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Positive trend continues

by Times News Service
February 16, 2013 , 7 : 06 pm

The MSM 30 index closed 0.78 per cent higher for the week ended February 14, closing at 5,898. The financial index gained 0.77 per cent, industry index gained 1.60 per cent, while the services index gained only 0.11 per cent.

Omantel posted a 4.1 per cent year-on-year increase in consolidated net profit at OMR116.2 million. The company's subsidiary WorldCall posted a loss of OMR6.9 million against a net profit of OMR1.3 million in financial year 2011. Consolidated revenue rose 1.4 per cent year-on-year to OMR458.9 million while total subscriber base grew 8.5 per cent year-on-year to 3.83 million. The board has proposed a final cash dividend distribution of 75 baisas for the financial year 2012 and an interim dividend of 40 baisas for the financial year 2013 payable in August. The stock trades at 9.16 times if 2012 EPS and carries dividend yield of 8 per cent.

Oman United Insurance reported a 138 per cent year-on-year jump in 2012 net profit at OMR 2.64 million.

The company is likely to pay a cash dividend of 18 baisas for the current fiscal which amounts to a dividend yield of close to 8.3 per cent. The stock trades at 0.96x its latest reported book value of 220 baisas. We have a bullish view on this stock.

Galfar Engineering's financial year 2012 net profit rose 68 per cent year-on-year to OMR8.93 million driven by a 9.6 per cent year-on-year growth in revenue. In the fourth quarter of 2012, the company reported total income of OMR101.4 million which was higher by 48 per cent year-on-year and 25 per cent quarter-on-quarter. Net profit rose sharply to 4.93 million in the fourth quarter of 2012. The stock trades at 13.5 multiples its 2012 earnings per share.

GCC markets rise
All the Gulf Cooperation Council (GCC) markets have ended in the green led by Dubai and Kuwait. In our view, Dubai and Abu Dhabi markets are the most bullish markets in the GCC followed by Kuwait and Oman.

Ras Al Khaimah Cement Company reported a net loss of Dh7.3 million during 2012, which was lower than the Dh19.9 million loss reported in 2011. However, on an operating earnings before interest, taxes, depreciation and amortisation (Ebitda) level the company remains profitable with Ebitda growing strongly to Dh20.2 million in 2012 from Dh4.4 million last year, supported by a 14.3 per cent year-on-year revenue growth and higher margins. The recovery in the UAE real estate market coupled with increase in planned government spending on major real estate/ infrastructure projects is expected to give further momentum to the company's top line growth and support the recovery in margins going forward.

The board of directors have announced a cash dividend of 5 per cent and stock dividend of 5 per cent for 2012.

Abu Dhabi Commercial Bank is the third largest bank in the UAE and second largest in Abu Dhabi by assets. The bank reported net profit of Dh2.73 billion in 2012, up 60 per cent year-on-year excluding the Dh1.3 billion gain from the sale of RHB Capital recorded in 2011. Net interest income during 2012 rose 11 per cent year-on-year, driven by an increase in net interest margins. Profit improvement was also supported by a 4 per cent year-on-year growth in fee income coupled with lower-than-expected provisioning. The stock currently trades at a P/BV multiple of 0.88x its latest reported book value per share

Disclaimer: This column expresses only the views of the contributor and investing in stocks carries risk of financial loss for which the contributor is in no way liable.

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