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UAE’s Air Arabia Surges To Near 5-Year High

UAE’s Air Arabia Surges To Near 5-Year High

Air Arabia is the top trader on the UAE bourse after jumping 8.3 per cent to reach its highest levels since October 2008.

Dubai-listed budget carrier Air Arabia surge to a 56-month high, leading a rally on the emirate’s bourse ahead of UAE second-quarter earnings season.

Air Arabia jump 8.3 per cent to reach its highest level since October 2008 and is also the biggest gainer and top trader on the market.

“Air Arabia has been our favourite pick since the beginning of the year because it’s a defensive stock that also has a high growth story,” says Marwan Shurrab, fund manager and head of trading at Vision Investments.

“Not only institutions are piling in but retails are also aggressively buying – it has the best dividend yield in the market,” he adds.

Air Arabia has a 12-month forecast of a 6.4 per cent yield, which compares with 4.7 per cent for a selection of regional stocks, according to Reuters data.

The company has already paid its annual dividend for 2012, which may indicate many recent buyers are long-term investors.

Two analysts polled by Reuters forecast Air Arabia will make a second-quarter net profit of between Dhs67.2 million and Dhs82 million. The carrier posted a profit of Dhs65 million in the year-earlier period.


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