Ammon News - AMMONNEWS - Arab Bank’s share price on Thursday continued its upward trend this week, with analysts attributing it to stock repurchase by key shareholders at Jordan’s largest financial institution.

On Thursday, the share price at the Amman Stock Exchange (ASE) of the Arab Bank increased by 4.9 per cent to close at JD7.36.

Last week, when the bank’s chairman Abdel Hamid Shoman resigned from his post, the stock price of the bank went down to JD6.68.

Shoman’s resignation due to disputes with top management sent worrying feelings among investors as the financial house has always been linked to the Shoman family, particularly the late Abdul Hameed Shoman who founded the financial firm in Jerusalem 82 years ago.

In addition to the financial institution’s strong financial fundamentals, the share price of the bank has been on the rise because some major shareholders are buying basic shares on the financial market to give the bank more credibility, said Ali Tabbalat, financial analyst at Capital Investments.

The expert ruled out market speculations as a driver behind the recent increase in the Arab Bank’s stock price.

“People were worried about their investments and tended to sell their shares after Shoman resigned,” Tabbalat explained, adding stability of the bank, which is among the largest financial institutions in the Arab world, is crucial to ASE performance.

“The Arab Bank is not only a heavyweight at ASE but also a safety valve for Jordan’s economy,” the analyst said.

Describing stock purchase by key shareholders as a “good move” to send positive sentiments in the market, Tabbalat indicated that an expected new management at the bank may further boost its performance in the short and long terms.

Another financial analyst familiar with Arab Bank operations, who preferred to remain unnamed, confirmed that a top Jordanian shareholder is buying Arab Bank stocks to prove that the institution is solid even without the Shoman family.

Commenting on media reports that investors from the Gulf region, particularly from Qatar, are planning to purchase part of the bank’s stake, the analyst said that Arab investors have always had an appetite to buy stocks in the bank, which will remain based in Amman, he said, because Jordanians own the largest share.

The Social Security Corporation is the largest shareholder as it owns around 20 per cent, followed by the family of former Lebanese prime minister Rafik Hariri with nearly 19 per cent.

With a capital of over $30 billion, the bank operates through more than 500 branches in 30 countries across five continents.

During the first half of this year, the Arab Bank Group reported a 10 per cent growth in net profit to $360.3 million compared with $327.2 million during the same period of 2011.


* Jordan Times/ Omar Obeidat