Dar al-Arkan Real Estate Development Company’s (DAAR’s) share price dropped 6.28 per cent, closing at SR8.95 ($2.39), on 20 May.

Earlier that day, the company announced it plans not to distribute a dividend over the 2012 fiscal year.

“This is to support the future growth of DAAR’s business,” a statement on the Saudi Stock Exchange (Tadawul) said.

On 20 May DAAR also met investors to discuss plans to sell dollar-denominated sukuk (Islamic bonds), mandating Bank al-Khair, Goldman Sachs, Deutsche Bank, Emirates NBD, Masraf al-Rayan and QInvest to manage the first tranche issuance. The funds will go towards the development of its projects and will be issued in several tranches over a 12-month period.

According to Reuters, the sukuk will be at least $500m in size and is likely to yield about 6.25 per cent.

In July, US ratings agency Standard & Poor’s revised DAAR’s credit rating outlook from stable to positive and affirmed it at B+. Last year, the company repaid its SR3.75bn ($1bn) sukuk on maturity.