UAE bank results add to bullish sentiment

Improved earnings from UAE banks likely to add to bullish sentiment on Dubai and Abu Dhabi bourses

Improved earnings from UAE banks are likely to add to the bullish sentiment on the Dubai and Abu Dhabi bourses on Thursday, which are both at multi-year highs.

Dubai's top lender Emirates NBD (ENBD) posted a fourth-quarter net profit that more than tripled on the back of lower impairments and increased non interest income, beating analysts' forecasts.

ENBD has proposed a cash dividend of 25 percent for 2012, up from 20 percent for 2011.

The stock is up 17 percent this week on expectations of higher dividends and strong earnings.

Abu Dhabi Commercial Bank beat forecasts with a 32 percent jump in quarterly net profit, also proposing a 25 percent cash dividend for 2012.

"Overall, the results are positive - provisioning is declining and you see non-performing loans flattening, which signals that banks are becoming more comfortable from an asset quality perspective," says Ali Adou, portfolio manager at The National Investor. "It seems the provisioning cycle has bottomed."

The Abu Dhabi property sector, recently a focus of market speculation ahead of the merger of its two largest developers, Aldar Properties and Sorouh Real Estate, may be more downbeat after the latter's fourth-quarter profit missed analyst forecasts.

On global markets, Asian shares are taking a breather from recent rallies, though sentiment was underpinned by the US Federal Reserve's pledge to retain its stimulus policy and on signs of stabilisation in the euro zone.

Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

NOTE: Comments posted on may be printed in the magazine Arabian Business

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

All comments are subject to approval before appearing

Further reading

Features & Analysis
Danger zone: what would the wider impact of a slowdown in China have on the Gulf?

Danger zone: what would the wider impact of a slowdown in China have on the Gulf?

Last week’s stock market crash in China sent shockwaves through...

Blood on the bourse floor

Blood on the bourse floor

Arabtec’s share price collapse was the catalyst for a huge sell...

Taking stock

Taking stock

Gulf stock markets have seen a dearth of IPOs since the global...

Most Discussed