Saturday, October 21, 2006

UAE attractive equity investent destination in the middle east

The UAE is among the three most attractive equity investment destinations in the region alongside Kuwait and Egypt, meriting a rating of “overweight”, according to a report on the Middle East released yesterday.

“From the perspective of a regional investor with full market access, we suggest an overweight stance on Egypt, Kuwait and UAE; market weight on Bahrain and Oman; and underweight on Qatar and Saudi Arabia,” said the report by Switzerland-based Credit Suisse.

“The Gulf continues to appear valued in line with the mainstream MSCI [Morgan Stanley Capital International] emerging markets universe, with the latter currently trading on trailing PER [price to earnings ration] and PBR multiples of 13.8 and 2.3 times, respectively,” the report said.

Trailing PER is still the highest in Saudi Arabia at 22.7 times, followed by Qatar at 20.1 times.
The UAE comes in third with 15.8 times trailing earnings and the lowest multiples in the region are now in Bahrain at 11.4 times and Kuwait at 9.7 times, according to the report.

“We maintain our regional sector recommendations with an overweight stance on the banks and telecom sectors and our underweight stance on materials,” said Samer El Khatib and Nima Noorizadeh, the research analysts at Credit Suisse and authors of the report. A key catalyst for the development of the Middle East equity markets is the implementation of regulatory reform.
GCC countries have been adopting measures to implement structural reforms with the aim of further opening the region’s equity markets.

[Source - Emirates Today]

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