After Emaar chairman Mohammad Al Abbar announced a palty 20 fils (down from 40fils last year) stock dividend, angry shareholders refused several times to vote for the payout. Many investors who had bought Emaar shares on margin (borrowing money to buy the stock in the hope of the share price appreciating) were desperate for cash to offset their losses.
Big barney at Emaar AGM
Al Abbar said the company thinks it is more important to invest in the long-term future of the company.
"I criticise most of the companies in other Arab countries, because they only work for today," he said, adding that Emaar needs to have adequate capital to seize opportunities in countries such as India.
In other words, quite possibly money is running short and the prospect of profits in Dubai is deteriorating and forcing the company to focus elsewhere.
No 'working for today' for Emaar of course. They allow at least a couple of weeks for residents to make important decisions like purchasing the property they're living in!!!
The markets don't seem happy judging by the Emaar share price which dropped more than 5%. Emaar stock in the last two years has proven itself a spectacularly successful way to lose 75% of your investment. Hopefully its property offerings won't fair so badly.
Meanwhile in the US, the traditional leader of the global economic cycle, the property market is being rocked further by the implosion of the sub-prime lending market.
US stocks fall heavily again on mortgage lender fears
With many Dubai mortgage lenders now offering 97% mortgages, and a huge supply of property likely to hit the market this year, the chance of similar conditions to the US emerging here seems all too likely.