Rated least expensive, these UAE stocks can give you good returns

If you’re looking to park your funds in an investment, which is cheap and with potential for higher returns, then here is the opportunity for you to invest in the UAE’s equities as they’ve been rated the least expensive in Mena region.

Bank of America-Merrill Lynch’s equity analysts have rated the UAE equities as overweight and the least expensive of the Middle East and North Africa (Mena) markets.

The analysts said in a note that the Dubai will benefit from the Iranian agreement with the Western powers on the nuclear issue which it expects to be reached this month.

The UAE equities recently gained on expectations that the ease of UN sanctions on Iran would improve trade between the two countries. On Monday, the UAE stocks consolidated after MSCI-led fund flowed into the local market with Dubai bourse edging up 0.5 per cent while Abu Dhabi's bourse gaining 0.7 per cent

BofA-ML rated Abu Dhabi Commercial Bank, Aldar Sorouh, Emaar, GMS, FGB and NMC Health as “Buy” and National Bank of Abu Dhabi “Underperform.”

BofA-ML analysts are neutral on Qatar equities, which are more expensive and would not benefit as much from an Iran deal, and is cautious on Saudi Arabia on high valuations. The Saudi equities have risen over the last couple of months hoping that the funds will come into the market as the bourse opens for foreign investors.

The BofA-ML note, dated on May 27h, said it’s overweight on many corporate credit in Eastern Europe, Middle East, and Africa (EEMEA).

“In the UAE, we are still positive on subordinated securities of banks and corporates. We think these securities offer decent value relative to the senior bonds. As the charts show, yields in the UAE are still among the lowest in EEMEA.”

Among UAE corporate credit, it’s “Overweight” on Majid Al Futtaim and DP World and “Underweight” on Taqa, Ipic and Mubadala.

Disclaimer: The equities mentioned and the investment advice provided by Bank of America-Merrill Lynch is generic in nature and may not suit all investors. You are advised to undertake your own due diligence and consult an advisor before making any investment decisions. Emirates 24|7 will not be liable for any losses – direct or indirect – that may arise from your reliance on such information.

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