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Saturday, 26 January 2008

Islamic insurer plans IPO amid meltdown

Abu Dhabi-based Islamic insurer Mithaq Lil-Takaful said it aims to raise 82.5 million dirhams ($22.46 million) in an initial public offering (IPO) that begins on Saturday, amid a meltdown in global and Gulf markets.The insurer, also called Mithaq Liability Insurance Company, plans to sell 82.5 million shares at 1 dirham each and a fee of 3 fils, in a sale open to nationals of the UAE and other Gulf states, state news agency Wam reported late on Monday."There is a huge demand for Islamic insurance or takaful in this region, and the new company is aiming to get a share of the pie," Mithaq chairman Abdulla Saeed Al-Qubaisi told newswire Reuters on Tuesday. The sale - equivalent to 55% of the company's share capital - closes on February 4, with shares listing on the Abu Dhabi Securities Market (ADSM) in March.It will be the UAE's first IPO in 2008, amid one of the worst-ever days for Gulf stocks. Saudi shares plunged a record 10% on Tuesday leading the biggest retreat in Arab benchmarks since a 2006 crash as investors, spooked by a US economic downturn, dumped regional shares, bonds and currencies.Dubai's index fell 6.21% , its biggest one-day loss since March 2006, and Abu Dhabi's 6.8%, a record."The insurance business is growing at 15 to 20% annually and is projected to double by 2010," Al-Qubaisi said. National Bank of Abu Dhabi (NBAD) is arranging the sale. In Islamic insurance, or takaful, risk and reward is spread equally between the customer and the insurer, unlike in conventional insurance where the insurer takes on all risk and receives a premium. (Reuters)

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