Cadiz Holdings Ltd., the owner of a stock broker and money manager, jumped the most in 3 1/2 years after announcing a special dividend following the sale of 60 percent of its securities business to BNP Paribas SA.
Shares rose 15 percent, the most since October 2008, to close at 2.77 rand in Johannesburg trading, the highest since last September.
The special pay-out of 50 cents a share will lift Cadiz’ dividend yield to 17.9 percent, compared with an estimated 3.43 percent yield for Johannesburg’s FTSE/JSE All Share Index, according to data compiled by Bloomberg. Cadiz said it undertook a “prudent review” of its capital requirements following the 150 million rand ($19.5 million) transaction, announced on Aug. 4.
“It’s a very attractive dividend and just from a yield perspective it’s probably a good play at this time,” Deryck Janse van Rensburg, a Johannesburg-South Africa Miners based portfolio manager at BOE Stockbrokers, said by phone. “You might be finding a few div strippers coming in to take advantage of that yield.”
Cadiz won’t pay a final dividend for the 2012 financial year after the special pay-out, it said in a statement today. The BNP Paribas transaction will also boost earnings per share for the year through March by more than 20 percent. Earnings per share adjusted for one-time items will be “substantially lower than last year and the group expects to break even for the year,” it said.
“Difficult market conditions” led to a drop in performance fees and lower average assets under management relative to last year at its asset management business, the company said in the statement. The securities business was affected by low trading volumes and increased competition.