UAE banks seen lower on Moody's report

Banking stocks in the United Arab Emirates could come under selling pressure on Tuesday after ratings agency Moody's said it was maintaining a negative outlook for UAE banks.Uncertainty still surrounds the levels of exposures of local banks in the UAE to debt-laden firms, particularly in Dubai where several state-linked firms are negotiating restructurings with banks.

"Overall, the operating environment remains difficult, with low economic growth and investment, weak demand for loans, as well as investor confidence issues which are curtailing the banks' ability to access low cost, wholesale funding," says John Tofarides at Moody's.Some traders say though that the negative outlook for UAE banks is already priced in."This is already embedded in the current stock prices," says Hassan El Saleh, deputy head of institutional sales at Al Ramz Securities."You might have some sellers come in, however bank stocks are already beat up, and are trading at lower multiples compared to their GCC peers."Regional bourses may track global developments, especially stemming from renewed concerns over the credit environment in the Eurozone after Moody's downgraded Greece to junk status on Monday.