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Bank of Sharjah Surges on Bets Shares Are Cheap: Abu Dhabi Mover

May 16 (Bloomberg) -- Bank of Sharjah gained the most in almost four months on investor bets the emirate’s largest bank is cheap compared with peers.

The stock soared 9.4 percent, the most since Jan. 27, to close at 1.75 dirhams as 2.2 million shares traded, or 4.6 times the three-month daily average. Abu Dhabi’s benchmark index rose less than 0.1 percent, rising for an 11th day. The bank, which has a 12-month dividend yield of 5.7 compared with 4.7 for Abu Dhabi’s banking index, last month reported a 23 percent jump in first-quarter profit.

United Arab Emirates lenders are advancing as they benefit from an economic recovery, with Abu Dhabi’s government restarting stalled projects and Dubai restructuring its debt. Shares of Emirates NBD PJSC, the country’s second-biggest bank, have more than doubled this year, while those of Dubai Islamic Bank climbed 58 percent in the period.

“It’s still cheap,” said Jaap Meijer, a director of equity research at Dubai-based Arqaam Capital Ltd. Bank of Sharjah “Investors are looking for deep value after rallies of Emirates NBD and Dubai Islamic Bank.”

Bank of Sharjah shares, which are up 37 percent this year, trade at a price-to-book value of 0.7 times, compared with 1.4 times for Abu Dhabi’s ADX Banks Index. Emirates NBD’s and Dubai Islamic Bank’s are at 0.9 percent.

Sharjah is one of the seven emirates that make up the U.A.E.

To contact the reporter on this story: Sherine El Madany in Dubai at selmadany@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

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