- Abu Dhabi – Rami Samih
Date: October 18, 2020 Financial experts and analysts expected that the results of the listed companies will witness a significant improvement in the third quarter of this year, on a quarterly basis compared to the second quarter, supported by several factors, foremost among which is the reopening of the economy, improvement in business sectors and government stimulus plans in the face of the repercussions of the pandemic.
The experts and analysts polled in the economic statement added that the expectations suggest an improvement in the results of investment, communications, transportation, tourism and hotels companies, while the results of the banks will stabilize, especially as they will resort to setting aside high allocations to face any future risks or challenges, as well as the results of major real estate companies, taking advantage of Lower interest rates, lower prices, which will increase demand in the future.
Experts and analysts said that despite the repercussions of the pandemic in the second quarter, Emirati companies remained at the forefront, in terms of high profitability compared to their peers in the Middle East and North Africa region, and it is expected to remain in the lead in the third quarter, mainly supported by the strength and success of the national economy. In coming out with the best results from the repercussions of the pandemic, which shook global markets, in light of the presence of many positive signs and indicators of the economy’s recovery.
Raed Diab, Vice President of Research and Investment Strategies at KAMCO Invest, said that there is a state of anticipation in the financial markets awaiting the financial results of companies and banks listed for the third quarter of the year, as some results began to record positive business results compared to the second quarter, supported by an improvement Business sectors as life returns to normal, after the opening of the economy and the receding of the pandemic.
He added that the results of the companies in the second quarter were greatly affected by the pandemic with the closure of the economy and the suspension of many businesses, and therefore with the return to normal life, the listed companies are expected to witness a significant improvement in their revenues and profits, supported by the stimulus plans launched by the government and the Central Bank to support sectors Actions in the face of the pandemic.
Diab said that the investment, insurance, tourism, aviation and transport sectors would witness remarkable growth in revenues, while there will be stability and improvement in the results of banks’ business with an increase in the demand for lending, as well as real estate companies, which will benefit from the increase in demand with lower prices. It is also expected that we will witness growth in The results of telecom companies with the increase in demand for Internet services dramatically during the pandemic in light of distance learning and work.
Yogesh Khirajani, an investment research analyst at Century Financial, expects all listed companies to record good results in the third quarter of this year compared to the second quarter, with the economy reopening and business sectors improving. He added that the listed airlines are expected to achieve a remarkable growth in revenues compared to the first and second quarters, with the aviation sector returning to work again, and an increase in the number of flights compared to an almost complete halt in the first half of the year, and it would not be surprising to see a growth of more than 100% compared to the previous quarter. .
He stated that health sector stocks such as Julphar are likely to record good results due to strong demand, in light of the health emergency caused by the pandemic, and for the same reason, large-cap insurance companies are likely to witness growth in revenues in the range of 30 to 50%.
Tariq Qaqish, CEO of Salt Financial Advisors, said that the results of the listed companies will improve on a quarterly basis, especially as the third quarter witnessed a reopening of the economy compared to the complete closure in the first and second quarter, while the results will be affected on an annual basis compared to the third quarter of 2019.
Qaqish added that it is likely that there will be a variation in the profitability of companies, as some companies will witness growth as the business improves and life returns to normal, while some sectors will be affected, in light of some special challenges represented in the cash flows and the rise in costs as a result of the pandemic situation.
The Marathon began the results for the third quarter last week with the announcement of ‘Union Properties’ its transformation to profit by about 509.2 million dirhams in the third quarter of 2020, compared to losses of about 81.5 million in the comparative period of 2019, while banks’ Emirates NBD, Emirates Islamic Bank and Dubai Islamic Its results during the current week.