Karam Aldabbagh is an equity trader at Al Ramz Securities in Abu Dhabi.
What is the asset class and geography you are focused on?
I only deal with equities. I am focused on the entire Mena region, specifically now on the UAE markets. Most portfolios I deal with are weighted 50/50 towards long-term and short-term trading. I try to stay with the most liquid stocks which, these days, are the real estate or property stocks.
What is the outlook for the month ahead?
I think we will have a very calm month, especially for the next two weeks. Ramadan helps, but the market needs to stabilise and the holy month will help. The market is now reviewing what happened and investors are looking closely at prices to see if they are good or bad and reallocating their portfolios. Everyone is cutting exposure to stocks that have advanced in 2014 and are now getting back to high dividend, low-price-to-book-value stocks. Investors are looking at fundamentals and companies that have a well-rounded strategy – not just explosive growth.
What are the main risks, either upside or downside, to the outlook?
Downside, I think, is the continuation of the previous mistakes of brokerages giving excessive margins for their clients to trade and speculate. Also SCA [Securities and Commodities Authority] did not do anything with regard to the crash. The SCA should have stopped Arabtec trading for at least one day, and I don’t think the SCA has realised its responsibilities yet.
What is the best investment at the moment?
For dividend yield, First Gulf Bank and Air Arabia as their price-to-book and price-to-earnings values both are good. Al Waha Capital looks good as it is likely to post good second-quarter results. For high-risk investors, I would advise them to put a small part of their portfolio, 10 per cent or 15 per cent, towards Arabtec. Only for very short-term profits, though. Those that invested recently have lost a lot, long-term investors are still in profit and most of my investors got out before it went bad.
What was the best investment you were ever involved in?
It was RAK Ceramics. Even at today’s prices the stock is good, the management is good, people should wait until it is at Dh3 or below. I bought in late November at Dh3. We got out at Dh4.20 and received a Dh0.25 dividend.
What was the worst?
Arabtec. When Arabtec was rising, there was a lot of euphoria in the market. A lot of clients were blaming brokers for not being told about Arabtec. For me it was a high-risk stock but no other stock was able to perform like it. Basically, you have to go with the flow on Arabtec for the client’s interest and in the end lots of people ended up getting smashed.
ascott@thenational.ae
