Market Summary
Market Summary
Listed below are some of our recent recommendations. Though there has been
significant appreciation in the price levels we expect further value unlocking
to take place and we are recommending these stocks with a long term time
positive outlook.
|
Raysut Cement |
EPS Actual
(RO) |
Book Value |
CMP |
Dividend |
Dividend
yield |
PER |
|
FY2006 |
FY2007 |
FY2006 |
RO |
FY2007 |
(%) |
FY2006 |
FY2007 |
|
0.151 |
0.103 |
0.403 |
0.329 |
2.362 |
0.1 |
4.23% |
|
The recent capacity additions and
buoyant macro economic conditions prevailing in the construction sector
all have set a good stage for very good performance for Raysut Cement
during the current year. Favorable demand conditions prevailing in the
export markets combined with lack of stiff competition from Oman Cement
are supporting to this argument. Sales realizations for the company
stands at all times during 2007 and is expected to scale new highs
during this year. At current market price of RO 2.369, Raysut cement is
trading at 13.9x its FY2008E earnings. We reiterate our BUY
recommendation on shares of Raysut Cement |
|
Bank Muscat |
EPS Actual
(RO) |
Book Value |
CMP |
Dividend |
Dividend
yield |
PER |
|
FY2006 |
FY2007 |
FY2006 |
RO |
FY2007 |
(%) |
FY2006 |
FY2007 |
|
0.078 |
0.073 |
0.583 |
0.386 |
2.213 |
0.05 |
2.26% |
|
Bank
Muscat is targeting its growth through aggressive loan book additions
combinied with geographical expansions. It has placed its foot prints
fast growing economies like India, Pakistan, Bahrain and Saudi Arabia
through its associates. The biggest bank in Oman is well poised for a
diversified growth not only in the domestic market but also in the
Middle Eastern as well as Indian subcontinent markets. At current market
price, the shares of Bank Muscat are trading at 3.1x its FY2008E book
value and 21.1x its FY2008E earnings. We continue to give our BUY rating
on Bank Muscat shares. |
|
Oman Telecommunication |
EPS Actual
(RO) |
Book Value |
CMP |
Dividend |
Dividend
yield |
PER |
|
FY2006 |
FY2007 |
FY2006 |
RO |
FY2007 |
(%) |
FY2006 |
FY2007 |
|
0.149 |
0.108 |
0.415 |
0.375 |
1.949 |
0.1 |
5.13% |
|
The
sole fixed line provider as well as the biggest mobile telecommunication
provider in the country is trading at discount to the services index as
well as to the MSM30 index. Cost efficiencies arising out of merger
between Omantel and Oman mobile are expected to show results starting
the very first year itself. The government’s decision to divest
strategic stake to foreign investor will bring technology innovations to
the company’s services. At current market price of 1.949, Omantel is
trading at 10.8x its FY2008E earnings. We reiterate our buy rating on
the company. |
|
Bank Sohar |
EPS Actual
(RO) |
Book Value |
CMP |
Dividend |
Dividend
yield |
PER |
|
FY2006 |
FY2007 |
FY2006 |
RO |
FY2007 |
(%) |
FY2006 |
FY2007 |
|
-0.05 |
0 |
0.493 |
0 |
1.599 |
0 |
0 |
|
The share price of Bank Sohar has rallied more than 220% since listing
with expectations of excellent performance in operations. The bank has
been able to rise up to the expectations of its investors. At the
current price of RO 1.633, the share is trading at 3.3 times of its Book
value, which is in line with industry standards. If the bank exercises
the capital call of 500 Baizas from shareholders, the P/BV would change
accordingly. However we do not feel that the current valuations do not
reflect the future potential the bank is holding. Given the very
positive attitude of the management in running the business combined
with the positive projections of Omani economy, we feel that
accumulating the shares of Bank Sohar with a long term investment
outlook could yield extraordinary returns to the investors. |
|
Bank Sohar |
EPS Actual
(RO) |
Book Value |
CMP |
Dividend |
Dividend
yield |
PER |
|
FY2006 |
FY2007 |
FY2006 |
RO |
FY2007 |
(%) |
FY2006 |
FY2007 |
|
0.169 |
0.106 |
0.311 |
0.154 |
3.006 |
0.04 |
1.33% |
|
At current market price of RO 3.006, Oman Cables is trading at 12.4X and
10.4X of its FY2008E and FY2009E earnings respectively. We believe that
Oman Cables is all set to take full advantage of the sustained real
estate boom, industrial expansion and infrastructure development that is
happening all across the MENA region through its capacity expansion
exercises that were completed during FY2007. We continue to maintain our
long term positive outlook on the company’s business and its plans for
investing in related businesses. We recommend buying stock at current
level with long term investment view. |
Research
research@usoman.com
Tel: + 968 24788647
Note: The
stocks have not been listed in any order of preference. Choice has been made on
the basis of market trends and internal valuation at current quoted prices.
Current Market Prices indicated, are as on 05thNovember 2006 and
these recommendations shall not hold true at substantially higher price levels.
PE calculations have been made on current prices and expected earnings figures
from our analysis..
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This
report has been prepared on the basis of publicly available information,
internally developed data and other sources believed to be reliable. While
all care has been taken to ensure that the facts stated herein are accurate
and the estimates, opinions and expectations contained herein are fair and
reasonable, neither United Securities LLC, nor any of its employees shall
be, in any way, responsible for the contents. This shall not be construed as
an offer to buy or sell the investments referred to in this report.
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