EFG Positive On Q3 Earnings; Expects Q4 Market Rally; No UAE-Qatar MSCI Upgrade Though | alifarabia

The regional stock markets may be sending negative signals, but the Middle East listed companies are expected to see a 38% rise in earnings in the third compared to the same period last year, according to EFG-Hermes estimates.

“Materials sector earnings are driven by higher oil prices, lower provisioning and loan growth will likely drive earnings growth for the Saudi banks, and the UAE’s real estate sector will likely see a Y-o-Y turnaround after heavy losses from UP and Aldar in 2010, in our view. (Excluding UP and Aldar reduces earnings growth expectations to 16.8% Y-o-Y and 2.6% Q-o-Q). We believe Q-o-Q growth will be driven by Emaar and UP showing strong earnings growth, seasonally high earnings from SEC and Air Arabia due to the summer period, and OCI, which should benefit from strong fertiliser prices,” notes EFG.

MENA corporate earnings will rise nearly 21% year-on-year, according to the Egyptian bank.

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