Abu Dhabi Islamic Bank PJSC (ADIB) fell the most in eight months on speculation the United Arab Emirates’ second-biggest shariah-compliant lender may recommend a full- year dividend that’s below expectations.
The stock retreated 3.1 percent, the biggest drop since April 12, to 3.08 dirhams at the close in the U.A.E. capital. About 2.56 million shares were traded today, more than 13 times the three-month daily average. Abu Dhabi Islamic was the biggest decliner in percentage terms on the benchmark ADX General Index (ADSMI), which rose less than 0.1 percent.
The lender last month raised $1 billion from the sale of Tier-1 perpetual sukuk, which don’t mature, paying a coupon of 6.375 percent. The notes, which can be treated as equity, come as Abu Dhabi Islamic seeks to boost its Tier-1 capital ratio to more than 15 percent from 13.7 percent at the end of September as part of plans to expand lending. The lender paid a 0.2442 dirham cash dividend for 2011, data compiled by Bloomberg show.
“Investors are worried the 2012 dividend won’t meet expectations,” said Nabil Farhat, a partner at Abu Dhabi-based Al Fajer Securities. “This is especially after the increasing interest payment on new debt acquired.”
Abu Dhabi Islamic, whose shares have dropped 2.5 percent this year, reported a 3 percent advance in third-quarter profit. Tier 1 capital, which guards against business losses, includes common stock, retained earnings, and perpetual preferred stock and debt.
One analyst recommends investors buy the shares of Abu Dhabi Islamic, while three have a hold rating on the stock and one advises selling it, according to data compiled by Bloomberg.
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