Traders follow the market at the Kuwaiti Stock Exchange in Kuwait City. AFP PHOTO / YASSER AL-ZAYYAT
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So excluding the petrochemical sector, where margins are being directly damaged by cheaper oil, corporate earnings growth in many industries of the six-nation Gulf Cooperation Council is expected to be solid this year.The stock indexes of Saudi Arabia, Dubai and Qatar traded at large premiums to developed market indexes such as the FTSEurofirst 300 and Dow Jones Industrial Average at the end of September in terms of prices to projected 2015 earnings, Thomson Reuters data shows.Now Saudi Arabia is at 12.6 times expected earnings, Dubai at 11.2 and Qatar at 12.5, while the FTSEurofirst 300 and Dow are valued at 13.8 and 15.5 times respectively.Since Sept. 30, analysts surveyed by Reuters have raised their average forecast for low-cost carrier Air Arabia's net profit by 37.2 percent, while its shares have gained 21.2 percent."The regional banking sector is at some risk from deteriorating asset quality but compares well with its peer group and can be considered attractive given its strong capitalization and robust regulatory regime," Fadlallah said.Banks which are leaders in their countries command a premium: Saudi Arabia's National Commercial Bank and Qatar National Bank trade at 13.6 and 12.5 times forward earnings respectively.
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