Dubai's Shuaa Pauses Some Deals As Virus Causes Strategic Shift

Shuaa Capital stepped away from some deals as the Dubai-based investment company switched its short-term strategy in the wake of the economic fallout from the coronavirus pandemic.

“All the plans have changed” over the past six months, chief executive officer Jassim Alseddiqisaid in an interview with Bloomberg TV. The firm is focused on its main businesses and on becoming more efficient, he said.

The company “put off few of the transactions that we have been looking at, in terms of acquisitions or mergers,” but would “revisit opportunities as they come up,” he said.

Shares in Shuaa declined as much as 3.9%, the most since July 29, before paring losses to trade 0.8% down as of 10:55 a.m. in Dubai.

Shuaa posted a profit of 267 million dirhams ($73 million) for the second quarter, compared with a loss of 32 million dirhams a year earlier, which was related to its merger with Abu Dhabi Financial Group.

The CEO also said:

• Shuaa has recovered a “big portion” of a financial hit of 160 million dirhams it took during the first half for mark-to-market loss on equities after markets rebounded.
• “We see a lot of deals right now, mostly on restructuring, mostly on disposals, mostly on debt advisory,” which helped the company during the downtime related to the coronavirus.
• “Across the region, real estate has suffered. I believe it will take some time to turn back to where it was,” even though there is “pent up demand on higher quality rental products. The real estate market is becoming even more mature and more selective.”