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Emirates NBD PJSC (EMIRATES) jumped the most in almost 21 months after the Islamic unit of the biggest United Arab Emirates lender forecast a doubling of 2013 profit and amid bets the bank will boost its full-year dividend.
The shares rallied 6.4 percent, the biggest advance since April 2011, to 3.31 dirhams at the close in Dubai. About 1.3 million shares were traded today, triple the three-month daily average, according to data compiled by Bloomberg. The stock was the biggest gainer on the benchmark DFM General Index (DFMGI), which added 0.4 percent.
Emirates Islamic Bank PJSC, wholly owned by Emirates NBD, will seek to boost net income to 150 million dirhams ($41 million) this year from about 80 million in 2012, Chief Executive Officer Jamal Bin Ghalaita said in a Jan. 14 interview. The bank said last month it would raise capital by 63 percent to 3.9 billion dirhams through a rights issue.
“The projected improvement in its Islamic banking operation” helped boost the Emirates NBD’s stock, said Nabil Farhat, a partner at Abu Dhabi-based Al Fajer Securities. Investors are also expecting a higher dividend payout for 2012, he added.
Banks in Dubai, still struggling with non-performing loans stemming from the 2008 real estate crash, are stepping up efforts to boost Islamic finance as the industry’s global assets are set to double by 2015. Emirates NBD, which offers services that comply with Islam’s ban on interest through the Dubai-based unit, is seeking to boost retail lending to 60 percent of the total from 40 percent now, Bin Ghalaita said.
Emirates NBD, which paid a cash dividend of 20 fils per share for 2011 profit, has a 12-month dividend yield of 6.1 percent. That compares with 3.1 percent for the Bloomberg GCC 200 Financial Index.
The lender’s fourth-quarter profit may more than double to 517 million dirhams when the bank reports the results later this month, according to the average estimate of six analysts on Bloomberg. Its shares fell 3.1 percent in 2012, lagging a gain of 20 percent for the Dubai benchmark index.
Two analysts recommend investors buy the shares of Emirates NBD, while five have a hold rating on the stock and one says to sell, data compiled by Bloomberg show.
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