Higher special dividend for Emaar shareholders?

Dubai:

Analysts are not ruling out the possibility of a higher dividend for shareholders of Emaar Properties even as the company trimmed the size of the IPO of its development unit to 20 per cent from the earlier 30 per cent, assuming that would mean lower dividend.

Farid Samji, Head of Asset Management at Daman Investments believes investors are taking a pessimistic, myopic view of Emaar Properties.

“If investors were to rejog their memories, a scenario of the special dividend being higher than the proceeds from Emaar Development IPO could well be on the cards,” Samji said.

He expects the Emaar Malls IPO scenario of 2014 may play out again. In 2014, Emaar paid a special dividend of around Dh9 billion, when the Emaar Malls IPO proceeds were at Dh5.3 billion.

“There could be a higher special dividend this time too from the proceeds of Emaar Development IPO.” And it could be funded by a combination of debt (pre-IPO on Emaar Dev.) and the IPO proceeds.” he added.

Ankit Gupta from Shuaa agreed. “Our base case is a special dividend of Dh5 billion — which equates to a 8.3 per cent yield for Emaar Properties’ shareholders and we remain buyers of the name,” the vice-president at Shuaa Capital said.