Do buy Dubai (and Saudi too), Merrill says

FT Alphaville has featured a series of bearish articles on the Emirates of late (see related links for examples), so here’s a bullish counterpoint: Merrill Lynch believes the region is “a compelling trading buy for investors looking for laggards.”

Dubai is the best trade, and Saudi Arabia the best investment, according to Michael Hartnett, Merrill’s chief global equity strategist:

Hard to find much that has underperformed US banks in past 3 years. But Dubai has, thanks to its real estate and oil bust. It’s now cheap, unloved and the combo of oil>$60/b and improving credit spreads are powerful drivers, in our view. We believe the best investment case in the region remains Saudi Arabia.