MSM in positive zone

07/04/2013 08:17 AST

The MSM index The MSM 30 index closed 0.99 per cent higher for the week ended April 4 to close at 6,111. The financial index gained 3.32 per cent, while services index declined 0.49 per cent and industry index rose 1.85 per cent.

DIDIC reported ten-fold increase in consolidated net profit at OMR11.08 million in 2012 compared to OMR1.09 million in 2011. The company's 2011 profit was affected by one-time loss on legal case accounted for by its banking associate in 2011. Last week, BankDhofar received back OMR26.1 million from the Primary Court which it had transferred to the court in June 2011 in lieu of the legal case filed by HSBC Oman (formerly OIB) against Ali Redha Group and BankDhofar.

The stock trades at 1.17 times its 2012 consolidated book value per share of 417 baisas and carries a dividend yield of 6.2 per cent. Al Hassan Engineering has risen close to 15 per cent in the past trading week.

The company announced bagging two contracts — one at its Abu Dhabi subsidiary valued at $11.11 million and the other for construction works at Saih Nihayda condensate stabilisation project at Saih Nihayda, Oman valued at $26 million.

Transgulf Investment has gained 10 per cent in the past two weeks tracking gains in the investment sector.

Transgulf Investment and Al Madina Financial & Investment Services agreed to a merger between the two companies subject to the shareholders approval in their respective EGMs. Transgulf has key investments in Al Madina Real Estate and Tilal Development. The stock is trading at 1.07 times its consolidated book value of 129 baisas.

GCC market upbeat

Most Gulf Cooperation Council (GCC) markets rebounded from their recent lows in the previous week led by the UAE, Kuwait and Oman. The rest of GCC bourses ended flat.

Burgan Bank reported a 10 per cent year-on-year growth in net profit in 2012 at 55.6 million Kuwaiti dinars, driven by a 13.7 per cent year-on-year growth in net interest income to 118.9 million dinars. Loan book grew 50 per cent year-on-year to 3.4 billion dinars, while deposits rose 32 per cent year-on-year to 4.9 billion per cent — both partly attributable to the acquisition of Eurobank Tefken in Turkey during the year. The stock trades at a P/BV multiple of 1.7x its last reported book value per share. We have a bullish view on this stock as earnings may receive a big boost from loan book expansion in 2013.

NADEC reported a net profit of 95.7 million Saudi riyals for 2012, a 5 per cent year-on-year growth, supported by an 11 per cent year-on-year growth in sales to 1.73 billion riyals. Impact on profitability was muted by an increase in operating expenses during the year due to expansion of sales operations and increase in staff expenses. The stock trades at a P/E multiple of 17.9x its 2012 earnings per share of 1.59 riyals.

Dubai Investments (DIC) reported a net profit of Dh321 million in 2012, a 58 per cent increase year-on-year, supported by revenue growth of 5 per cent year-on-year to Dh2.6 billion and no increase in operating expenses. During the year, the group divested its shareholding in five entities to unlock investment value, make new investments and diversify the investment base. In 2013, management has indicated plans for further divestments which are expected to provide significant returns. The stock trades at a P/BV multiple of 0.42x its latest reported book value per share of Dh2.31. We have a buy recommendation on DIC.

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.

Agencies