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Amlak plunges on trade resumption

Shares in Dubai Islamic mortgage provider Amlak Finance fell sharply as they resumed trading on Tuesday after being suspended for nearly six years.

The stock tumbled as much as 23.5 percent shortly after opening but then pared losses to 14.7 percent. It topped trading volumes on the emirate’s bourse, whose main index slipped 0.2 percent.

Trading in Amlak, part-owned by Dubai’s biggest developer Emaar Properties, was halted as credit markets dried up and the emirate’s real estate prices began a near-50 percent tumble from their peak.

 The shares last traded at 1.02 dirhams on Nov. 20, 2008, having fallen 79 percent in the preceding six months. The suspension left many investors stranded and they may now want to free up their money.

The outlook for Amlak and the general business environment has improved greatly since 2008, but the company blamed amortisation charges for a 77 percent drop in first-quarter profit this year. A sum of 911 million dirhams ($248 million) related to its restructuring will be amortised over 12 years, keeping pressure on profits.-Reuters