Telefónica raises dividend by 15%

Telefónica has brushed aside the credit crunch, announcing a 15% increase in its dividend for this year, the Financial Times reports.

The company said it would pay out €1.15 a share, with the first tranche in the second half of the year, which exceeded analysts' expectations and is surely designed to quell fears about its falling demand at home and in Latin America, as well as possible regulatory pressures in Spain and Brazil.

The decision came after the board was presented with earnings projections for 2009 at its monthly meeting. It will be the sixth consecutive annual increase since 2003, when Telefónica reinstated its dividend policy the FT says.

Telefonica's shares have fallen about 10% this year, but gained 1.82% immediately after the announcement yesterday to close at €14.58 in Madrid.