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Wed 3 Mar 2010 11:23 AM

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Aramex seeks 10% bonus share payout

Dubai-listed logistics firm's stock reacts negatively to the news in early trade on Wednesday.

Logistics firm Aramex said its board had recommended a distribution of 10 percent bonus share for 2009, according to a statement on the bourse website on Wednesday.The company's stock reacted to the news and fell 2.3 percent in early trade (10.15 am UAE time).

"Cash is king," says Ayman El Saheb, Darahem Financial Brokerage director of operations.. "People tend to prefer cash dividends, because unlike bonus shares they don't have aa negative impact on the stock after the dividend date. With bonus shares, the price is adjusted."

The Dubai-listed firm, which competes with global giants such as Fedex and DHL and posted a better-than-expected 28 percent rise in fourth-quarter profit.

The net profit rose to 49.5 million dirhams ($13.5 million), beating the most optimistic forecasts by analysts in a Reuters survey earlier in January.

"The fourth quarter was the first quarter in 2009 to witness positive revenue growth, marking a bottoming out of the preceding revenue decline," Aramex said in a statement in January.

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