Boubyan Bank, the second Islamic bank in Kuwait, has been trading heavily this year. It has been an acquisition prey for quite a while, which resulted in a huge shift in ownership and management. Although I am optimistic about the bank’s new owners and management, I think the stock is overbought. Looking at the current P/B multiples, the bank is currently trading at a P/B multiple of 6.6x. This is relatively higher than the Kuwaiti and GCC multiples of 2.3x and 1.8x respectively. Moreover, below is Boubyan’s P/B band, which shows that the bank’s P/B multiple average for the past two years was 4.02x. I would recommend to sell the stock at the current levels of 540 fils.
(2 votes, average: 4.00 out of 5)
Loading ...Tags: Boubyan Bank, Kuwait, Kuwait Stock Exchange, nbk
I creasted a screen of bank stocks around the world, and found that Boubyan is one of the top ten most expensive bank stock in the world, according to its P/BV.
[Reply]
Naser do you think that people are overly optimistic about the potential improvements in the bank due to NBK’s increasing ownership?
If this factor is what’s causing it to be overvalued, what would cause a correction?
[Reply]