Vijay Valecha, Special to Gulf News October 27, 2021
Dubai: Here’s an alert for UAE stock market investors – do not get swayed by what you hear or read on social media about the listed companies they have invested in.
Two DFM-listed companies have issued such warnings in the last few days. And both have said they will consider legal actions against anyone publishing ‘misleading information’ about the company, the board members or employees.
Union Properties on Sunday issued such a statement, while earlier Gulfa General Investment Co. did the same after the shares came under investor spotlight following certain talk that showed up in social media space.
Union Properties’ stock has been through some intense volatility in these last 48 hours. On Monday morning, the stock was down nearly 1 per cent after news emerged of a federal investigation. But by afternoon, the developer’s stock had effected a smart improvement, eventually closing 2.34 per cent up to Dh0.26 and just off the 52-week low of Dh0.23.
Investors might have been assured by Union Properties’ statement, which tackled directly some of the speculation that has been going on about some recent decisions. In particular, some of the asset disposals the Board of Directors decided to go ahead with last year.
On Sunday, UP called on shareholders “not to be deceived by news on social media or electronic forums regarding the company’s news, its financial situation, rumors of its bankruptcy and business cessation, or any other such rumors. The company confirms that it will take legal measures against anyone who publishes misleading information about the company, its board members or its employees, in accordance with the provisions of the law.”
Today (October 26) is quite a decisive one for UP’s Board of Directors and some of its shareholders. The developer has called a shareholders’ meet where they will vote on a motion whether to change the current Board of Directors. This followed submissions given by two sets of shareholder groups.
Gulfa General Investment Co – formerly Gulfa Mineral Water and Processing Industries – has been subject to much speculation. The change of name as well as the strategic priorities of the company, which was done after a June decision, had much to do with it.
In last week’s statement, the Board of Directors took on the social media chatter head on: “With reference to what is circulated on one of the websites and social media, regarding the activities of Gulfa General Investments, its investment portfolio and the formation of its board of directors, the company would like to assure all shareholders and valued investors that the current board was elected by the general assembly on 30th December 2018.
“The management also obtained the approval of the General Assembly on 22/9/2019 to amend the company's name and change its main activities to investing in various investment activities instead of the previous activity of water production. The company obtained the approval of the Securities and Commodities Authority to amend the company's name and change its activities in accordance with the disclosure issued by the company on Dubai Financial Market on 9/21/2020.”
And then, the Gulfa statement took on those who might be behind the social media speculations – “The company calls upon all shareholders and valued investors to obtain information about the company from official sources and not to be deceived by news on social media…”.