Share Repurchase Planned by Abu Dhabi's IHC as Stock Price Corrects

International Holding Company (IHC), a conglomerate based in Abu Dhabi, is considering a share buyback program in response to a recent cooling of its stock price following a meteoric rise.

The company's CEO, Syed Basar Shueb, expressed confidence in IHC's future potential in a recent interview. He stated the buyback program, valued at Dh5 billion dirhams (US$1. 4 billion), is intended to reinvigorate the share price. Shueb explained the program would serve a dual purpose:enhancing the company's earnings per share and providing an exit opportunity for shareholders who may have missed out on the significant stock price growth experienced over the past year.

IHC announced the share buyback program earlier this month. The move comes after a period of relative stagnation for the company's stock price, which has remained range-bound for nearly two years. Despite this recent stability, the share price still sits at a much higher valuation compared to many established global firms. For instance, IHC's price-to-book ratio is currently at 7, significantly exceeding Berkshire Hathaway's ratio of 1. 57.

Shueb elaborated on IHC's diversification strategy, highlighting its investments across various sectors including Elon Musk's SpaceX and Zambia's Mopani copper mine. He also revealed plans for a potential listing of Daman Insurance, a subsidiary of IHC's healthcare holding, PureHealth Holding PJSC.

The phenomenal 43, 000% surge in IHC's stock price has inevitably led to a period of correction. The company's leadership believes the share buyback program will not only stabilize the stock price but also demonstrate confidence in IHC's long-term prospects. The program's success hinges on effectively balancing the need to reward existing shareholders with maintaining the company's financial health.

Previous Article Next Article