Saturday, July 31, 2010
The Financial Side
Be it in Dubai or in Abu Dhabi, the United Arab Emirates (UAE) market is catching attention from all throughout the world. The following are some excerpts identifying how some financial activities result to changes in retained earnings and common stocks in the most recent periods.
One factor that can affect the retained earnings (RE) of an entity is through payment of dividends to share holders. As an example, the National Bank of Abu Dhabi (NBAD) has paid cash dividends amounting to Dh 659 million (NBAD First, 2008). Shuaa, another leading UAE company is doing the same thing, paying its shareholders 45% of their share’s nominal value. (Shuaa’s Capital, 2008) Another cause for the increased RE is the closing of annual and quarterly net incomes into RE. As for NBAD, the 2008 first quarter net income transferred to RE amounted to Dh 875 million, an excellent performance.
For the common stocks some changes can be caused by transferring convertible preferred stocks into common stocks. One of these transfers is from the National Bank of Abu Dhabi (NBAD) converting Dh 1.4 billion from its 2006 issuances of the convertible shares (NBAD First, 2008) Another very good case is that of Shuaa’s attributing the good increase from its strong market performance and very successful initial public offering (IPO). (Shuaa’s Capital, 2008) Lastly, the most common way to affect the common stocks is by issuance to the investing shareholders as well as stock splits and bonus stocks issuances..
Promising financial market performance shows how well UAE industries are doing. Better income means increased RE and a good dividend payout convinces more investors to be a company’s share holder. As for UAE, the banking sector is reported to be best in earnings and capital records, followed by the real estate sector. (Abu Dhabi, 2008)
Elewa, A.A. Abu Dhabi shares up 2.48% in a week, April 11, 2008, Gulf News, 11 April 2008. Accessed 19 May 2008 from <http://archive.gulfnews.com/articles/08/04/11/10204603.html>.
NBAD first-quarter profit jumps 45% to Dh875m. Gulf News, 28 April 2008. Accessed 19 May 2008 from <http://archive.gulfnews.com/articles/08/04/28/10209036.html>.
Shuaa Capital's net profit rises 53% to Dh400.5m. Gulf News, 17 May 2008. Accesed 19 May 2008 from < http://archive.gulfnews.com/business/Markets/10213933.html >