Where does the UAE bourse go from here? Will it follow the Saudi bourse into a decline from peak levels, or like Kuwait quickly dust off any setback and plough ahead?
Remarks published this week from UAE Undersecretary at the Minister of Commerce Mohammed Al Muzakka point to the second outlook. He noted that UAE public joint stock companies would grow their profits by more than 30% this year.
Now in the year-to-date UAE stocks are up by 28.3% so that leaves room for them to rise just to catch up with profits. But the outlook for further profit rises is certainly not yet in stock prices, so there is room for a much better performance.
UAE stocks are on a 17.5 price/earnings ration which is way below the peak of 30 reached in 1998.
Moreover, as Mr Al Muzakka also noted 'the economic cycle is showing an unprecedented upward wave…due to increased oil revenues and most importantly excellent planned projects in the public and private sectors.'
Thus it is hard to disagree with the conclusion of Emirates Financial Services General Manager Suresh Kumar who tipped the EEF for further rises and advised existing shareholders to put more money into the market.
Emirates Equity Fund posts 4% dividend
This week the Emirates Equity Fund posted a 4% dividend which was added as additional units to the accounts of investors. Over the past three months the EEF, the largest UAE mutual fund has delivered a return of around 6.5%, not bad at a time when the local market seems to have reached a plateau.
United Arab Emirates: Thursday, November 06 - 2003 at 14:13
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Peter J. CooperThursday, November 06 - 2003 at 14:13 UAE local time (GMT+4)
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This Article was updated on Wednesday, March 28 - 2007
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