What is So Special About Marakez? « Alpha Dinar- talking GCC finance

Marakez is a newly listed Real Estate company in Kuwait. They own properties and projects in Kuwait, Qatar, and Syria. Today (Tuesday 28th of December) was the first day the company traded on the Kuwait Stock Exchange. The intial price the stock was allocated to was 500 fils. The stock went up to to 550 fils (the maximum allowed), but later in the day came back down to 500 fils.
Digging into the company’s financials, I found that, in terms of market multiples, the price the stock was allocated was unjustifiable. Based on the Sept 2010 financials, the stock book value is at 172 fils, meaning that the stock’s P/BV is 2.9x versus the industry average 0.57x (after taking out some outliers). The next most expensive stock, in P/BV terms, is Al Modn with 1.4x, less than half of Marakez’s ratio. If we look at the P/E, Markez’s is valued at 43.74x earings vs. the industry average of 20.65x (again after taking out some outliers).

Yesterday, Alqabas newspaper quoted the Company’s CEO, Abdulhameed Dashti, as saying “Those who own Marakez’s stock are lucky, lucky, lucky.” I guess he has a point given the very rich valuation attached to the stock.