• Home
• /
• Local business

Morgan Stanley Upgrades ADCB

DUBAI — Morgan Stanlely has upgraded Abu Dhabi Commercial Bank to an ‘overweight’ from ‘equal weight,’ its top pick among Abu Dhabi-based banks, and raised the priced target for three other banks in the emirate, citing these banks’ better-than-expected first half results and attractive valuations.

Morgan Stanley also raised its earnings per share for the Abu Dhabi-based banks under its coverage by an average of 98 per cent for 2009, and 41 per cent for 2010 after their solid performance in the first six months of the year. “We have been surprised by the strength of first half results, especially loan growth, margins
 and cost control.” The price target of ADCB, the UAE’s third biggest bank by assets was raised to Dh3.17 from Dh1.95

First Gulf Bank maintained its ‘equal weight’ rating but its target price was raised to Dh18.84 from Dh11.50.

The rating of National Bank of Abu Dhabi was unchanged at ‘equal weight,’ while its target price rose to Dh13.30 from Dh.962. Union National Bank was also unchanged at ‘over weight,’ and its target price was raised to Dh4.27 from Dh3.53. “Among the generally strong first half operating performance of the Abu Dhabi banks, ADCB not only produced impressive core banking performance, but also gave us grounds to believe that the management team which joined in late 2008, is starting to resolve legacy issues that have weighed on the share price for so long,” Morgan Stanley’s team of bank analysts led by Daniel Cowan, said in a note to clients.
— rocel@khaleejtimes.com