Emaar retreats as dividend proposal disappoints
Source: BI-ME with Bloomberg , Author: Posted by BI-ME staff
Posted: Tue March 20, 2012 1:41 pm

UAE. Emaar Properties retreated the most in two weeks after a 10 fils cash dividend for 2011 proposed by the board of the United Arab Emirates’ biggest developer fell short of investor expectations.

Emaar, developer of the world’s tallest tower in Dubai, slumped 2.6%, the most since March 7, to AED2.97 at the 2 p.m. close in the emirate.

The decline dragged Dubai’s DFM General Index 1.5% lower to 1,643.31. Emaar also paid a 10 fils dividend for 2010 after it hadn’t initially proposed one. That decision was made after a heated three-hour meeting between shareholders and executives.

“There were speculations about dividend as high as 15 fils,”  Dubai-based Fadi Al Said, who oversees US$250 million as senior investment manager at ING Investment Management for the Middle East and North Africa, told Bloomberg.

“Since the company maintained the dividend, it may be a positive sign that it’s comfortable with its financial position.”

Emaar, owned 31% by Dubai’s government, didn’t distribute dividends in 2009 and 2008, according to data compiled by Bloomberg. Its profit plunged 89% and 54% those years, respectively, as the company that derives more than 90% of revenue domestically suffered when Dubai’s real-estate crash dragged home prices down 65 percent from a mid-2008 peak. 

The developer said last month its fourth-quarter profit more than doubled to AED716 million (US$195 million), beating analysts’ estimates. Recurring income from hotels and malls grew to 41 percent of revenue last year compared with 24% in 2010.

The shareholders are scheduled to meet on April 23 to discuss the dividend proposal, the company said in a statement to the Dubai Financial Market today. Emaar said yesterday that it may expand its board to 11 members from eight and replace four directors.

Emaar’s shares have gained 16% this year compared with a 21% advance for the benchmark Dubai Financial Market General Index. Fifteen analysts recommend investors buy Emaar shares, two have a hold rating and one a sell recommendation, according to data compiled by Bloomberg.

 

MIDDLE EAST BUSINESS COMMENT & ANALYSIS

date:Posted: December 18, 2014
UAE. The level of consumer trust in insurers is 52%, compared to 73% for supermarkets, and 71% for banks; 32% in UAE and 49% in KSA likely to switch insurers in the next 12 months.
date:Posted: December 17, 2014
INTERNATIONAL. Russians don't respond to economic pressure as Westerners do. Sanctions reflect European and American thresholds of pain. They are designed to cause pain that the West could not withstand. Applied to others, the effects may vary.
date:Posted: December 17, 2014
SAUDI ARABIA. In general, the lack of certainty regarding damages means the litigation risk is significantly higher in Saudi Arabia compared with other jurisdictions. In comparison, however, the level of damages awards remains much lower.
dhgate