The generosity of First Gulf Bank (FGB) to shareholders has clearly piqued the market's interest in the stock.
FGB's payout - Dh1.5 billion to shareholders, plus a free share for every one held - was bigger than any other bank in the industry this year. And analysts from JPMorgan believe that similarly generous payouts could follow in the years ahead.
"We believe that in the next 1-2 years, FGB management will continue to maintain a high focus on enhancing future return on equity via distribution of a higher dividend payout," analysts from the bank wrote in a research note.
FGB has been the best-performing stock in the industry this year, rising 34.9 per cent since the start of the year. It is easy to be sceptical of the run-up that some stocks have experienced lately, a fact not lost on investors as FGB shares fell 1.1 per cent yesterday, underperforming the wider Abu Dhabi Securities Exchange General Index.
But analysts from Morgan Stanley said FGB's recent rise could also have further to travel.
The increased dividend payout "confirms our view that FGB management remains focused on addressing [the] bank's overcapitalisation and potential capital return to shareholders", analysts from the investment bank wrote in a research note.
Morgan Stanley says that at current valuations, FGB's share price factors in a 40 per cent dividend payout. But the bank could easily afford a 50 per cent payout, analysts from the bank said.
"In theory, based on its current Tier I base, FGB could afford 100 per cent payout on earnings and 15 per cent risk-weighted assets growth over the next five years and still hold a 9.2 per cent Tier I ratio, which would remain above the Central Bank's minimum requirement of 8 per cent," the analysts wrote.
Still, investors might want to be wary of getting carried away. The Central Bank's recent capping of Dubai Islamic Bank's cash dividend at 10 per cent - which would have exceeded a 50 per cent limit on dividends imposed in 2010, which is thought to have lapsed - is worth focusing on.
FGB is in a much stronger capital position than Dubai Islamic Bank. But the lack of clarity from the Central Bank should remind investors not to get ahead of themselves.
ghunter@thenational.ae
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Test
Director: S Sashikanth
Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Other workplace saving schemes
- The UAE government announced a retirement savings plan for private and free zone sector employees in 2023.
- Dubai’s savings retirement scheme for foreign employees working in the emirate’s government and public sector came into effect in 2022.
- National Bonds unveiled a Golden Pension Scheme in 2022 to help private-sector foreign employees with their financial planning.
- In April 2021, Hayah Insurance unveiled a workplace savings plan to help UAE employees save for their retirement.
- Lunate, an Abu Dhabi-based investment manager, has launched a fund that will allow UAE private companies to offer employees investment returns on end-of-service benefits.
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
The BIO:
He became the first Emirati to climb Mount Everest in 2011, from the south section in Nepal
He ascended Mount Everest the next year from the more treacherous north Tibetan side
By 2015, he had completed the Explorers Grand Slam
Last year, he conquered K2, the world’s second-highest mountain located on the Pakistan-Chinese border
He carries dried camel meat, dried dates and a wheat mixture for the final summit push
His new goal is to climb 14 peaks that are more than 8,000 metres above sea level
Tonight's Chat on The National
Tonight's Chat is a series of online conversations on The National. The series features a diverse range of celebrities, politicians and business leaders from around the Arab world.
Tonight’s Chat host Ricardo Karam is a renowned author and broadcaster who has previously interviewed Bill Gates, Carlos Ghosn, Andre Agassi and the late Zaha Hadid, among others.
Intellectually curious and thought-provoking, Tonight’s Chat moves the conversation forward.
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Ferrari
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The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950