Emirates NBD and ADCB are 'value plays'



Now is the prime time for summer sales and investors may be able to pick up shares in a couple of UAE banks at a steep discount. Emirates NBD, the country's largest lender by assets, and Abu Dhabi Commercial Bank (ADCB) are the "preferred value plays" for the investment bank Rasmala. Rasmala yesterday initiated coverage on the UAE banking sector, describing the two banks as "undervalued" because the shares already reflect the risk associated with Dubai debt.

"Although we are concerned about the impact of the Dubai economy on the balance sheet of both banks, we believe the current valuations take this into account," Rasmala said in a research report. The company estimated Emirates NBD and ADCB are trading at a 33 per cent and 37 per cent discount to sector averages, respectively. It placed a "buy" on Emirates NBD stocks with a price target of Dh3.26. The share closed at Dh2.50 yesterday.

It also considers ADCB a "buy", with a target of Dh1.81. ADCB closed at Dh1.60. The Abu Dhabi bank, the third largest in the capital, has already had a steady rise this year. It is up more than 20 per cent from its 52-week low in January and has increased more than 5 per cent this month. But Emirates NBD is not much higher than its February low of Dh2.35 and has declined more than 46 per cent from its 12-month high last November.

Rasmala sees all UAE banks as cheap, both on a price-to-earning and price-to-book basis. "We believe that these numbers reflect an unjustified expectation of failure for the Dubai business model," Rasmala analysts said. "In any other situation the UAE banks represent the best value in the region." But the asset quality of UAE lenders is a legitimate point of concern for the analysts because of the huge growth in loans and advances, sums that remain on the banks' balance sheets.

skhan@thenational.ae

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Manchester United's summer dealings

In

Victor Lindelof (Benfica) £30.7 million

Romelu Lukaku (Everton)  £75 million

Nemanja Matic (Chelsea)  £40 million

 

Out

Zlatan Ibrahimovic Released

Wayne Rooney (Everton) Free transfer

Adnan Januzaj (Real Sociedad) £9.8 million

 

 

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1. Energy price shock

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Source: World Economic Foundation

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Ten10 Cricket League

Venue and schedule Sharjah Cricket Stadium, December 14 to 17

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Maratha Arabians Leading player: Virender Sehwag; Top picks: Mohammed Amir, Imad Wasim; UAE players: Shaiman Anwar, Zahoor Khan

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Pakhtoons Leading player: Shahid Afridi; Top picks: Fakhar Zaman, Tamim Iqbal; UAE players: Amjad Javed, Saqlain Haider

Punjabi Legends Leading player: Shoaib Malik; Top picks: Hasan Ali, Chris Jordan; UAE players: Ghulam Shabber, Shareef Asadullah

Team Sri Lanka Cricket Will be made up of Colombo players who won island’s domestic limited-overs competition

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Current staff: eight to 10

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Some popular drinks with high levels of sugar and caffeine have slipped through the fizz drink tax loophole, as they are not carbonated or classed as an energy drink.

Arizona Iced Tea with lemon is one of those beverages, with one 240 millilitre serving offering up 23 grams of sugar - about six teaspoons.

A 680ml can of Arizona Iced Tea costs just Dh6.

Most sports drinks sold in supermarkets were found to contain, on average, five teaspoons of sugar in a 500ml bottle.

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Name: HyperSpace
 
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Founders: Alexander Heller, Rama Allen and Desi Gonzalez
 
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