Analysis of UAE Bank Stocks

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Analysis of UAE Bank Stocks

Author Info

Ananth Rao (Dubai University College)

Additional information is available for the following registered author(s):

Ananth Rao

Abstract

Listing of stocks on the stock exchange offers business firms several advantages such as diversification, liquidity, establishing a value for the firm etc. The present paper analyses stocks of six commercial banks (viz., Dubai Commercial Bank, Emirates Bank International, National Bank of Dubai, Mashreq Bank, National Bank of Abu Dhabi, and Abu Dhabi Commercial Bank) which constitutes 72% of the capitalisation of the banking sector in UAE. These bank stock prices are analysed for the trend and riskiness. Capital Asset Pricing Model (CAPM) a market equilibrium model is applied to these seven bank’s stocks. The betas of these banks were derived. Stock prices of all banks are found to be under-priced. It was considered that more general models like multi-factor CAPM and arbitrage pricing theory (APT) models could be more appropriate models for analysing the bank stocks due to imperfections in UAE market.

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Paper provided by EconWPA in its series Finance with number 0306001.

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Length: 17 pages
Date of creation: 07 Jun 2003
Date of revision:
Handle: RePEc:wpa:wuwpfi:0306001

Note: Type of Document - Windows 2000-Word; prepared on Windows-NT; to print on HP; pages: 17; figures: included. The article wass published in "Economic Horizon" (ISSN-1024-266X) Vol.21.No.82-AH1420-2000(2)
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Web page: http://129.3.20.41

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Find related papers by JEL classification:
G12 - Financial Economics - - General Financial Markets - - - Asset Pricing
G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies
G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Mortgages
G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Capital and Ownership Structure
O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment

This paper has been announced in the following NEP Reports:

NEP-ALL-2003-06-16 (All new papers)
NEP-CFN-2003-06-16 (Corporate Finance)

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This page was last updated on 2009-12-13.

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