Optimism for UAE Bank Stocks Despite Middle East Conflict

SadaNews - Cantor Fitzgerald has recommended purchasing shares of United Arab Emirates banks despite the regional conflict threatening the Gulf nation, calling these shares "low-risk and high-return" investments.

Analyst Kato Mukoro advised "over-weighting" shares of seven banks in investment portfolios, citing the UAE's commitment to establishing itself as a safe haven, alongside the strength of its economy and low equity costs.

Mukoro wrote in a research note to clients: "We recognize that the escalation of the regional conflict involves significant risks and volatility for local markets in the short term, but the core investment thesis for the stocks we cover is based on the fundamentals that support long-term investment."

Opportunities in UAE Bank Stocks

His favored stocks include Ras Al Khaimah National Bank, First Abu Dhabi Bank, and Abu Dhabi Islamic Bank. The target price for Ras Al Khaimah National Bank’s share is estimated to reach 18.40 dirhams, which is almost double the estimates of any other brokerage firm followed by Bloomberg, indicating a potential rise of over 80%.

Cantor Fitzgerald presented this optimistic outlook while UAE’s main markets prepare to resume trading on Wednesday after a two-day shutdown amid the Iranian crisis. The conflict threatens the image of stability that the UAE has carefully crafted in a troubled region, with risks affecting tourist arrivals and foreign investment.

Mukoro stated that he expects market performance to be weak upon reopening; however, this "could offer attractive opportunities for investors who focus on the long-term fundamentals of corporate stocks."

The analyst added in separate written comments to Bloomberg: "Emirati banks have significant resilience and can withstand short-term pressures."