Emirates NBD Advances on First-Quarter Profit Bets: Dubai Mover

Emirates NBD PJSC rose for the third time in four days amid bets first-quarter profit improved and as the largest bank in the United Arab Emirates was said to sell 10-year bonds.

The shares increased 2.5 percent to 4.05 dirhams at the close in Dubai, bringing a rally this year to 42 percent. Emirates NBD was the biggest gainer on the benchmark DFM General Index, which rose 0.2 percent. The Dubai-based lender may sell subordinated tier two bonds, two people familiar with the plan said yesterday, declining to be identified because the information is private.

U.A.E. banks are showing signs of recovery after the global credit crisis weakened lending, crimped investment banking and spurred loan defaults. Emirates NBD’s fourth-quarter profit more than tripled and the bank may post a 9.6 percent increase in 2013 net income, according to the median estimate of four analysts on Bloomberg.

“Profit prospects are good and the stock has a high dividend yield,” said Nabil Farhat, partner at Abu Dhabi-based Al Fajer Securities. The bond sale “will help the bank meet its future finance commitments.”

Emirates NBD may raise more than $1 billion from private bond placements this year to reduce funding costs and tap investor appetite for Dubai credit, Tony Bush, managing director for global funding, said in January.

The stock has a 12-month dividend yield of 6.2 percent, compared with 3.8 percent for Dubai’s gauge, data compiled by Bloomberg show. The share rally this year compares with a gain of 2.5 percent for Dubai Islamic Bank PJSC and outpaces an advance of 17 percent for the DFM General Index.

Four analysts recommend investors buy the shares of Emirates NBD, while three have a hold rating and one says sell, according to data compiled by Bloomberg.

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