Lacklustre trading on MSM.
As highlighted in our earlier report, investment companies are again finding investor attention for two possible reasons: First, low real (inflation adjusted) interest rates tend to drive some investors to seek return in high yield bonds and high beta stocks to achieve their target return on a portfolio basis and the other reason is that low valuation of investment companies and liquidity improvement in them are two major drivers for these stocks.
Al Anwar Holding gained another 2.6 per cent in the previous week after an 8.6 per cent gain in the preceding week. We expect this stock to outperform the market in the near-term. The group reported a net profit (attributable to equity holders) of RO511000 for the financial year 2011-12 compared to a net loss of RO1.2 million in the financial year 2010-11.
During the year, the company divested a 51 per cent stake in subsidiary Sun Packaging and increased its stake in Taageer Finance from 25.63 per cent to 33.63 per cent. The stock trades at a P/BV multiple of 0.8x its latest reported book value per share of RO0.151.
Gulf Investment Services reported a net loss of RO747,000 in the second quarter of 2012 compared to a net profit of RO157,000 in the same quarter last year. The company had recently announced making an investment in real estate in Dubai by acquiring 28 apartments, which are leased out to tenants. The stock trades at a P/BV multiple of 0.7x its latest reported book value per share of RO0.118. This stock is seeing good volumes in recent sessions and has a bullish outlook.
Ahli Bank recovered 3.5 per cent in the previous week on a high volume. The bank posted a second-quarter net profit of RO5.91 million, 27 per cent higher year-on-year. Net interest income grew 18 per cent year-on-year, while other operating income grew 48 per cent year-on-year. Loans and advances rose 7.1 per cent quarter-on-quarter while customer deposits saw an increase of 7.9 per cent. The stock currently trades at 1.1x its latest reported book value per share of RO0.139.
GCC market gains
All the other GCC markets gained in the previous week with the exception of Kuwait and Bahrain. Real estate and banking stocks continue to hog limelight in the UAE while sector gains in the Saudi market have been broader. We have a bullish view on the following stocks:
Al Rajhi Bank reported a net profit of 2.09 billion Saudi riyals in the second quarter of 2012, growing 13.6 per cent year-on-year and 4.1 per cent quarter-on-quarter. Loan growth during the quarter remained healthy growing four per cent, while deposits remained flat sequentially. The stock trades at a P/BV multiple of 3.2x its latest reported book value per share.
RAK Properties reported a net profit of Dh22.9 million in the second quarter of 2012, a 30 per cent year-on-year decline attributed to provisioning for impairment of investments and receivables. Revenues for the quarter rose more than 300 per cent to Dh255.2 million. The stock trades at 0.2x its latest reported book value per share.
Aldar Properties reported a net profit of Dh417.9 million in the second quarter of 2012, a 228 per cent year-on-year growth, driven by a strong improvement in revenues by 497 per cent year-on-year to Dh4.6 billion.
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Muscat Press and Publishing House SAOC 2012
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