Dubai developer proposes a stock dividend, disappointing investors
Shares in Damac plunged by almost 10% on Monday morning, as the Dubai developer proposed a stock, rather than cash, dividend for 2014.
Its share price stood at Dh2.79 at 11.25am local time, marking a 9.71% decline in the wake of the dividend announcement made to the Dubai Financial Market, where the stock is listed. The maximum share drop limit on the exchange is 10%.
Damac proposed a share dividend of 10 fils per share, equivalent to 500 million bonus shares. Hussain Sajwani, chairman of Damac, said the company had posted “strong results for 2014”.
Yet investors reacted badly to the dividend announcement, following weeks of share-price gains on the expectation of a cash dividend.
Damac last week reported revenues of $2 billion for 2014, a 64% rise on the previous year, driven by its flagship Akoya developments.
Its fourth-quarter net profit rose by 11%, according to Reuters calculations, while annual net profit stood at $937 million, up 46% from the year before.