United Arab Emirates shares are more attractive than those in Saudi Arabia because the nation is less vulnerable to oil price swings and Dubai’s real estate industry is starting to recover, Saxo Bank A/S said.
A 19 percent advance for Dubai’s DFM General Index makes it this year’s best performer in the six-nation Gulf Cooperation Council (BGCC200), beating 11 percent gain for Abu Dhabi’s measure and 4.9 percent for the Saudi Tadawul All Share Index. (SASEIDX) Shares in Dubai and Abu Dhabi trade at respective price to earnings ratios of 12 times and 9.2 times, below 14 times in Saudi Arabia.
“We are more positive on the U.A.E. as the country’s policy has been to focus on diversifying its income stream on tourism and the financial sector, meaning there’s less dependency on oil,” Peter Garnry, an equity strategist at Saxo Bank, said in an interview in Dubai yesterday. “Saudi Arabia on the other hand is exposed to increased vulnerability due to its dependency on oil.”
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