Shariah Capital may consider opportunities outside of Shariah amidst delisting of shares (By IFN)

GLOBAL: Shariah Capital, which proposed to cancel the admission to trading of its shares on London’s Alternative Investment Markets (AIM), has said that the firm may consider new opportunities outside of Shariah as it seeks to preserve its business.
In a filing to the exchange, the firm said that following careful consideration, its directors concluded it is no longer in the best interest of the company or its shareholders for the company to maintain its listing, taking into account the illiquidity of its shares, a projected difficulty by the firm to attract equity investments, or other forms of investments, through its listing; and the low trading volumes of the shares.

“The directors estimate that the annual direct and indirect costs of admission are at least US$300,000 per annum,” it said, including for listing expenses and advisory, legal, insurance, compliance and audit fees. It added the amount of senior executive time spent in relation to regulatory and compliance requirements associated with maintain its listing is disproportionate to the benefits of its listing.

Following this, the firm, which is headquartered in the US and has regional operations in Dubai, said that it intends to protect its cash position, which amounted to US$4.1 million as at the 31st July 2012, as it attempts to wait out the uncertain financial environment, preserve its Shariah franchise and seek new business opportunities.

However, it also said that: “This may include opportunities outside of its Shariah operations which the board believes will become increasingly prevalent should, as the board expects, market conditions continue to stay the same or worsen.”

Shariah Capital, which manages the DSAM Kauthar Funds through its joint venture with the Dubai Multi Commodities Authority, noted that the business environment in the Gulf, global stock markets and commodities had materially worsened since June this year, when it announced its 2011 financial results. It reported its fifth straight year of losses in that year, amounting to US$463,984 against US$353,954 in 2010; impacted by the Eurozone debt crisis and Gulf investors’ reluctance to invest in hedge funds.

The company, which published a circular on the planned cancellation of its shares, will convene a special meeting on the 23rd August to seek shareholder consent on the move. Should it receive shareholder approval, the firm expects trading of its shares on AIM will cease on the 4th September; with the cancellation effective on the 5th September.

See: http://redmoney.newsweaver.co.uk/1x441yjow57h38rwoni3wx?email=true&a=6&p=26460365&t=21782365