March 20 (Bloomberg) -- Emaar Properties PJSC 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 percent, the most since March 7, to 2.97 dirhams at the 2 p.m. close in the emirate. The decline dragged Dubai’s DFM General Index 1.5 percent 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,” said Dubai-based Fadi Al Said, who oversees $250 million as senior investment manager at ING Investment Management for the Middle East and North Africa. “Since the company maintained the dividend, it may be a positive sign that it’s comfortable with its financial position.”
Emaar, owned 31 percent by Dubai’s government, didn’t distribute dividends in 2009 and 2008, according to data compiled by Bloomberg. Its profit plunged 89 percent and 54 percent those years, respectively, as the company that derives more than 90 percent 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 716 million dirhams ($195 million), beating analysts’ estimates. Recurring income from hotels and malls grew to 41 percent of revenue last year compared with 24 percent 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 percent this year compared with a 21 percent 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.
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