Dubai's du in focus; Asian dip to weigh

Telecoms operator proposes first cash dividend despite higher royalties
Dubai's du in focus; Asian dip to weigh
du proposed a dividend of 15 fils per share.
By Reuters
Tue 06 Mar 2012 10:29 AM

Dubai's telecom operator du will be in focus after proposing its first cash dividend and posting estimate-beating fourth-quarter earnings, while a dip in Asian shares on slowing growth in China may dampen sentiment.

Du's net profit before royalty payments rose 15.4 percent in the fourth-quarter to AED497.4m (US$135.4 million), beating analysts estimates of AED270.7m.

It proposed a dividend payment of 15 fils a share, its first payout to shareholders, the company said.

"The amount of royalty went up a lot and that's a big negative but I wouldn't put too much weight on that because their operational side is extremely strong," says Ibrahim Masood, senior investment officer at Mashreq bank.

"15 fils for dividend is a starting point. Their cash generation should improve significantly going forward and that for yield-oriented investors should make it an interesting counter to focus on."

Abu Dhabi's Aabar Investments, which scrapped a US$1.7bn deal to take a majority stake in Arabtec two years ago, has raised its holding in the Dubai builder to 5.28 percent.

Shares in the builder have risen 120 percent this year, amid talk an investor was trying to acquire a strategic stake in the firm. Arabtec said on Tuesday that Aabar bought the shares on the open market.

Elsewhere, Saudi Arabian Mining (Maaden) plans to add a new production line at its aluminium joint venture with US firm Alcoa to produce sheets used in the automotive and construction industries.

Saudi Electricity is looking for companies to build and operate a 1,700-megawatt independent power plant running on fuel oil, the state-controlled utility said on Monday.

In Kuwait, the government named three new commissioners to the Gulf Arab state's fledging Capital Markets Authority (CMA), ending a protracted dispute.

Asian shares and other growth-linked assets fell on Tuesday as slowing economies in China and Europe and tension over Iran dampened sentiment, prompting investors to take profits from recent rallies that had been driven by ample liquidity.

Front-month Brent crude was up 11 cents at US$123.91 a barrel at 0259 GMT on fears of supply disruption from Iran.

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