Dubai Investments’s shares rose early on Wednesday, minutes after the company clarified news published by Al Bayan on the company’s dividend.
“The rally in the company’s shares is mainly due to the statement released to Dubai’s exchange earlier in the day,” Issam Kassabieh, senior financial analyst at Menacorp Financial Services, told Zawya during a telephone interview.
Dubai Investments confirmed to the exchange on Wednesday that its chief executive officer Khalid Bin Kalban, told Arabic daily newspaper Al Bayan in an interview that the company’s dividend for 2018 will be‘close to the 2017 dividend. For 2017, the company distributed a 12 percent cash dividend.
“In case the dividend for 2018 is close to the one for 2017, this would implicate a healthy dividend yield of more than 9 percent,” Kassabieh added.
“Aside from that, another reason behind today’s rally is that the stock is oversold, as the company’s preliminary fourth quarter earnings triggered selling in the stock,” Kassabieh said.
Dubai Investments recorded a net loss of 72.9 million UAE dirhams ($19.8 million) for Q4 2018, compared to a net profit of 171.3 million UAE dirhams for Q4 2017. (Read more here).
“We expect a positive change in valuation of existing investments in 2019 that explains the rally,” Kassabieh said.
The company’s shares were the most heavily traded on the DFM in terms of volumes. Early in the session, Dubai Investments' stock rose in early trading but closed flat for the day, and have gained 2.38 percent so far this year.
(Reporting by Gerard Aoun; Editing by Michael Fahy)
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