Abu Dhabi — Mubasher: Abu Dhabi-based banks are projected to pile further pressure on Dubai’s already-hit equities.
The merger deal between Abu Dhabi Commercial Bank (ADCB) and Union National Bank (UNB), set to be closed on 1 May, could attract up to $193 million from investors who track benchmarks compiled by MSCI Inc. and FTSE Russell, Bloomberg News reported on Wednesday, citing an equities strategist at EFG-Hermes Holding.
The combined entity, that will later take over a privately-owned Al Hilal Bank and will create a lender with around $114 billion in assets, could lead to excluding three Dubai stocks from MSCI’s benchmarks, Mohamad Al Hajj said in a report.
Over the course of the previous year, investors’ abiding worries over Dubai’s real estate market have weighed on Emaar Development, Emaar Malls, and Damac Properties, the New York-based news agency noted, forecasting potential investor outflows for these stocks to total $194 million.
In the same vein, First Abu Dhabi Bank seeks to increase its foreign ownership limit to 40% from 25%.
If the UAE’s biggest lender takes this step before mid-April, there is a “very high likelihood” the three stocks could be delisted from MSCI’s indexes as soon as May, Al Hajj said.