Shuaa Capital financial statements on the DFM website this morning. No press release received.
Shuaa lost AED 269 million for the quarter, which is an improvement on the AED 375 m loss for 2008 Q3. Most of the loss attributed to Impairment Charges of AED 259m, the same amount as in 2008 Q3. Investment income, interest income, and commissions and fees income all fell by about 50%-70% compared to the same quarter in 2008, but Shuaa also managed to cut General and Administrative expenses substantially, hence the resulting fall in losses.
I wonder if Dubai Banking Group are pleased with their investment after Shuaa's results this quarter.
Shuaa shares are 10% limit down at AED 1.77 in the first hour of trading this morning, with no sellers in the queue. The Dubai market is down about 3%-4%.
DFM 01 November 2009:
(SHUAA) Shuaa Capital: Discloses its reviewed interim condensed consolidated financial statements for the period 30/09/2009
Dubai's Shuaa Capital narrows loss in third quarter
by Amran Abocar
Dubai-based investment bank Shuaa Capital (SHUAA) reported a narrower third-quarter loss on Sunday, partly on improved performance in its asset management and private equity segments.
The investment bank reported a net loss of 269.7 million dirhams in the third quarter. That compared to a loss of 438.5 million dirhams in the prior-year period.
Shuaa said it had nine-month loss of 383.4 million dirhams, that compared with 319.3 million dirhams in the same period in 2008.
So far the main income came from services and gains on their own investment portfolio.
Fees are down aprox 75% because the size of their managed funds went down 80%, also they used to make lot of money on promoting and managing IPOs... no new IPO's for sometime now
Their investment portfolio is now doing Ok, but it lost 70% of its value during the tough times
On the other hand, the cost of operation is not cheap...they cut a lot already. May be it will show in 4Q results
As for Dubai Banking Group (DBG), I think they had no choice because the bonds were mandatory convertible at fixed price. So I believe Shuaa would have won the court case. Even if Shuaa would have lost, I doubt that they would have been able to pay back. Much of the money was invested in the stock market. May be the best option for DBG was to lower the conversion rate of the bonds from 6 Dhs per share to 2.91. Then DBG can hope that some day Shuaa share price will be back to 3 dhs
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