UAE stocks’ PE ratios are most attractive in Middle East
The UAE stock markets are the most attractive across the GCC states and the Middle East region in its entirety, boasting a P/E ratio of 14.00 over the past 12 months, ending in March, 2017. P.E ratio, in addition to the double book value, is one of the widely used and common stock valuation tool. It is a ratio of a company’s current market share price compared to its annual earnings per share. It generally reveals the sentiment of the investors. If the ratio is high, then it means that investors are optimistic and are expecting higher earnings growth in the future and if P/E multiple is lower, then vice-versa.
As per the latest statistics, the P/E ratio of Saudi stock markets was 17.7 over the same period, while it was 15.00 in Kuwait and 14.8 in Qatar.
UAE real state P/E ratio is the most attractive for investors, standing at 10.00 by the end of March, with the transportation and logistics having it at 10.3 Banking P/E ratio stood at 12.00, the industrial sector at 12.3, the healthcare and medical industries at 13.3 and 13.4 at the hospitality and leisure sector. The service sector had the highest P/E ratio for the past 12 months ending in March, at 21.00, while the telecommunications sector amounted to 17.2, followed by the credit and investment sector at 16.3 then the insurance sector with 15.00.
Emirates NBD had a P/E ratio of 6.9 while Mashreq Bank and the National Bank of Sharjah stood at 7.37 both. The newly merged banking entity, First Abu Dhabi Bank, had a P/E ratio of 11.8.
At the real state sector level, DAMAC Properties' P/E Ratio was the most attractive at 4.7, while ADX-listed Aldar Properties had a ratio of 6.4, and Emaar Properties at 10.2 , according to official statistics.
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