March 21 (Bloomberg) -- Dubai Investments PJSC led gains in Dubai’s benchmark stock index after the board recommended a cash dividend even after posting a 75 percent drop in full-year profit.
The shares surged 5.1 percent, the most since March 11, to 92 fils at the 2 p.m. close in Dubai. The stock led the DFM General Index 0.7 percent higher to 1,655.50. Dubai Investments, whose portfolio compromises more than 40 companies, recommended a 5-fil dividend for last year.
“No one expected them to give a dividend” after 2011 earnings tumbled, said Saad al Chalabi, an institutional trader at Al Ramz Securities in Abu Dhabi.
Dubai Investments was hurt by a drop in the sheikhdom’s real-estate market, which crashed on the heels of the 2008 global credit crisis and sent home prices plunging more than 60 percent from their peak that year. Cash on the companies balance sheet dropped 71 percent between 2008 and 2010 to 399 million dirhams ($109 million) and profit fell for a third year in 2011.
Dubai Investments paid a 6-fil dividend for 2010 and 2009, according to data compiled by Bloomberg.
To contact the reporter on this story: Zahra Hankir in Dubai at firstname.lastname@example.org
To contact the editor responsible for this story: Claudia Maedler at email@example.com