Pre-MSCI Surge Bolsters Expensive Tag for Abu Dhabi's Best Stock - Bloomberg Business:
"Emirates Telecommunications Group Co. surged to a 10-year high, adding to investor concern it’s overvalued as it prepares to join MSCI Inc.’s emerging-markets index.
Shares of Etisalat, as it’s known, jumped 10 percent on Monday, their last trading day before MSCI inclusion, extending the gain this year to 66 percent, the most in Abu Dhabi. The valuation premium Etisalat commands over the MSCI’s developing-nation gauge based on future earnings climbed to the highest in about nine years.
At three multiples higher than the forward P/E ration for MSCI EM Index's, Etisalat is trading at the biggest premium in more than nine years.
Investors piled into Etisalat after the United Arab Emirates opened its biggest telecommunications operator to foreign ownership in September, a step that also put the shares on course for inclusion in MSCI’s gauge. As a result, the company bucked a stock selloff across the region sparked by a plunge in the price of oil, the source of most government revenue in the six-nation Gulf Cooperation Council."
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