Ajman Bank plans to buy Dubai bonds
Ajman Bank, which has Dh1 billion in cash from its public issue
proceeds, is considering to subscribe to a part of the second tranche
of $20 billion (Dh73.46bn) high-yield bonds of the Government of Dubai,
said a senior bank official.
This may probably make Ajman Bank
the first UAE bank to invest in the high-yield bonds issued by the
Government of Dubai to meet the liquidity needs of government-linked
entities.
Speaking to Emirates Business, Ali E
Alshaqoosh Al Mueen, Acting Chief Executive Officer of Ajman Bank, said
the bank is cash rich and needs to invest in some profitable venture.
It could invest in the Dubai Government bonds, he said.
When
asked whether the bank will buy Dubai bonds, Al Mueen said: "We can
consider them. To achieve some profitability, we need to invest some of
the liquidity and buying bond is one way of investment. We have to
better analyse them as an investment and take a joint decision. We have
full faith in the UAE Government and the Government of Dubai."
The
Government of Dubai launched $20bn bonds in February this year. The
first $10bn tranche was subscribed by the UAE Central Bank and the
remaining second tranche of the same amount is open for subscription to
local as well as international financial institutions inside and
outside the country, Abdulrahman Al Saleh, Director General of Dubai's
Department of Finance, said last month.
Al Mueen said as a new
bank, "most of the capital is maintained with us, so the bank actually
is very liquid. We have a lot of funds in customer deposits, which we
can invest on their behalf. We're focused on the right opportunity to
provide liquidity for finance".
The bank has not allocated any specified amount to buy the bonds, the official clarified.
He said the bank, which began operations early this year, is on track to reach breakeven at the end of its first financial year.
Al
Mueen said: "We hope to break even in the fourth quarter; that's our
main objective. We have got a lot of support from board members and
every member is involved proactively to make the bank successful."
The
bank posted a loss of Dh11.6 million in first quarter of this year.
Second quarter results are expected to be announced this week.
The
bank stock remained unchanged at Dh1.1 on the Dubai Financial Market
yesterday. More than 8.8 million shares changed hands in 140 trades.
|
|
