QNBFS Daily Market Report December 11, 2017

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1. Page 1 of 6 QSE Intra-Day Movement Qatar Commentary The QSE Index rose 0.7% to close at 7,827.7. Gains were led by the Real Estate and Industrials indices, gaining…
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  • 1. Page 1 of 6 QSE Intra-Day Movement Qatar Commentary The QSE Index rose 0.7% to close at 7,827.7. Gains were led by the Real Estate and Industrials indices, gaining 2.4% and 1.2%, respectively. Top gainers were Qatari Investors Group and Medicare Group, rising 8.0% and 4.5%, respectively. Among the top losers, Qatar General Insurance & Reinsurance Company fell 10.0%, while Zad Holding Company was down 7.2%. GCC Commentary Saudi Arabia: The TASI Index rose 0.8% to close at 7,144.7. Gains were led by the Real Estate Mgmt. and Capital Goods indices, rising 3.6% and 3.4%, respectively. Dar Alarkan Real Estate Dev rose 9.0%, while Saudi Arabian Amiantit was up 8.9%. Dubai: The DFM Index gained 0.1% to close at 3,395.4. The Real Estate and Construction index rose 0.6%, while the Insurance index gained 0.3%. SHUAA Capital rose 7.4%, while DAMAC Properties Dubai Co. was up 2.4%. Abu Dhabi: The ADX benchmark index rose 0.4% to close at 4,294.9. The Energy index gained 4.2%, while the Investment & Financial Services index rose 2.1%. Foodco Holding gained 14.9%, while Commercial Bank International was up 14.3%. Kuwait: The KSE Index declined 0.4% to close at 6,162.4. The Insurance index fell 2.1%, while the Technology index declined 1.6%. Wethaq Takaful Insurance Company fell 9.3%, while Warba Insurance Company was down 9.0%. Oman: The MSM Index fell 0.1% to close at 5,062.6. Losses were led by the Industrial and Services indices, falling 0.1% each. Alizz Islamic Bank fell 3.0%, while Sohar Power was down 2.6%. Bahrain: The BHB Index fell 0.2% to close at 1,265.4. The Commercial Bank index declined 0.8%, while the other indices ended flat or in green. Ahli United Bank declined 1.5%, while Seef Properties was down 1.0%. QSE Top Gainers Close* 1D% Vol. ‘000 YTD% Qatari Investors Group 32.50 8.0 134.4 (44.4) Medicare Group 58.00 4.5 73.5 (7.8) Gulf International Services 16.97 4.4 330.2 (45.4) Widam Food Co. 58.99 3.5 40.2 (13.3) Ezdan Holding Group 9.51 3.3 502.4 (37.1) QSE Top Volume Trades Close* 1D% Vol. ‘000 YTD% Investment Holding Group 5.16 (1.0) 1,086.8 (48.4) Mesaieed Petrochemical Holding 11.85 0.6 690.4 (25.0) Ezdan Holding Group 9.51 3.3 502.4 (37.1) Vodafone Qatar 6.95 2.2 362.4 (25.8) United Development Co. 12.70 (0.5) 361.0 (38.5) Market Indicators 10 Dec 17 07 Dec 17 %Chg. Value Traded (QR mn) 108.1 180.0 (39.9) Exch. Market Cap. (QR mn) 428,742.7 425,611.7 0.7 Volume (mn) 5.9 9.0 (34.7) Number of Transactions 2,637 3,416 (22.8) Companies Traded 43 42 2.4 Market Breadth 29:12 23:18 – Market Indices Close 1D% WTD% YTD% TTM P/E Total Return 13,126.61 0.7 0.7 (22.3) 12.5 All Share Index 2,210.34 0.8 0.8 (23.0) 12.3 Banks 2,495.59 0.5 0.5 (14.3) 12.8 Industrials 2,393.62 1.2 1.2 (27.6) 15.9 Transportation 1,582.73 0.8 0.8 (37.9) 11.8 Real Estate 1,579.42 2.4 2.4 (29.6) 10.9 Insurance 3,036.06 (0.5) (0.5) (31.5) 20.4 Telecoms 976.19 (0.7) (0.7) (19.1) 18.1 Consumer 4,481.90 0.5 0.5 (24.0) 10.8 Al Rayan Islamic Index 3,070.47 1.3 1.3 (20.9) 13.8 GCC Top Gainers ## Exchange Close # 1D% Vol. ‘000 YTD% Dar Al Arkan Real Estate Saudi Arabia 13.99 9.0 77,965.7 127.1 Saudi Kayan Petrochem. Saudi Arabia 10.66 6.4 52,528.3 20.6 Mobile Telecom. Co. Saudi Arabia 7.47 5.8 9,454.2 (9.9) Bank Al-Jazira Saudi Arabia 12.94 4.9 2,739.3 18.5 Jabal Omar Dev. Co. Saudi Arabia 62.31 4.1 1,776.4 (16.6) GCC Top Losers ## Exchange Close # 1D% Vol. ‘000 YTD% Mabanee Co. Kuwait 0.71 (2.1) 649.3 (12.5) Saudia Dairy & Foodstuff Saudi Arabia 125.10 (1.7) 46.8 0.4 Ahli United Bank Bahrain 0.66 (1.5) 55.0 13.4 Emirates Int. Telecom. Dubai 4.90 (1.4) 692.2 (21.0) Dubai Investments Dubai 2.30 (1.3) 9,045.0 1.5 Source: Bloomberg (# in Local Currency) (## GCC Top gainers/losers derived from the S&P GCC Composite Large Mid Cap Index) QSE Top Losers Close* 1D% Vol. ‘000 YTD% Qatar General Ins. & Reins. Co. 44.11 (10.0) 27.8 (6.1) Zad Holding Co. 71.00 (7.2) 1.1 (20.4) Al Khalij Commercial Bank 11.70 (2.5) 23.6 (31.2) Dlala Brokerage & Inv. Holding Co 14.61 (1.2) 55.6 (32.0) Ooredoo 81.01 (1.2) 84.3 (20.4) QSE Top Value Trades Close* 1D% Val. ‘000 YTD% Masraf Al Rayan 34.21 0.6 11,291.5 (9.0) Qatar Navigation 53.50 1.7 8,963.1 (44.0) Mesaieed Petrochemical Holding 11.85 0.6 8,231.1 (25.0) Ooredoo 81.01 (1.2) 6,879.2 (20.4) Industries Qatar 89.29 0.9 5,981.7 (24.0) Source: Bloomberg (* in QR) Regional Indices Close 1D% WTD% MTD% YTD% Exch. Val. Traded ($ mn) Exchange Mkt. Cap. ($ mn) P/E** P/B** Dividend Yield Qatar* 7,827.71 0.7 0.7 1.5 (25.0) 29.22 117,775.6 12.5 1.2 5.0 Dubai 3,395.39 0.1 0.1 (0.7) (3.8) 118.28 103,720.4 21.5 1.2 4.2 Abu Dhabi 4,294.87 0.4 0.4 0.3 (5.5) 37.43 112,026.6 15.4 1.3 4.7 Saudi Arabia 7,144.74 0.8 0.8 2.0 (0.9) 1,390.25 449,128.7 16.8 1.6 3.4 Kuwait 6,162.35 (0.4) (0.4) (0.6) 7.2 17.31 89,553.5 14.8 1.0 5.6 Oman 5,062.61 (0.1) (0.1) (0.9) (12.5) 2.91 21,016.5 12.2 1.0 5.2 Bahrain 1,265.44 (0.2) (0.2) (1.4) 3.7 2.74 19,927.0 7.0 0.8 6.2 Source: Bloomberg, Qatar Stock Exchange, Tadawul, Muscat Securities Market and Dubai Financial Market (** TTM; * Value traded ($ mn) do not include special trades, if any) 7,750 7,800 7,850 7,900 7,950 9:30 10:00 10:30 11:00 11:30 12:00 12:30 13:00
  • 2. Page 2 of 6 Qatar Market Commentary  The QSE Index rose 0.7% to close at 7,827.7. The Real Estate and Industrials indices led the gains. The index rose on the back of buying support from Qatari shareholders despite selling pressure from GCC and non-Qatari shareholders.  Qatari Investors Group and Medicare Group were the top gainers, rising 8.0% and 4.5%, respectively. Among the top losers, Qatar General Insurance & Reinsurance Company fell 10.0%, while Zad Holding Company was down 7.2%.  Volume of shares traded on Sunday fell by 34.7% to 5.9mn from 9.0mn on Thursday. Further, as compared to the 30-day moving average of 8.1mn, volume for the day was 27.5% lower. Investment Holding Group and Mesaieed Petrochemical Holding Company were the most active stocks, contributing 18.5% and 11.7% to the total volume, respectively. Source: Qatar Stock Exchange (* as a % of traded value) News Qatar  Hamad Port set to handle rising global cargo – Hamad Port is all set to handle increasing volumes of global cargo, according to QTerminals’ CEO, Neville Bissett, the operator of the first phase of the port. Neville Bissett said, “We have a robust growth strategy in place to ensure that we continue to expand our business. There is significant room for growth and innovation.” More than 16% of the world’s container traffic flows between Europe and Asia, allowing the GCC ports to capitalize on the thriving global shipping business, a study by A T Kearney stated, adding demand for international trade coupled with the existing global ports network is another factor in the Gulf’s marine transport boom. Highlighting that many main line operators have evinced interest in starting direct services to Hamad Port, while others have already started or are expanding their existing routes; Neville Bissett said the new routes include additional services from China, the Far East and Bangladesh as well as enhancement of services from established routes including India, Pakistan, Oman, and the Mediterranean. The sectors that are currently contributing most to volume are machinery, technical and construction material, large electrical goods, vehicles, and electronic equipment, he said, adding Qatar’s major trade partners include China, India, the US, Europe and Japan. (Gulf-Times.com)  The US tax reforms to add value to Qatar investments – The US federal tax reform is expected to add value to Qatar’s investments in the US. Qatar has significant exposure to various asset classes, which are expected to benefit from the sweeping tax overhaul, according to Qatar-based investment strategists. The tax bill passed by republicans in the US Senate is expected to boost profits of corporate. The centerpiece of the existing legislation is a reduction in the corporate income tax rate to 20% from the current 35%. Qatar’s sovereign wealth fund and some family businesses are largely exposed to the US investment industry. Back in 2015, Qatar Investment Authority (QIA) had committed $45bn investment in the US. Recently, QIA announced that it had deployed more than 50% of its committed fund. In the real estate sector, QIA has prioritized its investments. It has also exposure to the US industry, alternative energy and technology. According to information available on public domain, QIA has also extended its portfolio to health sector. Drug and biotechnology companies would be among those benefiting largely from paying a reduced tax rate. (Peninsula Qatar)  Ashghal plans to implement major projects in 2018-22 – Ashghal will implement infrastructure projects to serve owners of approximately 32,855 land plots spread over 14 areas across the country in the four-year period between 2018 and 2022. Out of this, 24,284 are in the existing areas and 8,571 are in newly developed land plots. According to a statement from Ashghal, the works will be done in line with the vision of HH the Emir Sheikh Tamim Bin Hamad Al Thani and under the directives of HE the Prime Minister and Interior Minister Sheikh Abdullah Bin Nasser Bin Khalifa Al Thani. Ashghal is currently implementing infrastructure projects to serve more than 22,000 land plots spread over 18 areas, of which 20,637 plots are in the existing areas and 1,829 are in the newly developed areas. Ashghal is expected to complete 23 projects to develop infrastructure in various areas before the end of this year, serving approximately 15,108 citizens land plots of which 1,800 are in the newly developed areas. (Gulf-Times.com)  Interest in Islamic finance growing, says QCB’s Governor – The Islamic finance industry has grown considerably over the past decade to become one of the fastest growing financial systems, according to HE the Qatar Central Bank’s (QCB) Governor, Sheikh Abdullah Bin Saoud Al Thani. By contrast, other conventional banking systems have been challenged significantly by the global financial crisis, he said in his remarks at the at the Islamic Finance, Fintech and Cryptocurrencies roundtable at the Hamad Bin Khalifa University (HBKU). Sheikh Abdullah said this becomes evident with growing interest in the various investment opportunities available within the Islamic finance industry, prompting many traditional banks, including those in non-Islamic countries, to diversify their offerings and integrate Islamic financial services, with the ultimate aim of expanding their client base. (Gulf-Times.com)  QCSD makes major strides in November – Qatar Central Securities Depository (QCSD) outlined the most significant achievements during November, mainly in the safekeeping, management, ownership, clearing and settlement of securities and other financial instruments. QCSD provided related Overall Activity Buy %* Sell %* Net (QR) Qatari Individuals 46.74% 45.97% 834,185.01 Qatari Institutions 28.47% 28.85% (415,608.40) Qatari 75.21% 74.82% 418,576.61 GCC Individuals 1.09% 0.80% 319,453.99 GCC Institutions 1.16% 1.74% (635,156.00) GCC 2.25% 2.54% (315,702.01) Non-Qatari Individuals 17.40% 15.26% 2,318,507.98 Non-Qatari Institutions 5.14% 7.38% (2,421,382.58) Non-Qatari 22.54% 22.64% (102,874.60)
  • 3. Page 3 of 6 financial services and the transfer of ownership of executed contracts through trading and transfers such as family transfers, inheritances, exceptions, booking and decommissioning operations, mortgage and mortgage decomposition transactions at the request of the relevant parties. The details of a number of shareholder statements were also updated and new shareholders added. (Gulf-Times.com)  Qatar Chamber, Indonesian delegation discusses trade cooperation – Qatar Chamber held a forum with an Indonesian delegation to discuss ways to enhance trade cooperation ties of both their countries. Indonesian Chamber of Commerce’s Vice- Chairman, Helmy Shebubakar discussed trade cooperation opportunities in the fields of food, furniture, pharmaceuticals, contracting, and construction materials. Qatar Chamber’s board member, Ali Bin Abdullatif Al Misnad said Qatar-Indonesia bilateral trade volume reached QR1.8bn last year. Al Misnad said there are a number of Qatari investments in Indonesia, especially in the communications and banking fields, adding that there are around nine Qatari-Indonesian joint companies that work in the field of contracting, engineering, and Information Technology. (Gulf-Times.com)  Wakrah, Doha witness increase in building permits – Wakrah and Doha witnessed expansion in the new building permits issued in November; even as total permits issued in the country saw a 2% decline MoM. Qatar saw a total of 838 building permits issued in November, the bulk of which were in Al Rayyan, Doha and Wakrah, together constituting more than 66% of the total permits, according to the Ministry of Development Planning and Statistics (MDPS). On geographical basis, the MDPS found that Al Rayyan came at the top of the municipalities where the number of building permits issued were 195 permits or 23% of the total issued permits, followed by Doha 183 permits (22%), Al Wakrah 179 (21%), Al Daayen 136 (16%), Umm Slal 51 (6%), Al Shahaniya 43 (5%), Al Khor 38 (5%), and Al Shamal 13 (2%). On MoM basis, Wakrah witnessed 27% expansion and Doha (7%); whereas Al Shahaniya reported 20% decline, Al Shamal (19%), Al Rayyan (18%), Umm Slal (12%), Al Khor (10%) and Al Daayen (1%). (Gulf-Times.com)  Al Sada leads Qatar delegation to OAPEC meet in Kuwait – Qatar’s delegation to the 99th ministerial meeting of the Organization of Arab Petroleum Exporting Countries (OAPEC) in Kuwait was led by HE the Minister of Energy and Industry, Mohamed Bin Saleh Al Sada. The agenda of the meeting included global oil conditions and environmental and climate- change issues. It also included reports on OAPEC Secretariat activities in various fields, functions organized by the Secretariat, studies and surveys it had conducted, and progress achieved so far in the OAPEC databank. (Gulf-Times.com)  Qatar National Cement Company discloses a lawsuit filed against it – Qatar National Cement Company announced that a lawsuit was filed by the Ministry of Municipality and Environment against the company to demand the payment of the amount of QR68,974,667 for the extraction of raw materials used in the cement industry during the period 2008-2011. As the company does not recognize the said claim since the raw material was extracted from within the concession limits granted to the company by Decree Law No. (4) for the year 1973, and extended by Decree No. (8) for the year 1993; the company has raised this issue to the highest authorities and requested writing off the case at the competent court. (QSE) International  Visa: UK consumers cut spending in run-up to Christmas – Squeezed British consumers reined in Christmas travel plans and bought fewer new cars last month, setting the stage for the first fall in festive spending in five years, credit card company Visa stated. The downbeat message came alongside a cut by the British Chambers of Commerce to its economic outlook for the next two years as the business organization sees inflation rising faster than pay for the next two years. Visa stated inflation- adjusted consumer spending last month was 0.9% lower than in 2016. This was a smaller decline than October’s 2.1% drop, but still enough to make annual falls in spending likely for the first time since 2012 for both the Christmas season and 2017 overall, the company stated. (Reuters)  Britain aims to secure free trade deal with EU after Brexit – Britain is aiming to secure a comprehensive free trade deal with the European Union (EU) and wants it to be signed shortly after it leaves the bloc in 2019, according to Brexit minister David Davis. The EU has been considering a post-Brexit free trade deal with Britain along the lines of one agreed last year with Canada. (Reuters)  Japanese big manufacturers’ mood improves in October- December – Large Japanese manufacturers turned more optimistic about economic conditions in the October-December quarter, a government survey showed, in another upbeat sign for an economy on a record run of growth. The business survey index (BSI) of sentiment at large manufacturers stood at plus 9.7, up from plus 9.4 in July-September, according to the joint survey by the Ministry of Finance and the Economic and Social Research Institute, an arm of the Cabinet Office. Survey shows that big manufacturers plan to raise capital spending by 10.7% in the current half of the fiscal year ending in March, up from their previous projection of 8.9% increase. The BSI measures the percentage of firms that expect the business environment to improve from the previous quarter minus the percentage that expect it to decline. (Reuters) Regional  UBS: GCC’s economic growth to rebound to 2.3% in 2018 – GDP growth for the GCC is expected to rebound to 2.3% next year as countries adjust to a ‘new normal’ of lower oil prices and benefit from a resurgent global economy. Gulf economies are projected to grow by 0.6% this year, according to UBS Wealth Management (UBS). UBS foresees 2018 positive on global equities relative to high-grade and developed world government bonds. Global economic growth should continue at the high 3.8 rate witnessed in 2017. For the six countries that form the GCC, the economic outlook is brightening. Oil prices have recovered since June, but are expected to trend sideways next year. Further reforms are needed to diversify GCC members’ economies and attract foreign investment. (GulfBase.com, Peninsula Qatar)  MEA beauty industry spending to hit $25.4bn over the next five years – The Middle East and Africa (MEA) region is thriving to become the fastest-growing region in beauty and personal care products over the next five years. The MEA’s $25.4bn market
  • 4. Page 4 of 6 will grow by 6.4% a year during this growth spurt. Globally, the sector is expected to grow 3% a year. (GulfBase.com)  Oil cuts can halt if market balances by June – The Organization of Petroleum Exporting Countries (OPEC) and its global allies including Russia may end their production cuts before 2019 if the crude market re-balances by June, Kuwait’s Oil Minister said. Russia is keen to end the output-capping deal as early as possible. OPEC will study an exit strategy from the global cuts accord at its next meeting in June. (Gulf-Times.com)  Significant banking changes in GCC due to tech innovation – FinTech started reshaping the financial services industry globally and within it, the banking sector. A similar trend is being witnessed in the Middle East and North Africa region (MENA), where the pace of FinTech innovation, especially in the GCC, has been rapid over the past couple of years, primarily backed by investors who continue to pour money into regional FinTech firms. The Middle East has amassed more than $100mn in FinTech start-up funding in the past ten years, with 105 FinTech start-ups launching in 2016, with hopes to raise $50mn in funding by the end of 2017. However, this has not hindered the emergence of new players with disruptive technologies as the scope of services and opportunities continue to expand with the changing landscape of the financial services industry. Resultantly, the banking sector in the GCC and the wider MENA started to realize the extent of the threats and opportunities that FinTech possess, and have thus started adopting measures to adjust to the new realities in the current environment. (GulfBase.com)  SABIC set to boost investments in China – Saudi Basic Industries Cooperation (SABIC) signed a memorandum of understating (MoU) to boost its investments in China. SABIC signed the MoU with the Guangzhou Nansha Development Zone Committee of China. The deal is also meant to enhance joint cooperation between the two
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