(Corrects trading location in second paragraph.)
Dec. 4 (Bloomberg) -- Abu Dhabi Ship Building Co. surged to the highest level in more than two years as investors deemed shares of the state-linked builder of commercial navel vessels were cheap relative to peers.
The stock surged 14 percent to 1.82 dirhams, the highest since October 2011, at the close in Abu Dhabi, bringing the three-day jump to 36 percent. About 16.7 million shares traded, 24 times the three-month daily average. ADSB was the second-biggest gainer on Abu Dhabi’s benchmark index on a percentage basis, which rose 0.3 percent.
The shares, which have doubled this year, trade at a price-to-earnings ratio of 4.4, compared with 11 for the ADX General Index. Abu Dhabi’s government holds 10 percent of ADSB and owns another 40 percent through Mubadala Development Co., a sovereign-wealth fund of the oil-rich emirate. ADSB’s market value has climbed to 385.8 million dirhams ($105 million).
“It’s one of the few stocks which is trading at very low price-to-earnings,” Talal Touqan, head of research at Al Ramz Securities in Abu Dhabi, said by phone. “Traders and savvy business people” are looking at opportunities, he said.
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