Sunday, Dec 23, 2012
The winners:
Tabreed: Since the global financial crisis, Tabreed had tough liquidity issues to resolve and was struggling to survive, according to Tariq Qaqish, head of asset management at Al Mal capital
“With the help of Mubadala, the Abu Dhabi investment arm, stepping-in and restructuring its debt, the company managed to bring down its debt to equity ratio to a reasonable level, which helped accordingly the management to focus on the day-to-day business.
“We expect, with the revival of real estate sector in the UAE, the Company will be able to grow its top line,”
Tamweel: According to Saleem Khokhar, head of equities, Asset Management Group,National Bank of Abu Dhabi, the company performed well recovering from very low valuations caused by company specific concerns and issues that were gradually addressed. Support from Dubai Islamic Bank (DIB) added to confidence in the stock.
Qaqish added that since the start of the turbulences in the Arab region, Dubai real estate showed strong rebound as the country present a safe haven of the region. “With that being said, we believe Tamweel will continue to benefit from Dubai’s economic recovery and will utilize the strong DIB ratings to stretch its lending portfolio.
Arabtec: The stock benefited from stake building by Aabar and support from Abu Dhabi government projects, improving prospects for it, said Khokhar.
Emaar Properties, Sorouh Real Estate and Aldar Properties: All three real estate companies performed well as UAE benefited from regional unrest and merger and aquisition activity, said Khokhar. Their performance is expected to continue in 2013, he added.
First Gulf Bank: The strong performance can be attributed to strong fundamentals and good dividend yield as well as focus on value creation for shareholders, believes Khokhar.
Air Arabia: The company continued to be one of the most successful players in the low fares airline worldwide. The reasons are not difficult to fathom.
“It managed to maintain highest load factor of 82% in a very competitive environment,” said Qaqish. “Not only that, they managed to successfully hedge 50% of their oil exposure, which helped the bottom line. The stock is trading at 9x 2013 Price to Earnings Ratio and 0.60x Price to Book Value. With above estimates results during 2012, we believe analysts will be looking to revisit their recommendation to reflect Air Arabia strong results.”
The losers:
Depa: According to Khokhar, the company had suffered from low liquidity and specific issues relating to contracts and cash flow. However, the recent purchase of a stake by Arabtec bodes well for the company.
Dana Gas: The sukuk payment in October 2012 was the main overhang on the stock and explains its performance, according to Samer Darwiche, associate at Gulfmena Investments. “The company’s continuous problems regarding receivables collections made Dana unable to fulfill its principal payment obligations. The lack of clarity regarding any solution did also affect the stock. Over the past month, the stock has been performing positively after the restructuring plan for the sukuk was announced.” The stock return moved from negative to positive territory.
By Gaurav Ghose Financial Features Editor
Gulf News 2012. All rights reserved.
