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Du to be best GCC performer by year-end

UAE telecoms provider du is expected to nearly quadruple its net income this year to emerge as the top performing Gulf company, according to financial research of more than 50 listed firms.

Most sectors will likely record lower combined earnings but real estate and petrochemicals are expected to be the main victims, said the research conducted by NCB Capital, an investment fund affiliated to Saudi National Commercial Bank.

The research covered 54 companies listed on the GCC stock markets and was based on forecasts by NCB Capital, stock brokers and other sources. The fund said the previous forecast covered more than 100 companies and blamed the global financial crisis for the sharp decline in its coverage.

Its projections showed du would be the best performer among more than 500 companies listed on the seven bourses in the Gulf Co-operation Council (GCC).

Saudi Arabia's Savola Group was projected to be the second best performer, followed by the UAE's Union Properties . According to the survey, the net profits of du could rocket by 400 per cent this year while those by Savola and Union Properties were forecast to soar by around 299 and 214 per cent respectively.

Two other UAE-listed company, Emaar and Commercial Bank of Dubai , were among the best performing GCC companies in 2009, with a projected growth of nearly 97 and 50 per cent in their net earnings.

However, the survey noted that the global financial crisis had adversely affected the research's coverage in the region compared with the last quarter, when 118 companies were covered.

It said the broker coverage suffered further due to the delay in the announcement of fourth quarter results of 2008 by many companies in the region, which has also led to suspension of trading in 30 firms on the Kuwaiti bourse.

"Overall, this decline in the number of companies for which estimates are available has reduced the coverage depth substantially in certain regions such as Kuwait and Bahrain, limiting the ability of aggregate regional statistics to provide adequate representation of the respective markets," it said.

Other stars include the Qatar Gas Transport , Burqan Bank , Kuwait Finance House , Ahli United Bank , Bank Al Jazira , BBK of Kuwait, Bank Muscat , Oman Cement and Saudi Electricity .

On the other hand, the Saudi American Bank (Samba) topped a list of 15 companies which are projected to have the slowest profit growth in 2009. Others included Arabtec , Union National Bank , National Bank of Abu Dhabi , National Bank of Kuwait and Qatar National Bank .

The report presented a pessimistic outlook for the general performance of sectors, most of which are projected to record slowdown in profitability.

It showed petrochemicals will be the worst hit sector, with an expected decline of 75 per cent. It will be followed by the real estate and construction sector, with a profit drop of around 33 per cent. The decline was estimated at 18 per cent in the financial sector, 10 per cent in building materials, two per cent in consumer goods and services and two per cent each in the telecommunications and transport and logistics sectors.

© Emirates Business 24/7 2009