Mubasher expects Gulf stocks to rebound

The recent sell-off in Mena equity markets means valuation levels are not stretched, giving way for more sensible entry points, said Amr Hussein Elalfy, the managing director and global head of research at Mubasher Financial Services.

Mubasher Financial Services says the recent equity turmoil in Arabian Gulf markets caused by plummeting oil prices has offered attractive valuations.

“The abrupt and severe sell-off in oil markets has added to rising volatility in equity markets in our part of the world, but at the same time it has offered a silver lining,” said Amr Hussein Elalfy, the managing director and global head of research at Mubasher Financial Services.

“On the one hand, lower oil prices should help boost global economic growth in 2015. On the other hand, the recent sell-off in Mena equity markets means valuation levels are not stretched, giving way for more sensible entry points.”

The Dubai Financial Market General Index is trading at 11.8 times earnings above its five-year average of 10.8 times earnings, according to the research division at Mubasher, ranked the third-biggest stockbrokerage trading UAE equities in December.

The Abu Dhabi Securities Exchange General Index is trading at 11 times earnings, above its five-year average of 10.5 times. Saudi Arabia’s Tadawul All-Share Index is trading at 12.8 times earnings, below its five-year average of 13.5 times.

Qatar, however, is trading at 12.8 times, above its five year average of 11.8 times. The research division initiated “buy” ratings on Etisalat, Air Arabia, Dana Gas and shares of the Dubai Financial Market Company. Arabtec was rated “hold”.

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