Tuesday, Mar 30, 2010

(Recasts. Adds comments, detail, share price.)

DUBAI (Zawya Dow Jones)--Dubai-based investment bank Shuaa Capital PSC (SHUAA.DFM) will exit most of its remaining 1.2 billion U.A.E. dirhams ($326.7 billion) of direct investments during the coming 12-18 months to focus on fee generating business, a top official of the company said Tuesday.

"Shuaa Capital now is moving away from investments that hurt us in the past and to focus more on fee generating business," Chief Executive Sameer Al Ansari said at a media round table.

Shuaa has reduced its investment portfolio from AED2.4 billion to AED1.2 billion as of end 2009, Ansari said. "We are in talks to sell some of the remaining AED1.2 billion investments. These are significantly de-risked and valuations are market driven. We're looking at an orderly exit for what is left in the portfolio but we don't have to do distressed asset sale," he explained.

Shuaa has signed mandates for lead arranging three initial public offerings, or IPOs, one of which is expected in the market in few weeks. "We have signed three IPO mandates. You'll hear of the first one in few weeks on the Abu Dhabi market," Ansari said.

While the company is focusing on the United Arab Emirates and Saudi Arabia, it is also looking at expanding in Qatar. "U.A.E. is our home land. Saudi Arabia is the elephant in the room. We also have an investment in Qatar that we may use to expand into the country," Ansari said.

Shuaa expects to swing back into profit in 2010 after it managed to narrow full year net loss to AED529.8 million from a loss of AED889.6 million a year earlier, he said.

Ansari noted that out of last year's loss, only AED7 million was operations while the bulk was provisions. "The priority was to stop the bleeding whether it is clients, employees or funds and to deal with the risk that we were facing at the time," Ansari said.

"The priority was to clean the balance sheet and to start exiting some of the non-core investments," he added.

Shares of Shuaa closed up 8.9% at AED1.47 a share Tuesday on the Dubai Financial Market.

"The market still believes we're a company in trouble. We still trade below fair value and our shares are significantly undervalued," he said.

-By Mirna Sleiman, Dow Jones Newswires; +9714 446-1698; mirna.sleiman@dowjones.com

Copyright (c) 2010 Dow Jones & Co.

(END) Dow Jones Newswires

30-03-10 1157GMT