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Monday, 3 March 2008

Investors offer $13 billion in UAE Islamic bank IPO

By Daliah Merzaban

DUBAI (Reuters) - Investors offered about 48 billion dirhams ($13.07 billion), almost 86 times more than sharia-compliant Ajman Bank was looking to raise in the most heavily subscribed United Arab Emirates IPO in 15 months.

Ajman Bank, whose founders include the ruling family of the emirate of Ajman, will use the 550 million dirhams it raised in the initial public offering that closed on Wednesday to help finance its creation as the UAE's seventh lender that complies with Islamic principles.
"Investors have clearly seen the opportunity that the creation of Ajman Bank offers," Ajman Bank Chairman Sheikh Ammar bin Humaid al-Nuaimi said in a statement on Monday.

The IPO, the UAE's second this year, was the most heavily subscribed since the Dubai government sold shares in its public and private sale of Dubai Financial Market Co in November 2006. That was more than 300 times oversubscribed.

UAE bank assets that comply with Islamic law, including a ban on the receipt of interest, account for about 15 percent of the total, Ajman Bank Chief Executive Yousif Khalaf said last month.
Family-ruled Ajman, the second-smallest member of the UAE federation by population, sold 550 million shares, or a 55 percent stake, at 1 dirham each in the 10-day offering last month. HSBC Holdings Plc advised on the sale. The IPO of Abu Dhabi-based Islamic insurer Mithaq Lil Takaful was 43 times oversubscribed in February.

Some 83 firms are set to sell shares in Gulf Arab IPOs worth $10.5 billion in the next three years, newspapers reported on Monday, citing data compiled by Abu Dhabi-based private equity firm Gulf Capital.

National Bank of Abu Dhabi said last month it expected to manage eight UAE IPOs this year, with three looking to raise at least 4 billion dirhams by the end of June.
Ajman Bank plans to open its first branch in Ajman in the fourth quarter, and another nine branches covering the six other UAE members within two years, Khalaf said last month.
Noor Islamic Bank, partly owned by Dubai ruler Sheikh Mohammed bin Rashid al-Maktoum, started operations in January as the country's sixth Islamic lender.

Abu Dhabi, meanwhile, plans to start operations of its sharia-compliant Al Hilal Bank in June.
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Alfalah Consulting-Kuala Lumpur: www.alfalahconsulting.com 
Islamic Consultant & Trainer: www.ahmad-sanusi-husain.com 
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

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