QNBFS Daily Market Report July 11, 2016

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1. Page 1 of 6 QSE Intra-Day Movement Qatar Commentary The QSE Index declined 0.2% to close at 9,964.3. Losses were led by Insurance and Real Estate indices, falling 1.1%…
  • 1. Page 1 of 6 QSE Intra-Day Movement Qatar Commentary The QSE Index declined 0.2% to close at 9,964.3. Losses were led by Insurance and Real Estate indices, falling 1.1% and 0.5%, respectively. Top losers were Zad Holding Co. and Doha Insurance Co., falling 9.2% and 2.5%, respectively. Among the top gainers, Islamic Holding Group rose 9.9%, while Mannai Corp. was up 5.1%. GCC Commentary Saudi Arabia: The TASI Index rose 0.9% to close at 6,555.9. Gains were led by the Real Estate Dev. and Hotel & Tourism indices, rising 2.6% and 2.4%, respectively. Med. & Gulf Ins. rose 9.8%, while Malath Coop. Ins. & Reinsurance was up 9.4%. Dubai: The DFM Index gained 0.4% to close at 3,385.3. The Telecommunication index rose 1.4%, while the Transportation index gained 1.2%. Arabtec Holding rose 5.6%, while Marka was up 4.4%. Abu Dhabi: The ADX benchmark index fell 0.2% to close at 4,568.0. The Industrial index declined 2.0%, while the Energy index fell 0.7%. Arkan Building Materials Co. declined 10.0%, while Abu Dhabi Islamic Bank was down 2.3%. Kuwait: The KSE Index declined 0.2% to close at 5,380.9. The Telecommunication index fell 1.9%, while the Oil & Gas index declined 1.7%. Gulf Glass Manufacturing Co. fell 8.9%, while Nat. Mobile Telecommunications Co. was down 6.7%. Oman: The MSM Index rose 0.1% to close at 5,816.3. The Services index gained 0.2%, while the Industrial index rose marginally. Construction Materials Ind. rose 3.2%, while Al Jazeera Steel Products was up 2.2%. Bahrain: The BHB Index gained 0.9% to close at 1,152.5. The Industrial index rose 3.2%, while the Commercial Bank index gained 1.3%. National Bank of Bahrain rose 5.4%, while Aluminium Bahrain Co. was up 3.3%. QSE Top Gainers Close* 1D% Vol. ‘000 YTD% Islamic Holding Group 69.00 9.9 167.9 (12.3) Mannai Corp. 89.90 5.1 0.3 (5.7) Qatari Investors Group 48.50 4.5 49.2 28.6 Ahli Bank 41.50 3.8 0.5 (5.4) Qatar Oman Investment Co. 11.22 2.9 71.0 (8.8) QSE Top Volume Trades Close* 1D% Vol. ‘000 YTD% Gulf Warehousing Co. 58.50 0.9 202.7 2.8 Ezdan Holding Group 18.25 (0.8) 168.1 14.8 Islamic Holding Group 69.00 9.9 167.9 (12.3) Vodafone Qatar 10.69 0.2 137.2 (15.8) Qatar Electricity & Water Co. 213.00 1.0 120.7 (1.6) Market Indicators 05 July 16 04 July 16 %Chg. Value Traded (QR mn) 100.3 106.4 (5.7) Exch. Market Cap. (QR mn) 537,551.4 536,805.8 0.1 Volume (mn) 1.9 2.3 (17.0) Number of Transactions 1,547 1,767 (12.5) Companies Traded 41 39 5.1 Market Breadth 28:11 27:10 – Market Indices Close 1D% WTD% YTD% TTM P/E Total Return 16,121.51 (0.2) 0.8 (0.6) 13.5 All Share Index 2,775.10 0.1 0.9 (0.1) 13.1 Banks 2,690.53 0.4 0.9 (4.1) 11.4 Industrials 3,062.36 0.3 1.3 (3.9) 14.1 Transportation 2,482.97 0.5 0.5 2.1 11.5 Real Estate 2,526.36 (0.5) 1.5 8.3 20.7 Insurance 3,976.01 (1.1) (2.3) (1.4) 10.3 Telecoms 1,111.10 0.3 1.0 12.6 17.6 Consumer 6,512.86 0.1 1.6 8.5 13.4 Al Rayan Islamic Index 3,866.00 0.1 1.1 0.3 16.4 GCC Top Gainers## Exchange Close# 1D% Vol. ‘000 YTD% Med. & Gulf Ins. Saudi Arabia 23.15 9.8 2,826.2 (16.8) Dar Al Arkan Real Estate Saudi Arabia 7.06 9.0 140,910.9 13.9 Arriyadh Develop. Co. Saudi Arabia 21.53 6.0 1,347.9 17.5 Arabtec Holding Co. Dubai 1.51 5.6 84,049.5 20.8 Abu Dhabi Nat. Hotels Abu Dhabi 3.75 4.2 1.8 29.3 GCC Top Losers## Exchange Close# 1D% Vol. ‘000 YTD% Nat. Mobile Telecom. Kuwait 1.12 (6.7) 2.2 1.8 Combined Group Kuwait 0.68 (2.9) 0.5 (5.3) Aviation Lease & Fin. Kuwait 0.21 (2.8) 42.2 (1.9) Arab National Bank Saudi Arabia 18.87 (2.5) 72.6 (19.9) Abu Dhabi Islamic Bank Abu Dhabi 3.77 (2.3) 858.3 (4.3) Source: Bloomberg (# in Local Currency) (## GCC Top gainers/losers derived from the Bloomberg GCC 200 Index comprising of the top 200 regional equities based on market capitalization and liquidity) QSE Top Losers Close* 1D% Vol. ‘000 YTD% Zad Holding Co. 82.10 (9.2) 0.1 (3.2) Doha Insurance Co. 19.50 (2.5) 0.1 (7.1) Industries Qatar 98.20 (1.5) 20.9 (11.6) Qatar Insurance Co. 72.40 (1.4) 13.6 4.1 Commercial Bank 37.05 (1.2) 22.9 (19.3) QSE Top Value Trades Close* 1D% Val. ‘000 YTD% Qatar Electricity & Water Co. 213.00 1.0 26,411.4 (1.6) Gulf Warehousing Co. 58.50 0.9 11,884.1 2.8 Islamic Holding Group 69.00 9.9 11,321.5 (12.3) QNB Group 141.70 0.8 8,286.1 (2.8) Qatar Fuel 154.60 (0.2) 6,934.6 13.2 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*# 9,964.26 (0.2) 0.8 0.8 (4.5) 27.54 147,665.4 13.5 1.5 4.1 Dubai 3,385.29 0.4 0.4 2.2 7.4 105.09 90,012.3 1.2 4.1 11.4 Abu Dhabi 4,568.00 (0.2) (0.2) 1.6 6.1 28.30 121,329.2 1.5 5.3 12.1 Saudi Arabia 6,555.87 0.9 0.9 0.9 (5.1) 779.52 402,942.2 1.5 3.7 15.1 Kuwait 5,380.86 (0.2) (0.2) 0.3 (4.2) 13.65 79,907.4 1.0 4.4 17.8 Oman 5,816.26 0.1 0.1 0.7 7.6 5.43 23,110.0 1.3 4.4 11.1 Bahrain# 1,152.49 0.9 3.1 3.1 (5.2) 1.88 17,846.4 9.6 0.4 4.7 Source: Bloomberg, Qatar Stock Exchange, Tadawul, Muscat Securities Exchange, DFM and Zawya (** TTM; * Value traded ($ mn) do not include special trades, if any; #Data as of July 05, 2016) 9,920 9,940 9,960 9,980 10,000 10,020 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 declined 0.2% to close at 9,964.3. The Insurance and Real Estate indices led the losses. The index fell on the back of selling pressure from Qatari shareholders despite buying support from non-Qatari and GCC shareholders.  Zad Holding Co. and Doha Insurance Co. were the top losers, falling 9.2% and 2.5%, respectively. Among the top gainers, Islamic Holding Group rose 9.9%, while Mannai Corp. was up 5.1%.  Volume of shares traded on Tuesday fell by 17.0% to 1.9mn from 2.3mn on Monday. Further, as compared to the 30-day moving average of 3.9mn, volume for the day was 50.8% lower. Gulf Warehousing Co. and Ezdan Holding Group were the most active stocks, contributing 10.6% and 8.8% to the total volume, respectively. Source: Qatar Stock Exchange (* as a % of traded value) Ratings, Earnings Releases and Earnings Calendar Ratings Updates Company Agency Market Type* Old Rating New Rating Rating Change Outlook Outlook Change Bahrain Telecom. Co. Fitch Bahrain LTFC-IDR/LTLC- IDR/STFC-IDR BBB-/BBB/F3 BB+/BB+/B  Stable – Source: News reports (* LT – Long Term, ST – Short Term, FC – Foreign Currency, LC – Local Currency, IDR – Issuer Default Rating, SR – Support Rating, LC – Local Currency) Earnings Releases Company Market Currency Revenue (mn) 2Q2016 % Change YoY Operating Profit (mn) 2Q2016 % Change YoY Net Profit (mn) 2Q2016 % Change YoY Salalah Port Services Oman OMR 28.0 11.4% – NA 2.7 0.6% Source: Company data, DFM, ADX, MSM Earnings Calendar Tickers Company Name Date of reporting 2Q2016 results No. of days remaining Status QNBK QNB Group 12-Jul-16 1 Due QEWS Qatar Electricity & Water Company 13-Jul-16 2 Due QGTS Qatar Gas Transport Company (Nakilat) 13-Jul-16 2 Due UDCD United Development Company 18-Jul-16 7 Due QIBK Qatar Islamic Bank 18-Jul-16 7 Due QATI Qatar Insurance Company 19-Jul-16 8 Due QIIK Qatar International Islamic Bank 19-Jul-16 8 Due MARK Masraf Al Rayan 19-Jul-16 8 Due IHGS Islamic Holding Group 19-Jul-16 8 Due CBQK Commercial Bank 19-Jul-16 8 Due DHBK Doha Bank 20-Jul-16 9 Due KCBK Al Khaliji 20-Jul-16 9 Due ABQK Al Ahli Bank 20-Jul-16 9 Due NLCS National Leasing (Alijarah) 21-Jul-16 10 Due ORDS Ooredoo 26-Jul-16 15 Due VFQS Vodafone Qatar 26-Jul-16 15 Due QIMD Qatar Industrial Manufacturing Company 26-Jul-16 15 Due ERES Ezdan Real Estate Company 27-Jul-16 16 Due AKHI Al Khaleej Takaful Insurance 2-Aug-16 22 Due QISI Qatar Islamic Insurance 10-Aug-16 30 Due Source: QSE Overall Activity Buy %* Sell %* Net (QR) Qatari Individuals 45.21% 31.51% 13,735,717.32 Qatari Institutions 5.53% 22.66% (17,173,143.02) Qatari 50.74% 54.17% (3,437,425.70) GCC Individuals 0.79% 0.34% 457,921.24 GCC Institutions 0.78% 0.25% 529,531.20 GCC 1.57% 0.59% 987,452.44 Non-Qatari Individuals 12.68% 13.65% (965,949.77) Non-Qatari Institutions 35.01% 31.60% 3,415,923.03 Non-Qatari 47.69% 45.25% 2,449,973.26
  • 3. Page 3 of 6 News Qatar  CBQK to disclose financial statements on July 19 – Commercial Bank (CBQK) will disclose the financial statements for the period ending June 30, 2016 on July 19, 2016. (QSE)  Saudi cement export ban lift to ease Qatar’s demand – Saudi Arabia’s decision to lift the export ban on cement may help meet Qatar’s growing appetite for the primary material. Qatar, which has lined-up multi-billion dollar construction projects in the run- up to the 2022 FIFA World Cup, is a major importer of Saudi cement. Official data suggest that the peak demand for cement from Qatar’s thriving construction and infrastructure industries is expected to reach 57mn tons by 2017. The Saudi government had imposed a ban on cement exports in 2008 to push prices down and accommodate demand from large government-funded infrastructure projects, although some companies were allowed to export at prices lower than those in the local market. (Peninsula Qatar)  Qatar among world’s most network ready nations – Qatar is among the most networked ready nations in the world as it is ranked 27th in the world and second among the Arab nations in the Networked Readiness Index (NRI) of the Global Information and Technology Report 2016. The NRI ranked 139 developed and developing countries. The report was released recently by World Economic Forum, in partnership with INSEAD and Cornell University. Qatar has maintained the same ranking in the previous edition of the index released in 2015. The report revealed that “The UAE (26th) and Qatar (27th) continue to lead the Arab world in networked- readiness”. Bahrain is ranked 28, followed by Saudi Arabia (33), Oman (52) and Kuwait (61). The index found Singapore as the highest-placed country in the world in terms of networked readiness. The report measures the drivers of the ICT (Information, Communication and Technology) revolution globally, using the NRI. The index assesses the state of networked readiness using 53 indicators. For each of the 139 economies, it allowed the identification of priority areas to more fully leverage ICTs for socio-economic development. (Peninsula Qatar)  BMI: Tourist arrivals to cross 3mn in 2016 – According to a report released by BMI Research, national initiatives to enhance tourism flows into Qatar are showing positive results with inbound arrivals expected to reach 3.1mn in 2016, a 7.2% leap from 2015. BMI, in a recent report, revealed that the growth will remain strong until 2020, when inbound arrivals are expected to reach 4mn. Qatar’s total inbound tourism is expected to rise by 5.4% over 2016. Besides increasing the ability and tourism demand for the country, there has also been work done to make it easier to enter and visitors from some 33 countries are now eligible for a tourist visa upon arrival. The government has taken initiatives to increase travel from the Asia Pacific market by decreasing bureaucracy, such as in Taiwan where travelers can now apply for visas online. Work within the Gulf Cooperation Council (GCC) has also led to a Gulf-wide visa that allows for a Schengen style travel within participating countries, making travel within the region much easier and more convenient. BMI said that the continued inbound arrival is expected to spur international tourism receipts for Qatar, which is expected to reach around $11.9bn by 2020. BMI also added that Qatar is expected to witness continued growth in the hotels’ segment as international and domestic groups focus on the region and the value of the domestic hotels and restaurants industry will continue to rise over 2016, reaching $1.6bn - a 5.4% YoY rise. BMI said that this will rise to $2.2bn by 2020. (Gulf- Times.com)  QEERI: Solar energy to meet 20% of Qatar's energy demand by 2030 – Qatar Environment and Energy Research Institute (QEERI), acting Executive Director Dr Khalid al-Subai said that Qatar could focus more on the implementation of rooftop solar solutions to address the electricity demand, especially during the peak season. He said, “One area where the implementation of solar technologies could accelerate rapidly is that of rooftop solar (solutions)”. Al- Subai explained that in Qatar, "solar intensity and cooling demand track very closely", especially during the summer months. "Thus, rooftop solar could become very cost-effective in lowering peak electricity demand, which is very important to Qatar’s utilities". He further added that "Dubai recently committed to a target of 100% rooftop solar (solutions) by 2030, and other states within the GCC could well follow Dubai’s lead.” (Gulf-Times.com)  Qatar firm calls for best practices in waste management – Raw Middle East, a local firm specializing in the production of natural juice drinks, has underscored the need for more companies in Qatar to maintain best practices in waste management, especially recycling. Citing the availability of a range of incentive programs for eco-friendly practices in the US or the UK, Raw Middle East founder Layla al-Dorani noted that companies in Qatar should “do their part” in preserving the environment. She said Raw Middle East, which produces 100% natural fruit and vegetable juices, does not only practice recycling but encourages customers to recycle by returning the company’s plastic bottles. As an incentive, al-Dorani said customers get QR1 off on their next order for every bottle returned. Aside from plastic bottles, Raw Middle East also uses tote delivery bags that are also recyclable. (Gulf-Time.com) International  US economy posts largest job gains in eight months in June – The US Labor Department said that the country’s job growth surged in June as manufacturers and other employers boosted hiring, confirming the economy has regained speed after 1Q2016 lull, but tepid wages suggested the Federal Reserve will probably not raise interest rates soon. Nonfarm payrolls increased by 287,000 jobs last month, the largest gain since last October. May payrolls were revised sharply down to show them rising 11,000 rather than the previously reported 38,000. The sign of strength in the economy, however, precedes Britain's stunning vote last month to leave the European Union. The Brexit referendum on June 23 roiled financial markets, raising fears that sustained volatility might hit companies' hiring and investment decisions. (Reuters)  UK goods trade deficit narrower than forecast in May – Britain's goods trade deficit was much smaller than expected in May after heavy downward revisions to the previous month's deficit, suggesting some improvement in Britain's trade position was underway before last month's vote to leave the European Union. Since the referendum, sterling has fallen more than 10% on a trade-weighted basis GBP and it hit its lowest against the US dollar since 1985. This is likely to lead to the trade deficit widening over the next few months, as the cost of imports surges, but may help it to narrow in the longer term if a cheaper domestic cost base allows British firms to find new markets abroad. The Office for National Statistics said Britain's deficit in goods alone stood at £9.879bn versus economists' forecasts of £10.65bn. This represented a slight widening from April's reading of a deficit of £9.414bn, which was £1.1bn smaller than previously reported. (Reuters)  BOE considers curbs on property funds – According to sources, the Bank of England (BOE) is considering curbs on withdrawals from property investment funds after Britain's vote to leave the European Union roiled the sector. The sources said it understood that the BOE was considering "enforced notice periods before redemptions, slashing the price for investors who rush to the door or additional liquidity requirements for funds". (Reuters)
  • 4. Page 4 of 6  IMF cuts Eurozone growth outlook on 'Brexit,' warns it may get worse – The International Monetary Fund (IMF) cut its Eurozone growth outlook for the next two years over uncertainties sparked by Britain's vote to leave the European Union, and warned that the conditions could worsen if confusion continues to reign in financial markets. The IMF said that it now expects 2016 growth of 1.6%, down from the previous forecast of 1.7%, while the 2017 growth forecast will drop to 1.4% from 1.7% previously. In its annual policy review of the 19-country bloc, the IMF said a further global growth slowdown could derail the Eurozone's domestic demand- led recovery, and further Brexit spillovers, the refugee surge, increased security concerns and banking weakness all could take their toll on growth. However, IMF European Department Deputy Director Mahmood Pradhan said that if the separation negotiations drag out between the EU and the UK and continue to cause risk reductions in financial markets, Eurozone growth would slow further. (Reuters)  China's soft inflation, grim global outlook point to more stimulus – Soft Chinese inflation and G20 concerns that the global recovery remains grim are hardening views among some economists that more government stimulus will be needed to support China. The country’s consumer inflation last month remained under the official target of around 3% for 2016, indicating persistently weak domestic demand. China's National Bureau of Statistics said that the country’s consumer price index (CPI) rose by 1.9% YoY in June, compared with a 2.0% increase in May, Analysts had expected a 1.8% gain. Against that backdrop of slack price growth, international trade remains weak and the country is plagued by massive overcapacity, particularly in coal and steel, and debt- ridden zombie companies. Externally, China faces a global recovery that its trade minister described as "complicated and grim". (Reuters)  G20 seeks to enhance trade growth in face of protectionism – China's Commerce Minister Gao Hucheng said that in the face of a "worrying" rise in protectionism, trade ministers from the world's major economies have agreed to cut trade costs, increase policy coordination and enhance financing. The Group of 20 trade ministers approved a broad trade growth strategy aimed at reversing a slowing in global trade, and backed guiding principles for global investment policymaking. The minister added that the global recovery continues, but it remains uneven and falls short of the country’s ambition for strong, sustainable and balanced growth. Downside risks and vulnerabilities persist. (Reuters) Regional  IATA: Middle East carriers’ passenger traffic rise 11.8% – According to International Air Transport Association (IATA), Middle East- based carriers witnessed an 11.8% YoY rise in demand in May, which was the largest increase in the region. The capacity increased 15.6% and the load factor dropped 2.4% to 71.9%. The growth in capacity has now exceeded traffic growth in 18 of the past 20 months. (GulfBase.com)  MENA medical technology sector expected to grow to $11bn by 2021 – The medical technology (MedTech) industry in Middle East and North Africa (MENA) region is growing at a steady pace of 5% annually, and is set to play an important role in improving healthcare facilities in the region by offering latest devices to diagnose, monitor and treat almost every disease. The annual value of the MENA MedTech market is currently worth $7bn and is expected to grow to $11bn by 2021. (GulfBase.com)  GCC sovereigns active in debt market in 2016 – Global bond issues were more than $2.28tn in 2016 with major issues coming from European Investment bank $50.48bn and the Federal Bank of Germany $43.33bn. In the 1H2015, it was more than $1.626bn and in 2015 it was $3.741tn. The yields on US government bonds had touched new lows on July 8, the latest records set during the 2016 rally in sovereign debt, as inve
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