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Choosing Valuation Models in the UAE

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ICT for a Better Life and a Better World

Part of the book series: Lecture Notes in Information Systems and Organisation ((LNISO,volume 30))

Abstract

This study aims to empirically examine the valuation models used by UAE investment analysts. A questionnaire and interviews were used to answer its research questions. Thirty-five investment analysts, in cooperation with the CFA Society Emirates, participated in the questionnaire. The sample covered most of the analysts who have professional qualifications such as CFA and CAIA (coupled with an academic degree such as the MBA) and have an average of more than eight years of experience in the relevant sectors. Descriptive and comparative analysis was employed in this study. The results reveal that discounted cash flow and P/E ratios are the most preferred valuation methods used by these analysts. For the accounting variables used in this study, the analysts perceived free cash flow and operating cash flow to be the most important variables. The results also show that the analysts perceive the solvency ratios (i.e., gearing ratio and interest cover) and liquidity ratio to be the most important ratios. The study concludes that the analysts in the UAE use both sophisticated valuation models and unsophisticated valuations models, with a preference for cash flow models.

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Author information

Authors and Affiliations

  1. United Arab Emirates University, Al Ain, UAE

    Khaled Aljifri

  2. New York Institute of Technology, Abu Dhabi, UAE

    Hafiz Imtiaz Ahmad

Authors
  1. Khaled Aljifri
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  2. Hafiz Imtiaz Ahmad
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Correspondence to Hafiz Imtiaz Ahmad .

Editor information

Editors and Affiliations

  1. Department of Computer Science, Sultan Qaboos University, Muscat, Oman

    Youcef Baghdadi

  2. Business Department, Paris Nanterre University, Nanterre, France

    Antoine Harfouche

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Aljifri, K., Ahmad, H.I. (2019). Choosing Valuation Models in the UAE. In: Baghdadi, Y., Harfouche, A. (eds) ICT for a Better Life and a Better World. Lecture Notes in Information Systems and Organisation, vol 30. Springer, Cham. https://doi.org/10.1007/978-3-030-10737-6_13

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