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UAE plan set to boost undervalued real estate, bank shares

Dubai index has shed 8 per cent of its value compared to 10 per cent gains on the Tadawul index

Gulf News

Dubai:

Shares of real estate, banks and companies dependent on consumer spending will benefit from the 100 per cent foreign ownership and visa measures announced by the UAE government, market experts said.

As an initial reaction, shares of Emaar Properties and Damac Properties jumped along with Etisalat on Monday. Emaar Properties shares closed 2.92 per cent higher to Dh5.29, while Damac Properties closed 4.8 per cent higher to Dh2.39. Etisalat shares in Abu Dhabi closed up 0.94 per cent to Dh16.05.

“We expect banks, real estate, etisalat to benefit from the higher population. More population would mean widespread positive reaction from companies that may benefit from higher population,”

Mohammad Ali Yasin, chief executive officer at First Abu Dhabi Bank Securities said.

In stock specific targets, DFM shares are poised for continuous rally till Thursday. The next target is placed at Dh1.18/1.25. FABS had a technical buy at Dh0.99, Shiv Prakash, senior analyst with FABS said.

The overall trend is turning up in Emaar and the stock may see potential moves to Dh6.10 in the medium term, Prakash said.

Other factors will also stand to benefit from these measures.

“UAE banks are also expected to benefit as these new rules will encourage more investment. From a broader perspective, it is positive across the UAE economy and sectors such as Telecoms, Logistics (DP World, Aramex) and Consumer (Emaar Malls, Agthia) should also see some positive impacts,” Charles-Henry Monchau, Managing Director — chief investment officer and Head of Investment Management at Al Mal Capital said.

Long run:

“In the long run we would get fair valuation, and which may result in upmove in indices,” Yasin said. Dubai index has been the worst performer in the region along with its emerging market peers. Dubai index has shed 8 per cent of its value compared to 10 per cent gains on the Tadauwl index. The MSCI emerging market index has gained 14 per cent in the past one year.

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