1. The Federal National Council has just approved the creation of the Dubai International Financial Centre. The investment in this huge project will bring the financial services sector to the UAE, a massive gain for any economy. All local companies will benefit.
2. The UAE is sorting out the internal mechanisms of its archaic bourse, creating a single electronic trading platform, and is looking at the laws governing initial public offerings. A lot more IPOs are expected over the next two years.
3. The UAE bourse has not yet seen the massive price hikes enjoyed by Saudi Arabia and Kuwait this year. Its 32% gain is modest compared with 95% in Kuwait.
4. Expect to see a rotation out of Kuwaiti stocks into the UAE. This happened last week when Kuwaiti investors bought a 5.7% stake in the UAE's Emaar Properties for $102m.
5. The price/earnings ratio of 18 for the UAE is low by comparison with other GCC states and very low internationally. This simply does not reflect the profits outlook for the next few years in the UAE which is going through an oil and investment driven boom.
6. International stock markets are expected to start falling back later next year as interest rates rise. This should increase the relative attractiveness of UAE stocks to local investors.
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Six good reasons to buy UAE stocks
- United Arab Emirates: Saturday, December 20 - 2003 at 09:19
Think positive for the year ahead, especially if you have been considering an investment in the UAE bourse. Buy now while stocks last!
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Peter J. CooperSaturday, December 20 - 2003 at 09:19 UAE local time (GMT+4)
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This article was updated on Wed Mar 28 2007.
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