DOHA: Blue chip Industries Qatar surged to a nine-year high yesterday as a surprise hike in dividends attracted buyers even though the firm’s fourth-quarter profit trailed estimates.
Industries Qatar boosted Doha’s measure, while other regional markets were mixed.
Shares in the metals and petrochemicals conglomerate jumped 7.4 percent to QR193.10, their highest since April 2005.
The firm’s board proposed a dividend of QR11 per share or 110 percent of its nominal value, up from QR8.5 in 2012. Qatar’s bourse is up 1.5 percent.
The industrial giant recorded a strong full year earnings of QR8bn for 2013, reflecting the group’s ability to generate strong profits during the difficult international market conditions. The group’s revenue reached QR5.8bn during the period, the company announced on Sunday.
The dividend hike comes despite a five percent drop in annual profit due to weak fertiliser prices.
“We see the company as well positioned to maintain a payout ratio greater than 80 percent in the medium-to-long-term driven by lower leverage and limited announced capex,” Ankit Gupta, assistant vice president of research at NBK Capital, said in a note.
NBK Capital’s fair value for the stock is QR162.5 and Gupta expects some increase in the fair value on 2013 dividends beat, and improved dividend outlook in the medium term. Dividends in the Gulf region have helped boost share prices more than positive earnings and in Industries Qatar’s case, even offset weak earnings.
Strong dividend and bonus share payouts by Saudi Arabian banks have also spurred investor confidence in recent weeks.
Reuters
