Following a strong start-of-year rally, the UAE market is likely to see a further correction as companies go ex-dividend, but the uptrend could resume in coming months as the market is still attractively valued at around 11 times earnings, according to Invest AD Markets Outlook on Middle East and Africa markets bulletin April 2013.
Sentiment around Dubai continues to improve, with hotel occupancy rates high and the international airport overtaking Hong Kong as the third busiest in the world. In Saudi Arabia, the market remains lacklustre despite decent results from the consumer and telecoms sectors. However, with global petrochemicals prices inching up as Chinese buyers begin to stock up on inventory, Saudi petrochemicals stocks may well provide a catalyst for a rally in the second and third quarters. Qatar’s market has underperformed in 2012 and this year, but banks continue to experience strong growth and profits, which could catch the eye of investors in coming months.