Financial Analysis of Dubai Financial Market

Financial analysis
Name of the Student-
[DATE]
[Company name]
[Company address]

Introduction
With the changes in time and due to the sudden market changing factors, every
organization faces business risk in its business functioning. In this report, financial analysis
of the Dubai financial market has been analysed. There are three main listed companies of the
United Arab Emirates has been taken into consideration. In the first part of this report, share
price of these companies have been drawn from the available portal. The share price of these
three companies of last 10 years have been analysed to find the beta coefficient for these
three companies and find out whether these beta coefficients are stable or not. These beta
coefficient have been computed by using monthly stock return data from January 1, 2010 to
August 31, 2018. Therefore, by analysing the share price changes and return available to
shareholders due to the changes in the share price, recommendation have been prepared in the
end, whether investors should invest in these three companies or not. In this report, three
companies named, Air Arabia, Aramex and Emaar Companies have been taken into
consideration.

Background information on the selected companies
Air Arabia
It is Emirati low-cost airline Company which is having its head office in the A1
Building Sharjah Freight Center, Sharjah International Airport. This is indulged in providing
air services to its clients on domestic and international level. This company has increased its
overall revenue by average 24% since last three years Air Arabia., 2019).
Aramex Company
It is an international express, mail delivery and logistics services company based in
Dubai, United Arab Emirates. This company has several business segments and focuses on
the corporate, retail and express business area. This company was founded by Jordanian
Fadi Ghandour and Bill Kingson in 1982. It is the first Arab-based company to be listed on
the NASDAQ stock exchange. This company has increased its overall sales by 18% since last
three year and maintained high financial leverage (Easton, & Sommers, 2018).
Emaar Company
The Emaar Company is diversified real estate investment trust with a property
business portfolio of the predominantly South African assets. This company has been
indulged in operating its real estate business on international level and focused on
securitisation the assets to the investors and managed growing components of the offshore
assets in business. It is located in the United Arab Emirates. It is a public joint-stock
company, listed on the Dubai Financial Market, and has a valuation of US$9.7 billion. The
net income of the company has also increased to ZAR 8015.121 million which is 19% higher
as compared to last three year data
Beta coefficient for the three companies and interpret these values
The beta coefficient of the company shows the changes in the share price of the company as
compared to the changes in the share price value of the FTSE UAE Index (WIUAE.L). This
shows the frequency of the changes in the share price of the company with the changes in the
FTSE UAE Index (WIUAE.L) (Ehrhardt, and Brigham, 2016).

Air Arabia Company
The computation of the beta Coefficient of Air Arabia Company has been given as below
(Haxholli, 2015).
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.220342932
R Square 0.048551008
Adjusted R Square 0.040487881
Standard Error 0.047196873
Observations 120
ANOVA
df
SS
MS
F
Significance F
Regression 1 0.013412854 0.013412854 6.021362125 0.015594434
Residual 118 0.262850292 0.002227545
Total 119 0.276263146
Coeffici
ents
Standard
Error t Stat P-value
Lower
95%
Upper
95%
Lower
95.0%
Upper
95.0%
Interce
pt
0.00362
8461
0.004310
102
0.84185
0412
0.40157
4621
-
0.00490
6714
0.01216
3636
-
0.00490
6714
0.01216
3636
X
Variabl
e 1
0.13386
2001
0.054551
907
2.45384
6394
0.01559
4434
0.02583
4373
0.24188
9629
0.02583
4373
0.24188
9629