Drake & Scull International (DSI), the most-traded stock in Dubai, fell after the construction company said it won’t recommend a dividend for 2013.
The shares dropped as much as 4.6 percent, the most since March 12, to 1.65 dirhams, paring losses to 0.6 percent at the close. More than 141 million shares changed hands, almost 2.5 times the three-month daily average. The DFM General Index (DFMGI) rose 1.6%.
“The market was expecting a dividend,” Taher Safieddine, an analyst at Shuaa Capital PSC in Dubai, said by phone. “It was a surprise especially for retail investors.” With the balance sheet “in decent shape, at the end of the day you would expect a dividend,” he said. Safieddine rates the stock hold with a price estimate of 71 fils.
Construction companies in the United Arab Emirates have benefited from a real estate rebound in Dubai and increased government spending across the Gulf region. Drake & Scull’s 2013 profit climbed 61 percent on a jump in contract awards. It had a total order backlog of 12 billion dirhams ($3.27 billion) at the end of December with growth driven by operations in Saudi Arabia and the U.A.E.
The shares have more than doubled in the last 12 months, gaining 19 percent this year and trailing the benchmark DFM General Index’s 34% increase in the same period.
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