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Here are the UAE stocks disproving that old market saying about a subdued May


‘Sell in May and go away… is the famous financial world adage. But it didn t work with UAE stocks this year.
The saying suggests that stocks tend to underperform in May – this year, however, DFM rallied a stellar 7.37 per cent and ADX gained 8.46 per cent. The gains on DFM were powered by an 8.43 per cent rally for Emirates NBD and an 8.54 increase at Dubai Islamic Bank.
First Abu Dhabi Bank, with a weightage of almost 40 per cent in ADX, jumped 16.43 per cent, helping the index close higher for the month. Reports that First Abu Dhabi Bank s weighting in the MSCI Emerging Markets index could increase helped the rally. A strong rebound in the economy was a significant factor behind the solid performance of UAE equities. ....

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Rationale and mystery in Emirates Refreshments Co.'s stock upturn


Diversification plays
ERC planning to invest in real estate, construction and facility management, as well as in industrial and mining activities, and healthcare. And sectors like mining and food generally operate at razor-thin margins. It is highly unlikely that ERC will be making significant profits with a capital of Dh300 million, even if it can leverage it.
The current retail mania seems to have triggered this rally, and investors will be better off not chasing this rally.
Aldar Properties, a well-run real estate company, has assets of Dh39.5 billion from which it generated revenues of Dh7.98 billion in the last 12 months. And it struck a profit of Dh1.45 billion giving it a net profit margin of 18.2 per cent. ....

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Shuaa Capital's stock should be hitting right notes soon


Asset clout
With a Dh1.75 billion market cap and $13.6 billion as assets under management, this is just a stroll in the investment park. It is divesting non-core activities and is now a lean fighting machine. As a part of its restructuring, it sold its securities and market-making businesses for Dh100 million last year.
Shuaa, which identified Dh403 million worth of non-core assets in July 2019, has reduced it by 39% to Dh245 million. By the third quarter of 2021, it hopes to dispose all non-core assets. The core divisions are asset management and investment banking.
Cost cutter
Following its merger with ADFG (Abu Dhabi Financial Group), a lot of cost synergies were achieved. As against the targetted cost saving of Dh55 million, Shuaa Capital has already touched Dh30 million. It s operating income has risen to Dh226 million in the first nine months of 2020 compared to Dh120 million in in 2019. ....

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Emirates Refreshments gets a change of name - will it lift stock further?


Export pressures
Being in consumer staple sector, the company derives its revenues from its flagship packaged drinking water Jeema . Overall sales have taken a hit this year as number of hotels, restaurants and cafeterias closed down due to the pandemic. Even though the company’s local sales have somewhat improved post the re-opening of the UAE economy, exports continue to show a dip.
For the first nine months, the company managed to bring down its overall losses by reducing cost of sales (Dh11.25 million vs Dh22.40 million for 2019). This month, ERC approved a host of new measures at its general assembly, including a major name change and transfer of its flagship brand. ....

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