Gulf Finance House rights issue

[Talha]

GFH closed on 2.59 on sunday afternoon.
and it opened on 2.01 on monday morning.
maybe it was due to GFH’s rights issue subscription?

[Prop]

Maybe, see this:

Gulf Finance House 11 October 2009:

Capital increase announced from US$ 315,375,117 to US$ 614,981,479, through right issue @ US$ 0.38 per share (US$ 0.33 par value + US$ 0.05 premium).

[Talha]

sorry but i think you did not understood what i said.
Supposedly if Emaar closes today at 4.77.
and tomorrow Thursday morning DFM shows that the previous closing of Emaar was 3.70 instead of 4.77, this isn't possible at all...right? or is it..

Well this is exactly what happened with happened with GFH on Sunday-Monday. closed at 2.59 on sunday.
The next day Dfm showed that the closing price of sunday was 2.01, and not 2.59! and shares start trading 2.01. ( a drop of 22.4% without any trading)

maybe i am not being clear enough, or maybe this isn't something out of the ordinary..which is highly unlikely.

P.S. 2.01 was not the opening price, it was the previous closing price. However GFH previously closed on 2.59

[sharewadi]

Closing price on DFM is last sale price.
Closing price on ADX is average price for the day?

Opening price on both markets is price at which first sale goes through. If nobody wants to buy shares at previous days close, then price will adjust until a sale goes through, and might be different from previous close ... I think

GFH is an illiquid stock so is subject to substantial fluctuations and quirky price changes like you've just described. If there really is an error though, ask the DFM and/or your broker to double check. Perhaps a sale was cancelled, affecting the closing price.
_________________
UAE IPO list | posting guidelines

[Talha]

GFH:
Sunday: Previous Closing: 2.25 Closing price.: 2.59 over a million shares (change about +15%)
Monday: Previous closing: 2.01 Closing Price.: 2.31 again over a million shares (change +15%)
Tuesday: Previous closing: 2.31 Closing Price: 2.62 change +15%

[sharewadi]

Gulf Finance House (GFH) closing price was 2.59 or 2.01 on Sunday?

If 2.59 then lowest possible open price on Sunday should be 10% lower or about 2.34. The only other thing I can think of is share dilution due to bonus shares or rights issue.

If 2.01 close on Sunday then 2.01 open on Monday makes sense.
_________________
UAE IPO list | posting guidelines

[Foreigner]

I would recommend caution with GFH. I believe it is 1:1 with the main line (Kuwait).

UAE line 1 share is 2.47 AED
Kuwait 1 share is 1.59 AED

The Kuwait line trades 20-25m shares a day on average and so will be the more "accurate" one. Why buy the UAE line?

If the rights issue is successfully subscribed then the stock will fly, most likely up to 2.5 AED on the Kuwaiti line

[sharewadi]

Gulf Finance House (GFH) posts split from DFM marketwatch topic for October 2009.
_________________
UAE IPO list | posting guidelines

[sharewadi]

Press Release 14 October 2009:

GFH announce rights issue commitment offers of approximately US$100 million Manama, Bahrain: Gulf Finance House (GFH), the leading Islamic investment bank today announced that it had received approximately US$ 100 million dollars in commitment subscription offers prior to the official launch of its capital raising initiative on Thursday 15th October. GFH has said it is looking to raise between US$ 200 - 300 million of new capital from shareholders to strengthen the balance sheet in the face of the global economic downturn and take advantage of current high value investment opportunities in the market. Today’s announcement follows the recent unveiling of a revised GFH business model and a restructured GFH management team to drive the business forward. The revised business model sees GFH divided into two principal businesses; GFH Real Estate and Infrastructure and a streamlined GFH Banking business. Commenting on today’s announcement, GFH CEO Ahmed Fahour said, “We have devoted a great deal of energy to preparing GFH for a new phase of international growth. At every stage in this critical process we’ve made it a priority to inform our shareholders and investors. Over the past few weeks we’ve consulted directly with them and the exciting level of commitment subscription offers we’ve received are a reflection of the faith they are placing in our refined and rejuvenated approach. I would like to pay tribute to them and reconfirm my commitment to make their bank the worlds leading Islamic investment bank.” In relation to GFH’s broader capital raising plan Mr. Fahour added, “The rights issue is obviously a key pillar in our capital management plan. However, we’re also pretty excited by the progress we’re making on liquidating the non-core balance sheet assets that will make a significant contribution to our capital position and reinforce the balance sheet. We anticipate making further announcements in relation to this in the coming weeks.”

_________________
UAE IPO list | posting guidelines

[Hopless]

Hey guys,

Its my first comment in this forum ..
I entered GFH on 2.63 .. and was surprised with the sudden fall down in this stock today to 2.45 .. Any idea or comments regarding this share .. shall I run out of it even with a loose .. or wait .. specially with the issuing of the new shares of this company at the prive of 0.38 .. wont the prices fall down .. specially i'm not included in the new shares issuing because i bought on the 13th of OCT .. and investors who have the right in the new issuing should have held the shares before the 11th ..
Please Advise URGENTLY!

Regards,
Carla,

[Foreigner]

If you look at my post above you can see that the shares are currently trading in Kuwait at 1.59 AED.

Ask yourself why GFH shares trading on the UAE market are worth 55% more than GFH shares trading on the Kuwaiti market.

The UAE line is trading 500,000 shares a day, having traded almost 0 earlier this year
The Kuwait line is trading 20,000,000 shares a day and trades that amount consistently

Which do you think is a more accurate reflection of the actual value of the company?

I have a feeling that somebody is making a lot of profit by selling their UAE GFH shares to gullible retail investors, probably by spreading rumours.

This type of behaviour makes me mad

Why did you buy the GFH shares? Did someone recommend them to you? If so, ask them about why they didn't recommend buying the Kuwait (or even Bahraini) lines of the company stock at far, far lower prices.

[Hopless]

Thank you for the quick reply, To what I know there is a different between the shares of GFH in DFM and KSM .. Issuing price of this share in dubai was much higher than that in Kuwait. Even yesterday I was having a talk to a kuwaiti friend regarding transfering their shares to DFM and sell them here for a higher price, and the answer was that price will be different and each 2.x shares of GFH in Kuwait will be equal to 1 share in Dubai ..
Also this share have reached in 13.xx DH in dubai market and have been tolerated between 5 and 7 DH through the crisses times ..
On the other hand the unexplained drop in this share to 2.01 was crazy and everyone was expecting a high jump after it ..
Above that there is good news comming from the company like raising its capital 300M$ .. and so on ..

However i'm not so sure of what i'm saying .. this is what i hear from here and there ..
Advise me of what you think.. shall I sell tomorrow .. are expecting more loose in this share ? even after all the drop happened last week .. could it keep going on dropping .. ?

Thanks,

[Foreigner]

I can't advise you whether to buy or sell, the choice is yours. However, I can provide some information to you to help you decide..

http://www.gfh.com/en/investor-relations/stocks.html

Shares of Gulf Finance House in Dubai, Kuwait and Bahrain are all the same ordinary shares and should all have the same price. It is not a case of 2 Kuwaiti shares = 1 Dubai share if you convert.

Looking historically they have traded at the same price. For example, on the 8th of June 2008 the Dubai price was 11.1 AED, as was the Kuwait line. The Bahrain line was slightly more at 11.4, but you get the idea, they should all have the same price.

The issue price is meaningless as the shares were issued at different times when the company was worth different amounts as you can see in the above link.

Buying 1 share will give you an ownership of 1 / 1.86billionth of the company regardless of whether you buy it in Dubai, Kuwait or Bahrain.

As such, its cheapest to buy in Kuwait and I would question why anyone would buy the Dubai shares given that the two usually trade in line and for most of this year volume in the Dubai line has been 0.

With regards to the long term profits of the company, they are restructuring to a more conventional investment bank. If the rights issue is successful the company will do well. If it is not then the company may not exist a year from now.

[sharewadi]

[kaveh981]

Hi
I bought GFH at 2.65 but unfortunately I didn't know this company has shares in other stock market I bought it because it was too cheap I know it’s very stupid reason but when I understand that is has a different price from other markets then I was sure it won't go below Kuwait price which is around 1.58 AED as I expected it didn't go and it start a rally I sold it at 2.02 AED because I believed there is a fake rally but I don't know really what was behind this rally and why it touched limit up and there were a lot of people in the queue to buy this share hence it's too expensive in compare with Kuwait and Bahrain any idea ?!
Sorry for my bad English

[OnlineTrader]

Look at GFH two days performance.
Yesterday it touched limit down and closed at limit up, lucky and smart guys who bought it yesterday at low prices must be laughing and flying considering today limit up.

You would not beleive it that I had plan to make an order yesterday early moorning at limit down.
But when market started I completely forgot it.

[kaveh981]

Actually yesterday I made a Sell order on 2.02 and left my computer for 10 minutes and the order was executed
But I was not so regret because I believe this share still too expensive in compare with Kuwait stock market and I’m still waiting to buyback this share at lower price below 2 AED but really I don’t know what’s behind the rally of this share in DFMG in the Kuwait stock market this share has the highest volume every day but almost there is no change in it's price int recent 2-3 days is there anybody can light up on this share?

[Hopless]

Really GFH sucks!

I dont know on what its depending to speculate this much in one week.. from 1 week limit down --> 3 days limit up --> 3 days limit down --> and now 2 days limit up! HOW! i Just want to know HOW! this stock made me lose 30% of my capital in two days! I hate it!

Carla,

[technical]

well, in trying to understand this stock, i was reading articles and some posts here as well. it sounds logical that the dubai GFH price would have to come to parity with the other exchanges where it is listed (is it Bahrain? i forgot). But i remember that there it was listed at about 1.70 or somethin, when dubai is trading at 3 dhs.

Why would one buy at 3 dhs, when you can buy the same share at 1.70? Thus the probable reason to reach that parity and the dubai share price plunging like hell.

Now, since the 1.70 level is the target price, people would think in a technical level that that may be a good support to get in, stop loss somewhere below if it breaches. The markets have been rallying for a few months now, and if it is to be viewed that GFH was stuck at 1.70, then maybe its time it tries to catch up. But then the argument goes against why does it have to reach 1.70 first and not just go to the level where its supposed to be. Maybe it all has to do with the market testing the support. And that what comes down in such a huge way, must also come up and correct. Basic trading technique. during its falls, you could catch up by buying at the lows, then stop loss if it breaches. then buy again at the next low, stop loss when it breaches. thats the gamble.

my 1 fils worth

[OnlineTrader]

I entered GFH at today limit up. !

[sharewadi]

When a stock like Gulf Finance House (GFH) is traded in low quantities then it is more susceptible to manipulation. I'm not saying that's what has happened, just that's it's more likely than with a heavily traded stock like Aldar (ALDAR) or Emaar (EMAAR).

There's an explanation of how to do this in the Dubai stock market game topic from last year (yes that's a game but the principle is the same).

There might be news items, results information, rumours affecting the price but the movements could be more pronounced for stocks with low liquidity. I've made mistakes in the past trying to trade low liquidity stocks and have ended up holding shares that I can only unload with difficulty.

If you're short term trading, stay away from low liquidity stocks.

If you're a long term investor, stay away from any short term comments, rumours, and news. Buy shares only if you think the company is fundamentally sound. And it's unlikely you will find a secondary listing / low liquidity stock in Dubai or Abu Dhabi that is such a bargain it is worth piling in in preference to the more actively traded stocks (most of them are way overpriced compared to the more active stocks on a fundamental basis now anyway).

Remember when short term trading, you are in a competition, you are not investing. If you're not an experienced trader, then getting in to low liquidity stocks is like getting into a boxing ring with Mike Tyson and suggesting you fight without gloves, mouthguard, and head padding.
_________________
UAE IPO list | posting guidelines

[kaveh981]

closed at 1.54 AED in Kuwait almost 3 fils lower than yesterday !

[dov222]

This share caught my eye with its volatility, i dont know if its worth even looking into, since it seems to be heavily manipulated, as pointed out by sharewadi.

This was released yesterday...Oct 28 on their website:

http://www.gfh.com/en/default/gfh-rights-issue-passes-us200-million.html

Foreigner in a post above mentioned that if the rights issue was successful, the stock should do well... It now seems they were successful in doing that.. but the share still tanked today. (10% limit down)

i checked the closing prices in bahrain and kuwait today..
Bahrain: 43 $, or AED 1.58
Kuwait: 0.116 Kd, or AED 1.51

so prices are almost identical now, with the dfm price of the share still slightly higher at 1.62.

It seems the continuous limit downs were due to 'manipulators' purchasing shares from Kuwait, for cheap, transferring them to DFM, and dumping them at higher values.. (im surprised the authorities allow this stuff to happen)

but now that prices are almost equal, i think it should stabilize. Trying to catch this falling knife could be costly, as others have learnt the last 2 weeks. Maybe its better to just stay away altogether.

if it opens on sunday with another limit down, i.e AED 1.46, i might take a few shares there as a gamble.

id appreciate if anyone could shed further light on this case, or if anyone else is considering playing this stock. Thanks

[OnlineTrader]

[dov222]

Honestly, im not sure.
if you asked me yesterday, i would have said no, as it seems illiogical why such a process would exist anyway.
But i found a link in arabic that says that it is in fact happening
will post it if you like.