Morgan Stanley bullish on Commercial Bank of Qatar

In the report "The Commercial Bank of Qatar: Attractive Entry into GCC", Tammam El Barbir, Morgan Stanley Banking Analyst for the MENA region, feels that CBQ represents good value for investors looking for exposure to the high growth GCC Banking sector.

El Barbir says:

"We regard CBQ as a play not just on Qatar's economic growth story but on that of the GCC, namely oil wealth, economic diversification, population growth, rising private wealth and banking consolidation."

Mr. El Barbir believes that CBQ shares are attractively valued as the market continues to underestimate the Bank's potential profit growth by ignoring its GCC exposure.

He says:

"CBQ has transformed itself into a pan-GCC bank alliance following its acquisition of a 34.85% stake in National Bank of Oman and a 40% stake in UAE-based United Arab Bank. The bank is attempting to build on this through strong organic growth while focusing on high-yielding corporate and affluent retail segments, and by building a "Confederated" banking model - taking significant stakes in local GCC banks and having board representation and management agreements in place."

"We think the market is ignoring CBQ's transformation into a pan-GCC bank and the ensuing growth potential and earnings stability, believing instead that the bank will only benefit from Qatar's robust economic environment," he added.

CBQ recently became the first Qatari bank to be listed on the LSE after it successfully raised $700m in a global depositary receipt (GDR) listing on the LSE, the largest GDR to date.

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For the full report, please see Tammam El Barbir's "The Commercial Bank of Qatar: Attractive Entry into GCC".