Emaar Shares Decline to Lowest in Month on Dividend Plans

Emaar Properties PJSC fell to its lowest in more than a month as the United Arab Emirates largest real estate developer proposed a dividend that disappointed investors.

The shares closed down 3 percent at 7.13 dirhams, the lowest since Feb. 2, after earlier dropping as much as 3.8 percent. The company was the biggest decliner on Dubai’s DFM General Index, which closed unchanged. Emaar’s board proposed paying 15 fils a share for 2014, it said in a statement Thursday. That compares with a 2013 dividend of 15 fils plus one bonus share for every 10 held.

“The market was expecting 20 fils a share and I’m sure investors will try to push for that” at the company’s annual general meeting on April 15, Mohammed Ali Yasin, managing director of NBAD Securities LLC in Abu Dhabi, said by phone. “The board should guide shareholders on the percentage of profit they plan to distribute to avoid this type of disappointment.”

Emaar’s dividend distribution is very close to what banks plan to give out, Yasin said. The developer is distributing 33 percent of its net income for the year, while Emirates NBD PJSC said it will distribute around 38 percent of its 2014 profit, he said.

Emaar’s full-year profit jumped 28 percent to 3.3 billion dirhams ($898 million) as revenue from hotels and malls increased, the company said on Feb. 15.

(Adds closing price in second paragraph.)
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