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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HAEMOGLOBIN DISORDERS EXPLAINED
Thalassaemia is part of a family of genetic conditions affecting the blood known as haemoglobin disorders.
Haemoglobin is a substance in the red blood cells that carries oxygen and a lack of it triggers anemia, leaving patients very weak, short of breath and pale.
The most severe type of the condition is typically inherited when both parents are carriers. Those patients often require regular blood transfusions - about 450 of the UAE's 2,000 thalassaemia patients - though frequent transfusions can lead to too much iron in the body and heart and liver problems.
The condition mainly affects people of Mediterranean, South Asian, South-East Asian and Middle Eastern origin. Saudi Arabia recorded 45,892 cases of carriers between 2004 and 2014.
A World Health Organisation study estimated that globally there are at least 950,000 'new carrier couples' every year and annually there are 1.33 million at-risk pregnancies.
More coverage from the Future Forum
BEETLEJUICE BEETLEJUICE
Starring: Winona Ryder, Michael Keaton, Jenny Ortega
Director: Tim Burton
Rating: 3/5
David Haye record
Total fights: 32
Wins: 28
Wins by KO: 26
Losses: 4
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Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
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MATCH INFO
Rugby World Cup (all times UAE)
Final: England v South Africa, Saturday, 1pm
The biog
From: Upper Egypt
Age: 78
Family: a daughter in Egypt; a son in Dubai and his wife, Nabila
Favourite Abu Dhabi activity: walking near to Emirates Palace
Favourite building in Abu Dhabi: Emirates Palace
Forced%20Deportations
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Violence%20
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Various Artists
Habibi Funk: An Eclectic Selection Of Music From The Arab World (Habibi Funk)
Second ODI
England 322-7 (50 ovs)
India 236 (50 ovs)
England win by 86 runs
Next match: Tuesday, July 17, Headingley
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The Penguin
Starring: Colin Farrell, Cristin Milioti, Rhenzy Feliz
Creator: Lauren LeFranc
Rating: 4/5
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Essentials
The flights
Etihad and Emirates fly direct from the UAE to Delhi from about Dh950 return including taxes.
The hotels
Double rooms at Tijara Fort-Palace cost from 6,670 rupees (Dh377), including breakfast.
Doubles at Fort Bishangarh cost from 29,030 rupees (Dh1,641), including breakfast. Doubles at Narendra Bhawan cost from 15,360 rupees (Dh869). Doubles at Chanoud Garh cost from 19,840 rupees (Dh1,122), full board. Doubles at Fort Begu cost from 10,000 rupees (Dh565), including breakfast.
The tours
Amar Grover travelled with Wild Frontiers. A tailor-made, nine-day itinerary via New Delhi, with one night in Tijara and two nights in each of the remaining properties, including car/driver, costs from £1,445 (Dh6,968) per person.
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Our legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants
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Results
5.30pm: Maiden (TB) Dh82,500 (Dirt) 1,600m, Winner: Panadol, Mickael Barzalona (jockey), Salem bin Ghadayer (trainer)
6.05pm: Maiden (TB) Dh82,500 (Turf) 1,400m, Winner: Mayehaab, Adrie de Vries, Fawzi Nass
6.40pm: Handicap (TB) Dh85,000 (D) 1,600m, Winner: Monoski, Mickael Barzalona, Salem bin Ghadayer
7.15pm: Handicap (TB) Dh102,500 (T) 1,800m, Winner: Eastern World, Royston Ffrench, Charlie Appleby
7.50pm: Handicap (TB) Dh92,500 (D) 1,200m, Winner: Madkal, Adrie de Vries, Fawzi Nass
8.25pm: Handicap (TB) Dh92,500 (T) 1,200m, Winner: Taneen, Dane O’Neill, Musabah Al Muhairi
Bio
Born in Dibba, Sharjah in 1972.
He is the eldest among 11 brothers and sisters.
He was educated in Sharjah schools and is a graduate of UAE University in Al Ain.
He has written poetry for 30 years and has had work published in local newspapers.
He likes all kinds of adventure movies that relate to his work.
His dream is a safe and preserved environment for all humankind.
His favourite book is The Quran, and 'Maze of Innovation and Creativity', written by his brother.
Tu%20Jhoothi%20Main%20Makkaar%20
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Oscars in the UAE
The 90th Academy Awards will be aired in the UAE from 3.30am on Monday, March 5 on OSN, with the ceremony starting at 5am
The specs
Engine: 6.2-litre supercharged V8
Power: 712hp at 6,100rpm
Torque: 881Nm at 4,800rpm
Transmission: 8-speed auto
Fuel consumption: 19.6 l/100km
Price: Dh380,000
On sale: now
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Israel Palestine on Swedish TV 1958-1989
Director: Goran Hugo Olsson
Rating: 5/5