Emaar hits 6 week high on surprise dividend payment
Investors in Dubai are demanding for dividends since 2008 and on attaining approval of cash dividends Emaar touches its six weeks high.
Emaar climbed 4.4%, trading 2.5% higher at 3.26 dirhams as of 11:32 a. m. in Dubai. Yesterday, investors approved a cash dividend of 10% for year 2010, for a total of about 600 million dirhams ($163 million).
Chairman of Emaar, builder of the world’s tallest tower in Dubai , Mohamed Alabbar said in the general assembly meeting to the shareholders that a payout may leave the company ill-prepared to face emergencies as investors are demanding as much as 30% in cash.
Before agreeing to the 10% payout, shareholders rejected Mohamed Alabbar’s proposal to pay a 500 m dirham cash dividend along with a 5% bonus share.
“It’s good for retail-investor sentiment, but I’m not sure it’s the wise thing to do,” said Fadi Al Said, a senior manager at ING Investment Management in Dubai, which oversees about $518 billion worldwide. “I prefer Emaar keeps its cash to help meet obligations rather than maybe going to the market later.”
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