Revealed: the best and worst UAE property analysts

Arabian Business ranks the performance of analysts who cover UAE property-related stocks, based on their returns

It’s the toughest job in the Gulf, isn’t  it? Trying to predict the fortunes of the UAE real estate giants is no easy task, particularly in the face of a recession that has hit the industry hard. But there are some brave souls who make their living assessing the performance of these stocks. Many huge public companies hang on the every word of analysts, which can devastate or boost their share price in equal measure.

The group of analysts covering UAE stocks work for some of the biggest investment houses in the world, and have no qualms when it comes to rushing out buy or sell notes on companies.

But just how good are the analysts themselves? What would happen if you actually followed all their advice?

For the first time, Arabian Business has published a list of the performance of the eleven analysts that cover UAE stocks, based on data compiled by Bloomberg. We have examined the analysts who follow stocks classified as 'Real Estate & Construction' on the Dubai Financial Market, as well as real estate and construction related stocks on  Abu Dhabi Securities Exchange and Nasdaq Dubai. We have looked at all the companies the analysts follow (which also include stocks from other sectors and other countries in the region) and calculated (again, based on Bloomberg data) their one-year returns up to 12pm on Monday 25 April 2011.

So how do they fare? Looking at the data, it’s obvious that most analysts’ returns have suffered as a result of their coverage on the two biggest Abu Dhabi developers, Aldar and Sorouh. Aldar reported its biggest ever loss in the last quarter of last year, taking writedowns of $3.1bn, and also received a $5.2bn bailout from Abu Dhabi in January. Similarly, Sorouh posted a $54m loss in the last quarter of 2010, after setting aside money to cover impairments and provisions. As the Abu Dhabi property market took up a holding pattern last year, waiting for more supply to come onto the market, Sorouh saw full-year revenue drop by 61 percent.

Click here to see the UAE’s best and worst real estate analysts

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Posted by: Marty

Rather than focussing just on the calls, the scope of this survey should have been broadened to collate what local/regional institutional investors think about the guidance & insight that they have received from these real estate analysts on investors' stock investments within the sector and which analyst's advice/analysis can these investors consistently rely upon (see Institutional Investor ranking). Sometimes trend becomes a friend and calling a buy or sell on any sector is a relatively easier job vs. what's difficult is to have solid thought & a well-argumented thesis that in most investors' view forms the real job of an analyst. If the survey was done on these parameters, I am quite sure the results then would have been significantly different from what has been presented. But thanks for your effort on this survey in any case.

Posted by: Anil

Actually, it's the easiest job in the Gulf to predict property price movements. The tough part comes only when one has to be truthful. But then, that's what separates the men from the boys.

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