Interesting to see that their estimates for 2009 P/E is 5.x for the good 4 banks, and 7.x for the two weak banks
I think the report is too conservative, because 1Q results provides much better annualised P/E than their estimate (assuming 2Q onwards will be the same like 1Q actual). For example, 1Q results of ENDB was Dhs 1240m or Dhs 5B annualised Vs 16B total market capitalisation. This is a P/E of 3.2
Thanks doublesam. Full report download (88 pages, pdf). Banks covered:
Abu Dhabi Commercial Bank (ADCB)
Dubai Islamic Bank (DIB)
Emirates NBD (ENBD) (EMIRATESNBD)
First Gulf Bank (FGB)
National Bank of Abu Dhabi (NBAD)
Union National Bank (UNB)
OP - Outperform
N - Neutral
UP - Underperform
Credit Suisse 11 May 2009:
The outlook...and the differences
In this report, we initiate coverage of the UAE banking sector. Contrary to prevailing fears, we believe public-sector finances in the UAE are in relatively good shape and that the government’s ability/willingness to help should prevent significant balance sheet deleveraging and very high NPL levels.
Sector themes.
(1) Strong public finances (twin surpluses and a low-levered federal government);
(2) all banks have property exposure with difficulty in judging walk-away defaults;
(3) the government should continue to support the sector;
(4) liquidity squeeze, owing to a reversal of foreign capital flow, is easing;
(5) balance-sheet optimisation should replace growth.
How do the banks differ?
We believe that banks need to be distinguished by
(a) their exposure to real estate and their overall asset quality;
(b) their funding structure;
(c) revenue resilience;
(d) gearing and capitalisation.
On this basis, we like Union National Bank (Outperform, TP AED4.00) and First Gulf Bank (Outperform, TP AED13.83) for their superior asset quality, adequate capitalisation, marginally stretched balance sheets, and attractive valuations. Our least favoured stock is DIB given its highest exposure to real estate and risk of under-capitalisation. We would avoid NBAD on relatively rich valuation, and rate ENBD and ADCB Neutral.
Figure 1: Summary ratings (4 May 2009 close)
Code:
UNB FGB ADCB ENBD DIB NBAD
Ratings OP OP N N UP UP
[V] [V] [V] [V] [V] [V]
Hello rainbow and welcome to the pot-of-gold Dubai stock forums .
Good to see you're still around DQ .
What operating system, browser, version you using? Do you get an error message? Someone else had a problem with one of the other downloads, I can't remember what the solution was. _________________ UAE IPO list | posting guidelines
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