Tamweel surges on speculation drop in past two days overdone

Tamweel PJSC, the home finance company majority owned by Dubai Islamic Bank PJSC, rebounded on speculation a 19 per cent slide in the past two days after a more than two-year suspension was overdone.

The shares rose six per cent to 85 fils at the 2pm close in Dubai, after earlier rising as much as 13 per cent. Tamweel tumbled 19 per cent in the first two trading sessions since November 20, 2008.

“Investors started seeing value at current prices,” said Mohammed Galal, head of foreign institutional sales trading at HC Securities in Dubai. “Whether it’s sustainable or not is yet to be seen, but my take is that it’s not, as it seems that the buyers were mostly looking for a fast buck. Nevertheless, I don’t think today’s lows will be seen again for the short to medium term at least.”

Shares of Tamweel and Amlak Finance PJSC, another Dubai- based Islamic mortgage provider, were halted after the government announced plans to merge the two companies and inject money to help them cope with the global financial crisis. They stopped lending as the crisis froze credit markets and blocked their access to funding. The merger plan was abandoned in September after Dubai Islamic Bank increased its stake in Tamweel.

Dubai Islamic retreated 0.9 per cent to Dh2.16.