Most forecasts for fourth quarter off the mark

The gap between forecasts for 2009 fourth quarter earnings and the actual performance of UAE companies has widened owing to several factors, including unforeseen market dynamics, huge write-offs, provisions and impairment charges, among others.

An analysis by Emirates Business of projections and actual performance of 20 market majors in the UAE shows that forecasts for more than half of the companies for Q4 were way off the mark.

Only four companies beat the forecasts, and a few companies were close to the projections.

Aldar, Sorouh and Dana Gas were major underperformers when compared with their forecasts by leading investment houses.

Air Arabia, First Gulf Bank, du, Tamweel and Aramex exceeded projections. Companies that came close to projections were UNB, Emaar, etisalat, DSI and DFM.

Taimur Saadat, Head of Technical Analysis at Arab Capital Markets Resource Centre, said: "Random events happening in the economy are influencing the performance of companies. One should not blame analysts for this. Companies should inform about impairment charges and other provisions at least three to six months in advance."