Depa, the interiors company fitting out the world's tallest tower, cancelled more than 12 million shares yesterday that it had repurchased after saying the stock was undervalued. The move represents another setback for NASDAQ Dubai, where the company lists its shares, as the exchange struggles to overcome low trading volumes. The UAE interiors contractor, which is fitting out Burj Dubai, said in a statement on the NASDAQ Dubai website that it believed its shares were significantly undervalued. "A key issue is low trading volumes," said Roy Cherry, a vice president of research at Shuaa Capital in Dubai. "Improving the performance of NASDAQ Dubai might do the stock a bigger favour than buying back shares. The real and most obvious alternative is Dubai Financial Market. Management have also said they would consider taking Depa private again and delisting." Depa plans to cancel subsequent repurchased shares on a quarterly basis, the company said in the statement. The cancellation means Depa's free float has fallen by 2.6 per cent, from just over 454 million shares to just over 442 million shares. Depa's shares have fallen 51.8 per cent in the past 12 months, and were at US$0.598 each yesterday. NASDAQ Dubai, formerly known as the Dubai International Financial Exchange, is striving to position itself as the pre-eminent financial marketplace in the Gulf after its launch in September 2005, when it became the region's first exchange to be opened to investors and issuers from all over the world. It was hoped that the listing of DP World, the Middle East's largest port operator, in November 2007 would help increase its international visibility. But Depa's share cancellation has added to the challenge facing the NASDAQ Dubai chief executive Jeff Singer as he tries to boost daily trading activity. The DP World chairman, Sultan Ahmed bin Sulayem, said on March 25 that the company would "evaluate all available options" to address its declining market value. In May, Dubai World said it was in talks to sell a stake in DP World, NASDAQ Dubai's biggest stock by far. The chief executive of Depa, Mohannad Sweid, told Bloomberg last month that the company was considering ways of halting a decline in its share price and increasing the trading volume. NASDAQ Dubai declined to comment and nobody was available to comment at Depa yesterday beyond its statement to the exchange. "Things are not going as well as they would like and they are probably trying to devise a solution, and a successful resolution would be important for existing companies and for attracting new companies, as the present experience is not very encouraging," Mr Cherry said. Depa repurchased its shares between November 27 last year and June 30 after shareholder approval of a repurchase programme at the company's general meeting on November 5. It announced on November 26 that the repurchase programme would last for a period of 12 months. Depa had a backlog of Dh3.2 billion (US$871 million) in projects from the first quarter of this year, according to an estimate in a research note published by Morgan Stanley in June. business@thenational.ae