DNIR foreigners ownership

[sharewadi]

DNIR to allow foreigners to own up to 30% - EGM 22 Mar 2006

Dubai National Insurance and Reinsurance (DNIR) - not the same company as Dubai Islamic Insurance and Reinsurance (AMAN) are intending to allow foreign ownership of up to 30%...

But no date given for when foreigners can start trading. As of the EGM? Cash dividend of 75% for shareholders of record on 28 Mar 2006 is tempting. Couple of other notes...

• Close price today was 7.10 dhs.
  
• 10:1 share split November 2005 (I think).
  
• Current price close to 52 week low (30 Jan 2006 low of 6.70 dhs, 02 Apr 2005 low of 50 dhs equivalent to 5 dhs post split).
  
• 2005 profit of 306M dhs. 100M shares outstanding gives EPS of about 3.06 dhs.
  
• Current PE is ~7.10/3.06 = 2.32. That seems to be so low I'd be more likely to believe there's an error in my calculations. But... EFS weekly report from a week or two ago gives same figure. And P/B of 1.26. Not quite the lowest P/B of the insurance sector but easily the lowest PE.
  
• And 75% cash dividend on a par value of 1 dh gives 0.75/7.10 = 10.6% yield.

More investigation needed...
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[sharewadi]

From the Dubai National Insurance (DNIR) 2005 FY financial statements

• 2005 profit of 306M was 280% up on 2004 profit of 80.4M.
  
• 2004 dividend was 51.5% stocks.
  
• 2005 gross insurance premium was 117M, only a slight increase on 2004 figure of 105M. I'm guessing then that most of the increase in profit for 2005 came from investments. Will look at company accounts later.
  
• Chairman is Mr Khalaf Al Habtoor. As far as I know, the Al Habtoors have generally done a pretty good job of turning a profit over the years.
  
• Last paragrah says company has undergone a major restructuring process and intends to concentrate on underwriting of a high quality business for 2006. Whatever that means. Sounds good though .

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[sharewadi]

• 2005 profit from investment 302M dhs. 2004 was 74M dhs. So now we know where all the profit came from.
  
• They have 136M cash/bank deposits and 408M available for sale investments - presumably shares.
  
• They've also got 67M investment properties which is new for 2005.

Ok, still looks promising although I'll be very interested to see what 2006Q1 results are like. If their investments are local markets then they might have taken a bit of a hit.

Next job, have a look at historical earnings, EPS, PE and P/B to see how that all compares.

And find out if foreigners can actually buy DNIR now.

Tried phoning EFG-Hermes, answer: not presently and they don't know when but probably not before dividend distribution.

Will try phoning DNIR 04-2691300 ...
... operator ...
... investor relations ...
... wrong department, go back to operator and ask for Ms Ginwa? (ext 302) ...
... Ms Ginwa says resolution agreed but company needs to clear with various departments/ministries etc. Check again next week. Looks like it won't happen before dividend payment then .

Well, on the bright side, most shares seem to have taken a bit of a drop immediately after record date for dividends - more than you'd expect after revaluation after allowance for dividends.
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[sharewadi]

DFM 02 May 2006:

(DNIR) Dubai National Insurance and Reinsurance allows GCC citizens to own & trade 30% of companys shares

So only for GCC nationals. Which is sort of odd because I thought there was a recent rule that allowed GCC nationals to buy any shares on the UAE market as though they were UAE nationals. It may be that individual companies still choose whether or not to implement that rule. That would be similar to the law that allows any nationality to buy shares in any UAE company subject to company's own decision on ownership but then that makes the rule for GCC nationals redundant ?

And when I phoned DNIR a while ago, they didn't mention any restriction on nationality. I'll update if I get any different information.

Note that some brokers won't trade DNIR (or many other insurance companies) because apparently they are not Sharia compliant.
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[sharewadi]

I spoke to Mr Yousef Ramez in the Dubai National Insurance (DNIR) investor relations department today.

I understood from him that GCC nationals are the only foreigners that can own DNIR shares at the moment - because there is a Minstry of Economy ruling that says UAE insurance companies cannot allow non-UAE or GCC nationals to own shares (IAIC is maybe an exception because it is large and/or long established - and it's only recently that they allowed foreign ownership anyway).

This may change as a result of talks regarding FTAs (Free Trade Agreements) and so on.

So that's a little different from my previous understanding that any company could allow foreign ownership of shares. Oh well.

Arab Insurance Group (ARIG) which is also listed on the Dubai Financial Market (DFM) is different I guess, as it's not a UAE insurance company - it's based in Bahrain.
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