Emaar Properties PJSC (EMAAR) advanced to the highest level in more than six months amid investors’ bets the builder of the world’s tallest tower may follow Abu Dhabi- based Aldar Properties PJSC (ALDAR) in paying a dividend.
The shares rallied as much as 2.7 percent to 3.02 dirhams before paring gains to 2.98 dirhams, the highest since Aug. 4, at the 2 p.m. close in Dubai. The benchmark DFM General Index (DFMGI) climbed 1.2 percent. Emaar, which reported a more than doubling in fourth-quarter profit after trading hours, has the biggest weighting on the index.
Aldar, the developer bailed out twice by the Abu Dhabi government last year, fueled speculation on Emaar’s dividend after it recommended a 2011 dividend of 5 fils a share, said Haissam Arabi, Dubai-based chief executive officer at Gulfmena Investments. Emaar’s earnings statement didn’t mention a dividend recommendation.
“Even a company that’s supposed to be having difficulties managed to pay dividends, so that sets the bar for all other companies, Emaar in particular,” he said. “They have to do better than that because Emaar is not a troubled company.”
Emaar, which last year agreed to pay its first cash dividend since 2008 bowing to shareholder demands, said quarterly net income surged to 716 million dirhams ($195 million). The average estimate of five analysts was for a profit of 460 million dirhams, according to data compiled by Bloomberg.
Aldar reported a 2011 profit of 642.5 million dirhams after a year-earlier loss of 12.7 billion dirhams as it sold more land and properties to the state. The average estimate of eight analysts was for a profit of 494 million dirhams, according to data compiled by Bloomberg.
Aldar shares surged 5.1 percent to 1.04 dirhams, the highest level since Nov. 16.
To contact the reporter on this story: Alaa Shahine in Dubai at firstname.lastname@example.org
To contact the editor responsible for this story: Claudia Maedler at email@example.com