Emaar price much below book value

Emaar Properties enjoys the lowest market price/book value ratio among the shares listed on the UAE stock markets as of June end, 2002.

Emaar, which was traded at Dh24.75 as of June end, enjoys the lowest ratio of 0.30. The other listed shares with low ratios include, National Marine Dredging Co with ratio of 0.71 against a trading price of Dh630 as of June end. A lower ratio means that market price is much below the book value of the share, which reflects the real value of the share.

Oasis International Leasing Co, which has recently announced plans to open up to 49 per cent foreign investment, also enjoys a very low ratio, at 0.68. Oasis was traded at Dh7.40 as of June end. While Tabreed has a ratio of 0.86, Gulf Cement Co and Shuaa are at 0.73.

Interestingly, no listed company from the banking sector has a ratio below one which means, the market price is invariably more than the book value of the share. While Commercial Bank International enjoys the highest ratio among the banks at 3.03, First Gulf Bank has a ratio of 2.75 as of June end. The Islamic banks - National Bank of Sharjah, Dubai Islamic Bank and Abu Dhabi Islamic Bank have relatively lower ratios, at 1.49, 1.94 and 1.29 respectively.

While the average ratio for the banking sector is 1.81, that of insurance sector is 1.39. While the services sector ratio is 1.5, the average ratio for the shares listed on the UAE stock markets is 1.66. The recently listed Qatar Telecom (Q-Tel) enjoys the highest ratio at 5.45 pointing to a high market price, Etisalat enjoys a ratio of 3.53 against a trading price of Dh117.

It was the low market price, which has prompted the Emaar management to come out with a share-buy back scheme for its shares. However, though the share buyback is nearing its closure after having remained open for six months, the market price is still much below from the book value, which is said to be above Dh65.