May 27 (Bloomberg) -- First Gulf Bank PJSC rose the most in almost two weeks on investor bets the shares of the bank controlled by Abu Dhabi’s ruling family are cheap.
The shares gained 1.8 percent, the largest advance since May 14, to 14.20 dirhams at the close in Abu Dhabi. The stock was the biggest gainer by index points on the benchmark ADX General Index, which increased 1.2 percent. The benchmark index declined 3.8 percent in the previous five days.
First Gulf slumped 9.4 percent in the previous seven days, closing yesterday at a 16 percent discount to the shares’ average 12-month price estimate of 16.69 dirhams, according to data compiled by Bloomberg. Kuwait-based Global Investment House raised the bank’s price estimate to 15.34 dirhams yesterday. The shares trade at 9.5 times estimated earnings that compares with 11.7 for the STOXX 600 Banks Index, according to data compiled by Bloomberg.
“Given that it has fallen from over 15 dirhams, it is attracting some buyers,” said Amer Khan, a Dubai-based director at Shuaa Asset Management. “The U.A.E. as a whole has tended to attract bids on any sizable pullback.”
First Gulf, which reported an 12 percent jump in first-quarter profit, will probably post the U.A.E.’s fastest loan growth in 2013, helping boost profit, EFG-Hermes Holding SAE said in December. The bank will post a 7 percent increase in net income, according to the mean estimate of 13 analysts on Bloomberg.
Twelve analysts recommend investors buy the shares, while five say hold and one says sell, according data compiled by Bloomberg.
The stock’s rally of 22 percent this year compares with a gain of 32 percent for the ADX General Index.
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