Al Jazeera Steel (AJSP) board of directors (BoD) has proposed to distribute cash dividend of OMR0.014/share for 1H2016 following its strongest ever quarterly net profit number in 2Q16. The proposed dividend implies OMR1.74mn in total cash dividends, a 5.6% non-annualised dividend yield and 65% payout (in line with our pay-out estimate of 65%). The EX date for the cash dividends will be Monday 22 August 2016.   We view the news positively as the announced interim DPS already beats FY15 DPS of OMR0.009 and our FY16 DPS estimate of OMR.012; however, the announced dividend pay-out of 65% was in line with our estimate and supports our view that the company’s strong balance sheet and limited capex due to surplus capacity would help maintain its strong dividend pay-out over the medium term. Even though we expect 2H16 earnings and dividend to be lower due to seasonality, the strong yield would support further improvement in stock prices, in our view. (Company disclosure, Sameer Kattiparambil, Tarek El Shawarby)   Jazeera Steel: OMR0.248 as of 27 July 2016, Rating: Neutral, FV: OMR0.200 per share, MCap: USD82mn, ATMI OM / AJTM.OM