Emaar Properties shares climbed to the highest in almost three months after chairman Mohamed Alabbar was re-elected at a shareholders meeting, ending months of speculation the company’s founder may shift roles.
The developer of Burj Khalifa in Dubai, the world’s tallest tower, rose 5 percent at 10.54am. to Dh7.82, the highest since Januaru 19. Emaar was the biggest gainer on Dubai’s DFM General Index, which increased to 4,026.26, the strongest level in more than four months.
The chairman was re-elected by shareholders at the meeting yesterday, who also approved the reduction of the board to 10 members from 11 and voted to allow Emaar board members to continue their involvement in other real estate companies. The UAE’s largest developer will pay Dh1.07bn in dividends for 2014 after shareholders approved a payout of 15 fils a share.
“Investors are relieved there are no changes at the top management and an expected push back from shareholders didn’t materialize,” Taher Safieddine, an analyst at Shuaa Capital in Dubai, said by phone. “Emaar’s business model is still looking healthy and valuations remain attractive at these levels.”
Emaar’s share price slumped about 25 per cent in the last six months amid falling oil prices and speculation that Mr Alabbar may scale back his role with the company. The chairman has been increasingly involved with new developers in Abu Dhabi, Dubai and Egypt, drawing criticism over possible conflicts of interest. There’s also been disapproval from some shareholders after Alabbar moved Emaar executives to Abu Dhabi developer Eagle Hills, where he is a board member.
Alabbar rejected criticism over possible conflicts of interest in an April 9 interview with Arabian Business. He said the departure of senior Emaar executives to other companies in which he’s involved doesn’t represent a “brain drain” for the developer. He reiterated at the meeting a profit forecast of Dh3.69bn for 2015. Net income for 2014 was Dh3.3bn, the company reported in February.
“This profit is doable based on the delivery of homes and land sales, which the company never guides the market on,” said Sanyalak Manibhandu, an Abu Dhabi-based analyst at NBAD Securities. The company is expecting to deliver 2,120 homes this year compared with 1,480 homes completed in 2014, according to an investor presentation on its website.
Dubai’s government owns almost 30 per cent of Emaar, which was founded by Mr Alabbar in 1997. Under his leadership, the company expanded into more than 18 countries including the US, Egypt, Turkey and India.
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