Emaar Properties witnessed continued selling pressure on Sunday to hit their lowest level in 52 weeks after the company’s statement lacked details on the annual dividend, weighing on the wider Dubai index.
Emaar Properties closed 2.72 per cent lower to Dh5.73, after hitting a low of Dh5.70, the lowest in the past one year.
Emaar Properties said last week that its board had approved submitting a proposal to the annual general meeting to distribute Dh1 billion, the remaining tranche of the special dividend promised by the company post of the initial public offering of Emaar Development.
The company had earlier distributed Dh3 billion in January, as its first tranche of special dividend. However, no details on the annual dividend were mentioned in the statement posted on the Dubai Financial Market’s website last week.
“There has been some communication problem which is leading to market questioning the action of the management with regards to dividend distribution,” Sanyalaksna Manibhandu, head of research, First Abu Dhabi Bank Securities said.
Emaar Properties has shed 32 per cent of its value from a high of more than Dh8.43 hit in September 2017 due to lower than expected special dividend and actions on annual dividend.
“People will wait until the Emaar AGM for any further action,” Manibhandu said. Price action was seen in Emaar Development, which has proposed to give dividend for the next three years. “People will prefer to get into Emaar Dev because they are seen as a dividend play and the company is more focused and it doesn’t have any execution risk for big projects,” Manibhandu said. Emaar Development plans to give Dh2 billion in dividends which will start in the second half of this year.
Due to the high weightage of Emaar Properties on the broader gauge, the Dubai index closed more than 1 per cent lower to 3,115.16.
In other stocks, Dubai Islamic Bank closed 2 per cent lower to Dh5.36. Gulf Finance House closed 0.72 per cent lower to Dh1.38. Naeem Holding for Investment, which was listed on the Dubai Financial Market, closed 0.84 per cent higher to Dh2.4. The Abu Dhabi Securities Exchange general index closed 0.82 per cent higher to 4,615.27. Dana Gas shares 8.33 per cent higher to Dh0.91 after the company announced 5 per cent cash dividend. Traded volumes in Dana Gas were placed at 84.06 million shares, the highest level since January.
In other markets, Saudi’s Tadawul was 0.02 per cent lower to 7,839.52.
Al Mal Capital expects MENA equities can return 10-15 per cent per annum in the medium term and given the sizeable alpha opportunities that can exploited in the region.
“We still target to deliver an average annualised outperformance of 10 percentage points over a 5 year period,” Al Mal Capital said in a note.