said Vrajesh Bhandari, senior portfolio manager at Al Mal Capital. “The stock was attractive before rights issue, but during the rights issue some section of retail investors were not keen to commit additional capital.”
“‘Smart money’ is taking advantage of the weakness of the stock,” Bhandari added. “Today what we are seeing is its recovery, which is expected to continue into next week as well.”
The gains also triggered a rise in other financial stocks, pushing the banking index up over 3 per cent.
Shares in Emaar Development, majority-owned by Emaar Properties, was up 1.1 per cent after property sales surged 25 per cent in the first nine months of 2019.