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73514
Mon, 08/03/2009 - 15:58
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https://www.oananews.org//node/73514
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Ajman Bank plans to subscribe to Dubai bonds' second tranche
Ajman, Aug 3, 2009 (WAM) - Ajman Bank, which has Dh1 billion in cash from its public issue proceeds, is considering to subscribe to a part of the second tranche of US$20 billion (Dh73.46bn) high-yield bonds of the Government of Dubai, said a senior bank official.
This may probably make Ajman Bank the first UAE bank to invest in the high-yield bonds issued by the Government of Dubai to meet the liquidity needs of government-linked entities.
Speaking to Emirates Business, Ali E Alshaqoosh Al Mueen, Acting Chief Executive Officer of Ajman Bank, said the bank is cash rich and needs to invest in some profitable venture. It could invest in the Dubai Government bonds, he said.
When asked whether the bank will buy Dubai bonds, Al Mueen said: "We can consider them. To achieve some profitability, we need to invest some of the liquidity and buying bond is one way of investment. We have to better analyse them as an investment and take a joint decision. We have full faith in the UAE Government and the Government of Dubai."
The Government of Dubai launched US$20bn bonds in February this year. The first US$10bn tranche was subscribed by the UAE Central Bank and the remaining second tranche of the same amount is open for subscription to local as well as international financial institutions inside and outside the country, Abdulrahman Al Saleh, Director General of Dubai's Department of Finance, said last month.
Al Mueen said as a new bank, "most of the capital is maintained with us, so the bank actually is very liquid. We have a lot of funds in customer deposits, which we can invest on their behalf. We're focused on the right opportunity to provide liquidity for finance".
The bank has not allocated any specified amount to buy the bonds, the official clarified.
He said the bank, which began operations early this year, is on track to reach breakeven at the end of its first financial year.
Al Mueen said: "We hope to break even in the fourth quarter; that's our main objective. We have got a lot of support from board members and every member is involved proactively to make the bank successful."
The bank posted a loss of Dh11.6 million in first quarter of this year. Second quarter results are expected to be announced this week.
The bank stock remained unchanged at Dh1.1 on the Dubai Financial Market yesterday. More than 8.8 million shares changed hands in 140 trades.
This may probably make Ajman Bank the first UAE bank to invest in the high-yield bonds issued by the Government of Dubai to meet the liquidity needs of government-linked entities.
Speaking to Emirates Business, Ali E Alshaqoosh Al Mueen, Acting Chief Executive Officer of Ajman Bank, said the bank is cash rich and needs to invest in some profitable venture. It could invest in the Dubai Government bonds, he said.
When asked whether the bank will buy Dubai bonds, Al Mueen said: "We can consider them. To achieve some profitability, we need to invest some of the liquidity and buying bond is one way of investment. We have to better analyse them as an investment and take a joint decision. We have full faith in the UAE Government and the Government of Dubai."
The Government of Dubai launched US$20bn bonds in February this year. The first US$10bn tranche was subscribed by the UAE Central Bank and the remaining second tranche of the same amount is open for subscription to local as well as international financial institutions inside and outside the country, Abdulrahman Al Saleh, Director General of Dubai's Department of Finance, said last month.
Al Mueen said as a new bank, "most of the capital is maintained with us, so the bank actually is very liquid. We have a lot of funds in customer deposits, which we can invest on their behalf. We're focused on the right opportunity to provide liquidity for finance".
The bank has not allocated any specified amount to buy the bonds, the official clarified.
He said the bank, which began operations early this year, is on track to reach breakeven at the end of its first financial year.
Al Mueen said: "We hope to break even in the fourth quarter; that's our main objective. We have got a lot of support from board members and every member is involved proactively to make the bank successful."
The bank posted a loss of Dh11.6 million in first quarter of this year. Second quarter results are expected to be announced this week.
The bank stock remained unchanged at Dh1.1 on the Dubai Financial Market yesterday. More than 8.8 million shares changed hands in 140 trades.
