QNBFS Daily Market Report June 27, 2016

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1. Page 1 of 5 QSE Intra-Day Movement Qatar Commentary The QSE Index declined 1.2% to close at 9,842.9. Losses were led by the Real Estate and Consumer Goods &…
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  • 1. Page 1 of 5 QSE Intra-Day Movement Qatar Commentary The QSE Index declined 1.2% to close at 9,842.9. Losses were led by the Real Estate and Consumer Goods & Services indices, falling 2.1% and 1.4%, respectively. Top losers were National Leasing and Qatar German Co. for Medical Devices, falling 3.9% and 3.8%, respectively. Among the top gainers, Qatar General Insurance & Reinsurance Co. rose 5.9%, while Dlala Brokerage & Investments Holding Co. was up 0.5%. GCC Commentary Saudi Arabia: The TASI Index fell 1.1% to close at 6,478.6. Losses were led by the Media & Publishing and Hotel & Tourism indices, falling 3.4% and 2.5%, respectively. MetLife AIG ANB Coop. Ins. fell 4.7%, while United Coop. Assurance was down 4.5%. Dubai: The DFM Index declined 3.3% to close at 3,258.2. The Real Estate & Construction index fell 4.8%, while the Financial & Investment Services index declined 3.3%. Al Mazaya Holding Co. fell 7.0%, while Almadina for Finance & Inv. was down 6.7%. Abu Dhabi: The ADX benchmark index fell 1.8% to close at 4,416.7. The Real Estate index declined 3.1%, while the Energy index fell 3.0%. Abu Dhabi National Energy Co. declined 7.6%, while Abu Dhabi National Co. B & M was down 6.1%. Kuwait: The KSE Index declined 1.1% to close at 5,347.9. The Real Estate index fell 1.9%, while the Telecommunication index declined 1.6%. Tamdeen Real Estate Co. fell 8.9%, while International Financial Advisers was down 8.8%. Oman: The MSM Index fell 0.6% to close at 5,762.2. Losses were led by the Industrial and Financial indices, falling 1.0% and 0.9%, respectively. Oman Hotels & Tourism fell 9.9%, while Al Hassan Engineering was down 5.0%. Bahrain: The BHB Index fell 0.7% to close at 1,111.1. The Commercial Bank index declined 1.8%, while the other indices ended flat or in green. Ithmaar Bank declined 4.2%, while Al-Ahli United Bank was down 3.1%. QSE Top Gainers Close* 1D% Vol. ‘000 YTD% Qatar General Ins. & Reinsurance Co. 49.75 5.9 1.7 7.1 Dlala Brokerage & Inv. Holding Co. 22.10 0.5 187.3 19.5 QSE Top Volume Trades Close* 1D% Vol. ‘000 YTD% Gulf International Services 36.50 (3.1) 714.3 (29.1) Qatar First Bank 11.31 (2.5) 663.6 (24.6) Vodafone Qatar 10.30 (2.6) 597.2 (18.9) Mesaieed Petrochemical Holding 18.50 (3.1) 317.5 (4.6) Barwa Real Estate Co. 32.85 (1.6) 254.7 (17.9) Market Indicators 26 June 16 23 June 16 %Chg. Value Traded (QR mn) 136.2 83.7 62.8 Exch. Market Cap. (QR mn) 530,523.2 537,365.7 (1.3) Volume (mn) 4.8 2.4 96.8 Number of Transactions 2,447 1,423 72.0 Companies Traded 40 39 2.6 Market Breadth 2:34 17:15 – Market Indices Close 1D% WTD% YTD% TTM P/E Total Return 15,925.08 (1.2) (1.2) (1.8) 13.5 All Share Index 2,737.37 (1.2) (1.2) (1.4) 13.0 Banks 2,648.14 (1.1) (1.1) (5.6) 11.2 Industrials 3,035.85 (1.3) (1.3) (4.7) 13.9 Transportation 2,449.69 (0.9) (0.9) 0.8 11.3 Real Estate 2,481.23 (2.1) (2.1) 6.4 22.8 Insurance 4,012.57 0.7 0.7 (0.5) 10.4 Telecoms 1,098.76 (1.1) (1.1) 11.4 17.4 Consumer 6,306.10 (1.4) (1.4) 5.1 13.0 Al Rayan Islamic Index 3,807.76 (1.6) (1.6) (1.2) 16.7 GCC Top Gainers## Exchange Close# 1D% Vol. ‘000 YTD% Saudi Real Estate Co. Saudi Arabia 21.40 9.8 3,022.7 (6.9) Qatar Gen. Ins. & Reins. Qatar 49.75 5.9 1.7 7.1 Arriyadh Development Co. Saudi Arabia 19.77 3.2 2,070.5 7.9 Saudi Electricity Co. Saudi Arabia 19.72 2.0 4,641.8 25.5 Jabal Omar Development Saudi Arabia 64.61 1.9 758.5 16.4 GCC Top Losers## Exchange Close# 1D% Vol. ‘000 YTD% Abu Dhabi Nat. Energy Co. Abu Dhabi 0.49 (7.5) 6,995.3 4.3 Arabtec Holding Co. Dubai 1.32 (5.7) 44,555.3 5.6 Drake & Scull International Dubai 0.52 (5.6) 24,810.5 26.0 Deyaar Development Dubai 0.58 (5.0) 29,836.3 13.6 Emaar Properties Dubai 6.10 (4.7) 17,773.2 7.2 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% National Leasing 17.41 (3.9) 122.4 23.5 Qatar German Co. for Medical Dev. 11.01 (3.8) 208.2 (19.8) Qatari Investors Group 46.00 (3.7) 111.9 22.0 Mesaieed Petrochemical Holding 18.50 (3.1) 317.5 (4.6) Gulf International Services 36.50 (3.1) 714.3 (29.1) QSE Top Value Trades Close* 1D% Val. ‘000 YTD% Gulf International Services 36.50 (3.1) 26,131.8 (29.1) Barwa Real Estate Co. 32.85 (1.6) 8,305.4 (17.9) Industries Qatar 100.00 (0.5) 7,565.8 (10.0) Qatar First Bank 11.31 (2.5) 7,446.8 (24.6) Qatar Fuel 149.50 (1.3) 6,729.1 9.5 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* 9,842.85 (1.2) (1.2) 3.2 (5.6) 37.41 145,734.7 13.5 1.5 4.2 Dubai 3,258.17 (3.3) (3.3) (1.7) 3.4 139.97 88,135.1 10.9 1.2 4.3 Abu Dhabi 4,416.68 (1.8) (1.8) 3.9 2.5 42.08 117,477.7 11.7 1.5 5.5 Saudi Arabia 6,478.60 (1.1) (1.1) 0.5 (6.3) 1,324.16 399,556.9 15.0 1.5 3.8 Kuwait 5,347.92 (1.1) (1.1) (1.0) (4.8) 40.93 80,067.5 18.2 1.0 4.4 Oman 5,762.21 (0.6) (0.6) (0.8) 6.6 6.20 22,909.7 11.0 1.3 4.5 Bahrain 1,111.14 (0.7) (0.7) (0.0) (8.6) 1.17 17,545.9 9.3 0.4 4.9 Source: Bloomberg, Qatar Stock Exchange, Tadawul, Muscat Securities Exchange, Dubai Financial Market and Zawya (** TTM; * Value traded ($ mn) do not include special trades, if any) 9,600 9,700 9,800 9,900 10,000 9:30 10:00 10:30 11:00 11:30 12:00 12:30 13:00
  • 2. Page 2 of 5 Qatar Market Commentary  The QSE Index declined 1.2% to close at 9,842.9. The Real Estate and Consumer Goods & Services indices led the losses. The index fell on the back of selling pressure from Qatari and GCC shareholders despite buying support from non-Qatari shareholders.  National Leasing and Qatar German Co. for Medical Devices were the top losers, falling 3.9% and 3.8%, respectively. Among the top gainers, Qatar General Insurance & Reinsurance Co. rose 5.9%, while Dlala Brokerage & Investments Holding Co. was up 0.5%.  Volume of shares traded on Sunday rose by 96.8% to 4.8mn from 2.4mn on Thursday. However, as compared to the 30-day moving average of 4.9mn, volume for the day was 2.2% lower. Gulf International Services and Qatar First Bank were the most active stocks, contributing 14.9% and 13.9% to the total volume, respectively. Source: Qatar Stock Exchange (* as a % of traded value) Earnings Calendar Earnings Calendar Tickers Company Name Date of reporting 2Q2016 results No. of days remaining Status BRES Barwa Real Estate Company 4-Jul-16 7 Due QNBK QNB Group 12-Jul-16 15 Due UDCD United Development Company 18-Jul-16 21 Due ORDS Ooredoo 26-Jul-16 29 Due AKHI Al Khaleej Takaful Insurance 2-Aug-16 36 Due Source: QSE Overall Activity Buy %* Sell %* Net (QR) Qatari Individuals 48.97% 50.54% (2,138,246.56) Qatari Institutions 12.10% 14.31% (3,005,137.66) Qatari 61.07% 64.85% (5,143,384.22) GCC Individuals 1.01% 4.21% (4,360,245.69) GCC Institutions 4.86% 4.41% 612,289.40 GCC 5.87% 8.62% (3,747,956.29) Non-Qatari Individuals 19.39% 24.59% (7,083,679.36) Non-Qatari Institutions 13.67% 1.94% 15,975,019.87 Non-Qatari 33.06% 26.53% 8,891,340.51
  • 3. Page 3 of 5 News Qatar  QNB Group to disclose semi-annual financials on July 12 – QNB Group (QNBK) has announced to disclose the reviewed financial reports for the period ending June 30, 2016 on July 12, 2016. (QSE)  QNBFS: Brexit-related currency exposures minimal for Qatar banks – GBP/Euro F/X fluctuations is expected have negligible impact on Qatari banks’ financials. As far as GBP is concerned, Qatari banks have negligible net exposures (as a % of shareholders’ equity). However, in terms of banks under coverage, CBQK could actually benefit from a further depreciation in the Euro. Near-term volatility in stock prices could be driven by subdued sentiment, lower oil prices and EM risk-off trade (strengthening $). However, we see little direct impact on company financials due to BREXIT. The impending FTSE EM Index inclusion (first tranche in September 2016) remains the next major catalyst for the Qatari market (QNBFS Research)  Links Group: Qatar’s retail market to grow at 9.8% to reach $284bn in 2018 – Links Group, a provider of commercial facilitation and advisory services, revealed in its recent report that Qatar’s economic diversification strategy continues to create foreign investment opportunities across its burgeoning retail market, despite sustained low oil prices. The group added in the report that Qatar’s retail market is expected to grow at a compound annual growth rate (CAGR) of 9.8% reaching $284.5bn in 2018, the fastest in the GCC region. The report said the government has ambitious plans to develop its retail landscape to meet rising demand from the growing population’s high-level of personal consumption, adding that the key projects already underway include Mall of Qatar, Doha Festival City and Place Vendome. Links Group Founding Partner John Martin St Valery said, “Continued low oil prices mean Qatar is seeing its state revenues decline. As such, the country is actively seeking foreign and private sector investments. The development of the retail sector will help to shore up its economy and present excellent opportunities for foreign investors. In 2015, the country was ranked as the fourth most attractive retail market, placing it first in the Middle East.” (Qatar-Tribune)  Water recycling research gets boost – The Qatar Environment & Energy Research Institute (Qeeri), one of the three research institutes under the Hamad Bin Khalifa University, is in the process of conducting a pilot research in the reuse of treated sewage and agricultural waste water. Qeeri Acting Executive Director, Dr Khalid al-Subai said, “A modular pilot plant will be used in the experiments to deliver improved, high-quality water that can be used for irrigation, grey water application, district cooling and other purposes.” “The reuse of treated sewage effluents will provide a major water source in Qatar for agriculture and industrial applications and reduce the demand on desalinated water and major capital investments to build more desalination plants.” (Gulf-Times.com) International  IMF: Markets got 'Brexit' vote wrong, but did not panic – International Monetary Fund (IMF) Managing Director Christine Lagarde said that the Financial markets "vastly underestimated" the outcome of Britain's vote to leave the European Union (EU) but did not panic on June 23. She said "There was a violent, brutal, immediate massive move; the pound went down by 10%." "But there was no panic and the central bankers did the job that they were prepared to do just in case, which was to put a lot of liquidity on the markets." She said there were no market liquidity problems like those experienced in 2008 during the worst part of the financial crisis. Lagarde, however, said that how markets react from here depends on what steps UK and European policymakers take to deal with the separation vote and limit uncertainty. (Reuters)  BIS: Central banks will smooth Brexit-driven market moves – Bank for International Settlements (BIS) Head, Jaime Caruana said that the major central banks will limit market turbulence as much as possible after Britain voted to leave the European Union (EU). Some of the world's biggest central banks offered financial backstops on June 23 to soothe plunging markets after the British referendum, and some intervened in currency markets as they worried that the volatility could hit growth. (Reuters)  China May industrial profits up 3.7% YoY – The statistics bureau said that the profits of Chinese industrial companies rose 3.7% YoY in May, slowing from April's pace and adding to concerns about the health of the world's second-largest economy. The profits in May rose to $81.21bn, profits in the mining sector fell 93.8% YoY. The profits rose 6.4% YoY in first five months of 2016. Industrial profits in January-April rose 6.5% YoY, with April up 4.2%. Chinese industrial firms' debt at the end of May was 4.9% higher than at the same point in 2015. (Reuters)  China aims to cut steel capacity by 45mn tons in 2016 – National Development and Reform Commission Chairman Xu Shaoshi said, China plans to cut its steel production capacity in 2016 by 45mn tons and lower coal output capacity by 280mn tons. He said the capacity cuts will involve relocating 700,000 workers in the coal sector, and 180,000 workers in the steel industry. Xu said he was very confident that China will achieve the 2016 targets. (Reuters) Regional  Vehicle sales in Middle East region estimated to reach 4.4mn in 2020 – According to Frost & Sullivan, total light vehicle sales in the Middle East region is estimated to reach 4.4mn by 2020 as compared to 3.2mn in 2015. At the same time, the number of vehicles in operation on the region's roads will rise from 34.8mn in 2015 to 44.5mn in 2020. This burgeoning growth is expected to drive up demand for parts and accessories, for which sales is expected to reach $17.2bn in 2020 as compared to the 2015 total sales of $12.98bn. This surge in demand is being driven by a variety of factors, chief among which are rapid urbanization and growing infrastructural and industrial development in the surging economies across the region. (GulfBase.com)  Saudi Arabia’s hotel occupancy expected to grow in 2016 – Embassies of the Kingdom of Saudi Arabia have issued a number of visas in 2016 reaching 5.67mn with more than 5mn already having entered the Kingdom. Hospitality experts and local travel operators are seeing a surge in travel bookings to Makkah and Madinah in 2016, and are expecting a further increase over the coming weeks toward the end of Ramadan. The Ministry of Hajj and Umrah had recently announced that Umrah pilgrims in 2016 could reach up to 7mn, with more than 1.2mn coming from Egypt, followed by more than 900,000 visas issued to pilgrims from Pakistan and around 655,000 visas issued to Indonesians. The Ministry noted that it has already recorded a 5% rise in Umrah pilgrims in 2016, a figure that is expected to soar 30% by 2020. (GulfBase.com)  Strong demand expected from KSA global bond sale – According to sources, Saudi Arabia appointed JPMorgan Chase & Co., HSBC Holdings and Citigroup to arrange its first international bond sale. The decision on the mandates was made on June 25 and the Kingdom will probably wait until summer before selling the bonds. The Kingdom is preparing for a sale of at least $10bn. (GulfBase.com)  Saudi Arabia’s non-oil GDP growth expected to slow to 2.8% in 2016 – Saudi Arabia central bank governor Ahmed al-Kholifey said
  • 4. Page 4 of 5 that the growth in Saudi Arabia's non-oil gross domestic product is expected to slow to 2.8% in 2016 from 3.4% in 2015. (Reuters)  Saudi Arabia’s April imports plunge 27% YoY, non-oil exports tumble - Saudi Arabia's imports in April sank 27.2% as compared to the year-ago period and non-oil exports dropped 18.4%. Non-oil exports usually account for around 12% of Saudi Arabia’s overall exports. He said the central bank was continuing to monitor key economic indicators, noting that the point-of-sale aggregate, an indicator of consumption, had risen 15% YoY in May and that a rebound of oil prices over the past few months had helped to support growth. (Reuters)  UAE's Jumeirah, Rotana hold talks to open hotels near Jeddah Tower – Jeddah Economic Company (JEC) chief development officer Hisham Jomah said that UAE-based hospitality firms Jumeirah Group and Rotana Hotels are in talks to open hotels near the Jeddah Tower. (Bloomberg)  DIB rights issue three times oversubscribed – Dubai Islamic Bank (DIB), the biggest Shari’ah-compliant lender in the emirate, said its AED3.2bn capital increase was nearly three times oversubscribed. DIB said the rights issue will increase the bank’s share capital to AED4.94bn from AED3.95bn through the issuance of 988.4mn new shares. (GulfBase.com)  Damac awards contracts worth AED3bn in 1H2016 – Dubai developer Damac Properties has awarded 25 construction and consultancy contracts worth AED3bn in the past six months. Damac said the contracts awarded include the construction of 2,678 villas in its Akoya Oxygen development and three golf apartment buildings at Carson – The Drive, also at Akoya. (GulfBase.com)  Economic diversification, Expo 2020 to shield Dubai from oil price rout – Dubai’s economy is expected to slow down for the year as a whole, as the construction and property sectors languish and global trade flow contract. But the emirate’s diversification in the end will shield it from the oil price rout. For 2016, forecasters are expecting a growth between 3% and 4%. The Expo 2020 project is expected to drive expansion in 2017 and beyond. (Bloomberg)  Dubai Parks approves name change to DXB Entertainments – Dubai Parks & Resorts has resolved to change its name to DXB Entertainments. At a general assembly meeting on June 23, the company officially adopted the resolution for the name change. (Bloomberg)  ADX lists mandatory convertible bonds into ADNIC shares – Abu Dhabi Securities Exchange’s (ADX) mandatory convertible bonds were listed into shares by Abu Dhabi National Insurance Company (ADNIC) on June 23. (ADX)  Bank Nizwa appoints acting CEO – Bank Nizwa Board of Directors (BoD) has appointed Mr Khalid Al Kayed as acting CEO. (MSM)  Oman set to become world’s largest gypsum exporter by 2018 – Oman is on track to being crowned as the world’s largest exporter of gypsum by 2018 on the back of surging output that underscores the immense potential of the Sultanate’s mining sector to fuel the nation’s long-term economic development. Exports are projected to surpass 10mn tons per annum in 2018, up from 5.85mn tons at the end of 2015, a phenomenal increase that industry experts say will position the Sultanate as a global supplier of gypsum in the coming years. (GulfBase.com)  Assets of commercial banks in Oman rise 7.7% to OMR28.6bn – According to sources, the total assets of conventional commercial banks increased by 7.7% YoY to OMR28.6bn in April 2016. Of the total assets, credit disbursement accounted for 67.2% and increased by 9.4% at the end of April 2016 to OMR19.2bn – credit to the private sector increased by 12.1% to reach OMR16.9bn at the end of April 2016. Conventional banks' overall investments in securities stood at OMR2.7bn at the end of April 2016. (GulfBase.com)  Bahrain gets cracking with needed refinery expansion – The expansion of the Bapco Sitra Refinery in Bahrain is finally underway after much delay. The project was conceived in 2012 with a launch date in 2017. But delays have now shifted the completion date to 2020. Given the uncertainties in the oil market, going ahead with a project that is expected to cost around $5bn to $6.5bn is an indicator of the determination of Bapco and the Bahrain government to proceed with major projects not only in refining but also in other related projects. (GulfBase.com)
  • 5. Contacts Saugata Sarkar Shahan Keushgerian Zaid al-Nafoosi, CMT, CFTe Head of Research Senior Research Analyst Senior Research Analyst Tel: (+974) 4476 6534 Tel: (+974) 4476 6509 Tel: (+974) 4476 6535 saugata.sarkar@qnbfs.com.qa shahan.keushgerian@qnbfs.com.qa zaid.alnafoosi@qnbfs.com.qa QNB Financial Services Co. WLL One Person Company Contact Center: (+974) 4476 6666 PO Box 24025 Doha, Qatar Disclaimer and Copyright Notice: This publication has been prepared by QNB Financial Services Co. WLL One Person Company (“QNBFS”) a wholly-owned subsidiary of QNB SAQ (“QNB”). QNBFS is regulated by the Qatar Financial Markets Authority and the Qatar Exchange QNB SAQ is regulated by the Qatar Central Bank. This publication expresses the views and opinions of QNBFS at a given time only. It is not an offer, promotion or recommendation to buy or sell securities or other investments, nor is it intended to
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