MARKET TALK: NBK Cap ups Arabtec Fair Value to AED1.98, But Recommends Sell

Thursday, Jun 28, 2012

0847 GMT [Zawya Dow Jones]--NBK Capital has raised its fair value for Arabtec to AED1.98 a share from AED1.75 but maintains "sell" recommendation on the stock, after Wednesday's confirmation that the TAV-CCC-Arabtec consortium has won a AED10.8B terminal expansion contract from Abu Dhabi Airports Co. Says, while more work will be needed on new Abu Dhabi airport, and the consortium will be well placed to capture some of this, the scope of further work is unlikely to be as wide as the current contract. "We are thus treating this contract as a one-off, and are raising our Fair Value (mainly based on DCF) to AED1.98 per share." Adds that even if it treated the contract as a sign of a permanent change of size for Arabtec, "our Fair Value would rise to AED2.20, still well short of the company's current share price." Says that while the airport contract is undeniably a major piece of good news for the company, is not enough to justify the share's still stretched valuation. Arabtec shares are Thursday trading -0.4% at AED2.81.

(tahani.karrar@dowjones.com; Twitter: @ZDJnews)

(END) Dow Jones Newswires

28-06-12 0848GMT