DUBAI/ABU DHABI: First Gulf Bank (FGB) yesterday announced that it had initiated a share buyback program for up to 10 percent of the bank’s shares issued and traded in the market.
Shuaa Capital and Emaar initiated share buyback programs last month.
FGB obtained an approval from Emirates Securities and Commodities Authority (ESCA) during the first week of November. Firms listed on the UAE markets are allowed to buy back up to 10 percent of their shares but previously could not begin their purchases until results had been posted.
Last month, the UAE Cabinet had authorized the bourse regulator to ease restrictions on share buybacks in an effort to boost stocks after declines.
“Due to the global financial turmoil, which has negatively affected the local shares valuation and led to the irrational trading of our shares, the board of director has decided to step in to proactively protect our shareholders’ assets. While FGB commands a solid portfolio and our net profits grew by 68 percent from September 2007 to September 2008, the share price declined by more than 40 percent during the year 2008 due to the adverse market conditions. I hereby confirm that the Board focus remains on providing the maximum value for our shareholders, we therefore decided to initiate the share buyback program as we strongly believe in our franchise future performance. Through higher earning per share, the program will reflect over time, into higher value for FGB shareholders,” Sheikh Hazza bin Zayed Al-Nahyan, chairman of FGB, said in a statement.
“In spite of the recent global financial crisis, we operate in a fundamentally solid economic environment. Abu Dhabi will continue to expand and grow as per its long term strategy for 2030. FGB is pleased to constitute part of this growth,” said Abdulhamid Saeed, managing director of FGB.
After seeing its share price collapse over recent weeks, Emaar announced buyback of its shares. Shuaa Capital initiated a share buy-back program for up to 55 million shares representing 10 percent issued shares of the company.
