Dubai shares reversed losses, led by Emaar Properties, after mortgage lender Amlak Finance said it offered creditors a new deal on its defaulted debt.
The DFM General Index gained 0.6 per cent to 3,967.66 at 1.40pm in the emirate, after declining as much as 5.4 per cent. Emaar, which has the biggest weighting on the index and holds 45 per cent of Amlak’s shares, rose 4.9 per cent to Dh8.82. Mortgage provider Amlak offered lenders a 20 per cent initial payment in a new debt deal.
“Anything positive on Amlak is a positive catalyst for Emaar stocks,” Saleem Khokhar, Abu Dhabi-based head of equities at NBAD Asset Management Group, which oversees about $2.5 billion, said by telephone.
Real-estate related companies in Dubai have benefited from a rebound in property prices, almost six years after the global credit crisis prompted a crash. Amlak was one of two leading mortgage providers in the emirate before 2009. The Islamic lender is restructuring more than $2 billion of loans. Its shares have been suspended from trading since 2008.
The company is proposing making an initial 20 per cent payment to depositors, or about Dh2billion, and to repay the remaining debt owed over 12 years, Amlak’s spokesman said in an emailed response to questions. Depositors have been given two months from a June 5 meeting to assess and accept the package, he said, declining to be identified because of company policy.
Shares in Arabtec were up more than 10 per cent just before the close in trading.
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