Dividend news cheers Qataris

January 06, 2014 - 2:54:38 am

DOHA: State-backed Mesaieed Petrochemical Holding Company’s decision to pay four months’ extra cash dividend to successful subscribers to its IPO just two to three months after share allotment is aimed at encouraging people to retain the allotted scrip over the long-term, banking industry sources say.

The government’s dividend payout announcement was quite timely and is likely to ensure that many Qataris apply for the primary issue and offloading of shares is minimal on listing, a banking industry insider said. 

“The shareholders would now wait for the cash dividend to come by so we expect that many wouldn’t exit after the company’s shares are listed on Qatar Exchange,” a source said.

Qataris yesterday welcomed the state’s announcement to pay cash dividend to the successful subscribers to the issue for the last four months of 2013 sometime in March/April this year.

Finance Minister H E Ali Sherif Al Emadi said at a news conference on Saturday that Mesaieed Petrochemical Holding Company (MPHC) will be paying out dividend to the successful subscribers (who would become its shareholders after listing) since the time the company was set up (in September 2013).

“Legally, the shareholders should not be entitled to cash dividend for any period in 2013 since the IPO opened only on December 31, but it is the Emir’s directive to do so,” the Minister said.

He hinted that the Initial Public Offering was priced so low since it was only meant for the common Qatari; it would cost the MPHC a whopping QR4bn as its capital stands reduced from QR16bn to QR12bn.

He also said parents and legal guardians of Qataris, who are below 18 years, would not be allowed to sell the shares allotted to the minors before they attain majority. 

The aim of the IPO is to help promote the culture of savings in the Qatari community by letting the successful subscribers experience the benefit of long-term capital gains and regular dividend income, said the minister. 

Some 35,000 Qataris are believed to have applied for the IPO so far.The Peninsula