Losses for 4Q are 96.6 Fils ...Totally unexpected and smells very bad ...they can't just make this kind of losses in 1Q
The losses are higher than the current market capitalization of Dhs 764m
It does not mean that Tabreed is banrupt...not yet
The book value of Tabreed will drop now from Dhs2.1b to about Dhs 1B...
So far this is the largest ever losses recorded in DFM (as a % of company size). It will impact the investor sentiment for sure as Tabreeb was operating at a low and very stable sector
I am guessing that's why DFM's move to include dhs0.001 stock price changes is for the likes of Tabreed.
If it gets any worse, maybe they'll have to introduce a dhs0.0001 change for some stocks!
It goes back to what i have been saying for a while now, and that is stick to the stocks/companies, that you know will get paid for their goods/services they deliver. Tabreed is a typical example of delivering but not getting paid.
Again, airarabia is one of a few stocks/companies that has a guaranteed repeat revenue stream.
I feel for anyone holding Tabreed right now!
Cheers GPIC
Last edited by GPIC on Mon 08 Mar 2010 11:09; edited 1 time in total
Discussions on 80% Capital reductions or dissolving the company. This is the most serious case in DFM life so far. Much worse than Tamweel and Amlak
Sad day for Tabreed today. .
I guess that's why its always better to wait until the results are out and then at least you know what you have to deal with, at least for the next quarter.
Its always better to invest in companies that you know have a very strong balance sheet before you put your own money on the table.
When i saw the DFM last, there was over 6m Tabreed offered for sale. No buyers. Not good.
Stocks that have nothing related to property/construction are the safest bets in these uncertain times.
So far this is the largest ever losses recorded in DFM (as a % of company size). It will impact the investor ...
If iam not mistaken according to UAE low if a company losses more than 50% of its capital it should announce banrupcy or resturture the company capital again, like what happened to Shuaa Capital.
Dubai Financial Market is including dhs0.001 stock price changes coz they realized at lat that the market is going to record a new low and its only a matter of time.
This move is going to be only contributed by Emaar that could reach 3.55/3.68/3/71 and even 4 and I estimate that would be the last move for our markets
If iam not mistaken according to UAE low if a company losses more than 50% of its capital it should announce ...
Yes, Tabreed board will discuss with investors 80% capital reduction or dissolving the company
Ironically, if they dissolve the company, the shareholders might get more than the current market price IF and only IF the assets are sold at book value...
Tabreed investors paid 1 dhs for every share 13 years back and never got 1 fils devidend..the company has booked more than Dhs 1.5B of profit over the years which were all kept for further investment.
When DEWA changed its pricing to the slab model 18 months back, I write here in the forum about the possible impact on Tabreed fixed price contracts and the general feasibility on district cooling where Tabreed buys power at the highest price slab while individual consumers enjoys much 30-40% better pricing if they buy their electricity directly from DEWA
The big question is how can they lose 90% of capital in 1Q ?
Certainly this is not a surprise that suddenly hit the company, the big guys who would have known about this months in advance...it is the smaller investors that are footing the bill of the huge salaries and bonuses and the great management team !
Many have always thought Tabreed is a low risk co operating in a stable sector where demand can never drop
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for anyone holding Tabreed right now!
