DUBAI: Gulf Arab stock markets recovered yesterday as investors judged shares to be cheap relative to earnings expectations following a selloff triggered by foreign institutions this month.
Dubai stocks climbed for the first time in five days as Emaar Properties rebounded from a near 40-month trough, while Abu Dhabi’s benchmark snapped an eight-day losing streak as investors piled into banks. National Bank of Oman led a rally among Omani blue chips whose shares were pummeled after global institutions were lured out of the region this month by the dollar’s broad gains and a rebound in Western stocks.
“We are seeing buying across the board from retail investors, local institutions and even some foreign institutions,” said Jaysh Shah, Bank Muscat’s head of brokerage.
UAE banks are trading, on average, at 12.16 times expected 2008 earnings, while the Omani banking sector’s average price-to-earnings ratio is 14.41, according to Reuters data. “There was quite heavy foreign selling. Now we are seeing buying from investors who see long-term value,” Shah said.
