The United Arab Emirates is not having a good time of it. Not only are the emirates’ equity markets the poorest performers in the region in the year to date but second-quarter earnings of the 21 UAE listed companies monitored by EFG-Hermes came in nearly a third lower than the expectations of the bank’s analysts. Just three stocks – Aldar and Abu Dhabi Commercial Bank in Abu Dhabi and Emaar in Dubai – accounted for the bulk of the nasty surprise.
Aldar, the property developer, was hit by a higher Dh250m ($68m) charge for receivables – typically buyers of land bought from the developer who have not yet paid up, says Jad Abbas, EFG’s real estate analyst. The developer has also slowed the handover of some properties at the 500-unit Bandar development on Raha Beach in Abu Dhabi.
“The top line was not that disappointing but the bottom line was hit by the impact of those provisions . . . That’s where the big swing factor was,” Mr Abbas says.
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