Du Surges to Highest Since 2008 on Dividend Chase: Dubai Mover
Du rallied to the highest level in more than four years as investors seek to take advantage of the United Arab Emirates phone operator’s bigger dividend payout.
Shares of the company formally known as Emirates Integrated Telecommunications Co. (DU) rose 3 percent to 4.85 dirhams, the strongest intraday level since October 2008, at 12:27 p.m. in Dubai. The stock was the second-most traded by value on the benchmark DFM General Index (DFMGI), which gained 0.9 percent.
Du is set to pay a 2012 cash dividend of 30 fils a share, double its payout a year earlier, to shareholders of record by March 31, according to data compiled by Bloomberg. U.A.E. phone companies are benefiting from a recovery in Dubai, whose economy probably expanded 5 percent in 2012, the fastest pace since 2007, according to government estimates. Du’s fourth-quarter net income more than doubled, beating estimates.
“Investors are chasing phone companies that have a strong track record in issuing sustainable dividends,” said Nabil Farhat, partner at Abu Dhabi-based Al Fajer Securities.
Du’s stock has rallied 39 percent this year after its market share increased to about 49 percent. That’s more than double the advance for the benchmark gauge in the same period, while shares of Abu Dhabi-based competitor Emirates Telecommunications Corp. (ETISALAT) added 14 percent.
Five analysts recommend investors buy Du shares, while five have a hold rating on the stock and one says sell, data compiled by Bloomberg show.
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