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Sunday, 18 February 2018

Dubai stocks trading at cheaper valuations than Cairo

Stocks in Dubai are showing the biggest discount when compared to the EGX 30 in almost three years, Filipe Pacheco writes for Bloomberg. “A rally in Egyptian stocks since the country’s 2016 currency float made its benchmark the best performer in the Middle East last year, while a lack of positive catalysts has weighed on shares in Dubai,” Pacheco writes. Naeem Holding director of research Allen Sandeep explains that “the undervaluation in Egypt shares was explained, to a certain extent, by the currency risk premium that was perceived by investors last year … With no more currency risks and repatriation challenges, there is a valuation discount adjustment that is bound to happen.” Equities in the UAE are more event driven, with people nervous about the outlook for oil, and are linked to weaker USD, Sandeep adds.

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