Despite everything, there were some clear winners in 2020 among UAE's listed companies
For the week ended February 18, DFM declined 1.37 per cent and ADX lower by 0.41 per cent.
Global equities, in general, are subdued as sovereign yields climb. In the bond market, US 10-year yields have broken above March 2020's high to touch 1.33 per cent. Nonetheless, the overall trend of equities is likely to be bullish as the rise in yields is due to high growth expectations rather than tightening monetary policy.
Among UAE equities, the top performers were Easy Lease Motors (up 16.44 per cent), Al Khaleej Investment (14.55 per cent), RAK Properties (11.32 per cent), Oman Insurance (10.26 per cent) and Al Ramz Corporation Investment (8.11 per cent).
Out of the 128 listed companies, 52 have so far announced their earnings for 2020. An analysis of the numbers might not give a complete picture, but will give an idea about trends. As expected, aggregate revenues and profits have declined. This is not surprising as the pandemic had ravaged economies in the second quarter of 2020.
The companies that reported saw revenues fall 7.75 per cent from Dh280 billion to Dh258 billion, while profits fell by 34 per cent from Dh67 billion to Dh44 billion.
IHC by a distance
Well, no prizes for guessing on which was the fastest-growing company in the UAE's listed space. As any UAE investor would know, International Holdings Co (IHC) with a market capitalisation of Dh84.69 billion is the top performer on the revenue side.
Aided by acquisitions, IHC grew its sales by a whopping 460 per cent to Dh7.05 billion, while profits grew an astonishing 497 per cent to Dh3.01 billion. The other performers in terms of sales growth are Waha Capital (up 93.74 per cent), Dubai Financial Market (24.14 per cent), Aldar Properties (17.41 per cent), Emirates Driving (15.11 per cent), Tabreed (14.51 per cent), National General Insurance (12.41 per cent), Fujairah Cement Industries (8.92 per cent), United Foods (7.43 per cent) and Aramex (5.05 per cent).
Aldar and Damac grew their sales in a challenging real estate market.
The best performers in terms of profits are United Kaipara Diaries (593 per cent), Ras Al Khaimah National Insurance (281 per cent), National General Insurance (164 per cent), United Foods (35 per cent), Abu Dhabi National Insurance (30.52 per cent), Emirates Driving Company (20.39 per cent), Tabreed (16.48 per cent), Dubai Financial Market (14.34 per cent) and ADNOC Distribution (12.93 per cent).
For investors in UAE equities, it is worth watching these top performers. These companies excelled amidst the most significant economic crisis of the last 100 years. There is no reason that they will not perform well in 2021.
- Vijay Valecha is Chief Investment Officer at Century Financial.