QNBFS Daily Market Report June 30, 2016

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1. Page 1 of 6 QSE Intra-Day Movement Qatar Commentary The QSE Index rose 0.1% to close at 9,877.8. Gains were led by the Insurance and Consumer Goods & Services…
  • 1. Page 1 of 6 QSE Intra-Day Movement Qatar Commentary The QSE Index rose 0.1% to close at 9,877.8. Gains were led by the Insurance and Consumer Goods & Services indices, gaining 1.6% and 0.4%, respectively. Top gainers were Qatar Insurance Co. and Doha Bank, rising 2.2% and 1.6%, respectively. Among the top losers, Mazaya Qatar Real Estate Development and National Leasing were down 1.1% each. GCC Commentary Saudi Arabia: The TASI Index rose 0.3% to close at 6,500.4. Gains were led by the Cement and Telecommunication & IT indices, rising 1.0% and 0.7%, respectively. Saudi Arabian Cooperative Insurance Co. rose 9.8%, while L'azurde for Jewelry was up 8.1%. Dubai: The DFM Index declined 0.4% to close at 3,271.4. The Consumer Staples index fell 3.1%, while the Banks index declined 0.9%. Dar Al Takaful fell 10.0%, while Ekttitab Holding Co. was down 9.9%. Abu Dhabi: The ADX benchmark index rose 0.2% to close at 4,417.0. The Services index gained 1.9%, while the Real Estate index rose 0.7%. Abu Dhabi National Hotels gained 4.7%, while RAK Properties was up 3.5%. Kuwait: The KSE Index declined marginally to close at 5,374.8. The Technology index fell 2.5%, while the Telecommunication index declined 1.3%. Gulf Franchising Holding Co. fell 7.4%, while The Energy House Holding Co. was down 6.7%. Oman: The MSM Index rose 0.3% to close at 5,779.6. Gains were led by the Financial and Industrial indices, rising 0.7% and 0.5%, respectively. Al Sharqia Investment Holding rose 7.7%, while National Gas was up 4.6%. Bahrain: The BHB Index gained 0.4% to close at 1,118.2. The Investment index rose 0.7%, while the Services index gained 0.5%. Nass Corporation rose 3.1%, while Arab Banking Corporation was up 2.7%. QSE Top Gainers Close* 1D% Vol. ‘000 YTD% Qatar Insurance Co. 73.80 2.2 109.6 6.1 Doha Bank 35.30 1.6 37.4 (20.7) Mesaieed Petrochemical Holding Co. 18.70 1.1 165.5 (3.6) Dlala Brokerage & Inv. Holding Co. 24.37 1.0 367.7 31.8 Qatar Fuel 150.80 0.9 9.3 10.4 QSE Top Volume Trades Close* 1D% Vol. ‘000 YTD% Dlala Brokerage & Inv. Holding Co. 24.37 1.0 367.7 31.8 Vodafone Qatar 10.54 0.7 328.9 (17.0) Gulf International Services 36.40 0.0 324.5 (29.3) Mazaya Qatar Real Estate Dev. 13.20 (1.1) 217.0 (2.4) Qatar First Bank 11.35 0.0 181.3 (24.3) Market Indicators 29 June 16 28 June 16 %Chg. Value Traded (QR mn) 95.2 129.7 (26.6) Exch. Market Cap. (QR mn) 532,190.7 531,935.0 0.0 Volume (mn) 2.9 4.3 (33.6) Number of Transactions 1,750 1,980 (11.6) Companies Traded 37 42 (11.9) Market Breadth 18:12 23:15 – Market Indices Close 1D% WTD% YTD% TTM P/E Total Return 15,981.55 0.1 (0.9) (1.4) 13.6 All Share Index 2,748.72 0.1 (0.8) (1.0) 13.1 Banks 2,661.71 (0.1) (0.6) (5.1) 11.3 Industrials 3,018.64 (0.2) (1.9) (5.3) 13.9 Transportation 2,470.31 0.4 (0.1) 1.6 11.4 Real Estate 2,500.86 0.3 (1.3) 7.2 23.0 Insurance 4,076.99 1.6 2.3 1.1 10.6 Telecoms 1,095.04 (0.7) (1.5) 11.0 17.3 Consumer 6,369.90 0.4 (0.4) 6.2 13.1 Al Rayan Islamic Index 3,818.84 0.0 (1.4) (1.0) 16.7 GCC Top Gainers## Exchange Close# 1D% Vol. ‘000 YTD% Abu Dhabi National Hotels Abu Dhabi 3.14 4.7 17.0 8.3 Saudi Ceramic Co. Saudi Arabia 39.15 4.1 827.2 (16.3) Boubyan Petrochemicals Kuwait 0.51 4.1 294.6 (3.8) Salhia Real Estate Co. Kuwait 0.39 4.1 0.8 4.1 Astra Industrial Group Saudi Arabia 16.51 3.1 2,178.5 (16.6) GCC Top Losers## Exchange Close# 1D% Vol. ‘000 YTD% National Mobile Telecomm. Kuwait 1.10 (5.2) 2.7 0.0 Sharjah Islamic Bank Abu Dhabi 1.52 (4.4) 38.2 1.3 Tihama Adv. & Public Saudi Arabia 32.59 (2.8) 1,588.5 9.3 Solidarity Saudi Takaful Co. Saudi Arabia 9.18 (2.3) 1,221.7 23.6 Saudi Printing & Packaging Saudi Arabia 19.51 (2.0) 751.2 (25.8) 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% Mazaya Qatar Real Estate Dev. 13.20 (1.1) 217.0 (2.4) National Leasing 17.44 (1.1) 18.9 23.7 Ooredoo 88.00 (1.0) 53.3 17.3 Salam International Inv. Ltd 11.16 (0.8) 21.8 (5.6) Industries Qatar 98.00 (0.6) 38.2 (11.8) QSE Top Value Trades Close* 1D% Val. ‘000 YTD% Gulf International Services 36.40 0.0 11,854.2 (29.3) Dlala Brokerage & Inv. Holding Co. 24.37 1.0 8,882.1 31.8 Qatar Insurance Co. 73.80 2.2 7,897.9 6.1 QNB Group 139.90 (0.3) 7,266.6 (4.1) Commercial Bank 36.60 (0.3) 4,783.5 (20.3) 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* 9,877.75 0.1 (0.9) 3.6 (5.3) 26.14 146,192.8 13.6 1.5 4.1 Dubai 3,271.38 (0.4) (2.9) (1.3) 3.8 96.70 88,083.4 11.0 1.2 4.3 Abu Dhabi 4,417.03 0.2 (1.8) 3.9 2.5 24.07 117,669.2 11.7 1.5 5.5 Saudi Arabia 6,500.42 0.3 (0.8) 0.8 (6.0) 1,061.33 400,768.9 15.0 1.5 3.8 Kuwait 5,374.78 (0.0) (0.6) (0.5) (4.3) 21.70 80,674.8 18.3 1.0 4.4 Oman 5,779.59 0.3 (0.3) (0.5) 6.9 7.88 22,992.1 11.0 1.3 4.5 Bahrain 1,118.16 0.4 (0.1) 0.6 (8.0) 1.25 17,656.5 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) 9,800 9,820 9,840 9,860 9,880 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 0.1% to close at 9,877.8. The Insurance and Consumer Goods & Services indices led the gains. The index rose on the back of buying support from non-Qatari shareholders despite selling pressure from Qatari and GCC shareholders.  Qatar Insurance Co. and Doha Bank were the top gainers, rising 2.2% and 1.6%, respectively. Among the top losers, Mazaya Qatar Real Estate Development and National Leasing were down 1.1% each.  Volume of shares traded on Wednesday fell by 33.6% to 2.9mn from 4.3mn on Tuesday. Further, as compared to the 30-day moving average of 4.4mn, volume for the day was 34.2% lower. Dlala Brokerage & Investments Holding Co. and Vodafone Qatar were the most active stocks, contributing 12.8% and 11.5% to the total volume, respectively. Source: Qatar Stock Exchange (* as a % of traded value) Global Economic Data and Earnings Calendar Global Economic Data Date Market Source Indicator Period Actual Consensus Previous 06/29 US Mortgage Bankers Association MBA Mortgage Applications 24-June -2.60% – 2.90% 06/29 US National Assoc. of Realtors Pending Home Sales MoM May -3.70% -1.10% 3.90% 06/29 US National Assoc. of Realtors Pending Home Sales NSA YoY May 2.40% 4.60% 1.80% 06/29 EU European Commission Consumer Confidence June F -7.3 -7.3 -7.3 06/29 Germany Destatis CPI MoM June P 0.10% 0.20% 0.30% 06/29 Germany Destatis CPI YoY June P 0.30% 0.30% 0.10% 06/29 Germany GfK AG GfK Consumer Confidence July 10.1 9.8 9.8 06/29 Japan METI Retail Trade YoY May -1.90% -1.60% -0.80% Source: Bloomberg (s.a. = seasonally adjusted; n.s.a. = non-seasonally adjusted; w.d.a. = working day adjusted) Earnings Calendar Tickers Company Name Date of reporting 2Q2016 results No. of days remaining Status BRES Barwa Real Estate Company 4-Jul-16 4 Due QNBK QNB Group 12-Jul-16 12 Due QEWS Qatar Electricity & Water Company 13-Jul-16 13 Due QGTS Qatar Gas Transport Company (Nakilat) 13-Jul-16 13 Due UDCD United Development Company 18-Jul-16 18 Due QATI Qatar Insurance Company 19-Jul-16 19 Due QIIK Qatar International Islamic Bank 19-Jul-16 19 Due DHBK Doha Bank 20-Jul-16 20 Due ORDS Ooredoo 26-Jul-16 26 Due VFQS Vodafone Qatar 26-Jul-16 26 Due AKHI Al Khaleej Takaful Insurance 2-Aug-16 33 Due Source: QSE Overall Activity Buy %* Sell %* Net (QR) Qatari Individuals 32.03% 42.91% (10,352,224.64) Qatari Institutions 26.22% 24.90% 1,263,807.84 Qatari 58.25% 67.81% (9,088,416.80) GCC Individuals 1.07% 2.41% (1,278,475.49) GCC Institutions 6.67% 7.86% (1,123,996.53) GCC 7.74% 10.27% (2,402,472.02) Non-Qatari Individuals 12.31% 8.81% 3,330,405.04 Non-Qatari Institutions 21.69% 13.11% 8,160,483.78 Non-Qatari 34.00% 21.92% 11,490,888.82
  • 3. Page 3 of 6 News Qatar  VFQS to disclose 1Q2016 financials on July 26 – Vodafone Qatar (VFQS) has announced that it will disclose the reviewed financial statements for 1Q2016 on July 26, 2016.. (QSE)  QATI to disclose semi-annual financials on July 19 – Qatar Insurance Company (QATI) has announced that it will disclose the reviewed financial statements for the period ending June 30, 2016 on July 19, 2016. (QSE)  QIIK to disclose semi-annual financials on July 19 – Qatar International Islamic Bank (QIIK) has announced that it will disclose the reviewed financial statements for the period ending June 30, 2016 on July 19, 2016. (QSE)  IIF: Qatar to stay fastest growing economy in MENA – According to the Institute of International Finance (IIF), Qatar, which has been weathering the energy prices crash, will remain the fastest growing economy at 3.7% in 2016 and 3.8% in 2017 in the Middle East and North African (MENA) region, driven by the 2022 World Cup related projects. The IIF added Qatar’s overall situation remains “manageable” given a relatively low breakeven oil price and high stocks of external assets. It said hydrocarbons growth is expected to be 1.4% in 2016 and 2017, while non-hydrocarbons expansion is set to be faster at 6%. The IIF further said, “We expect growth to continue to be underpinned by infrastructure projects in preparation to host the 2022 FIFA World Cup, which has led to an influx of blue collar workers and kept population growth high at 9% a year in the past few years.” (Gulf-Times.com)  IIF: Qatar may find it difficult to deal with excessive debt build-up – The Institute of International Finance (IIF) has said that Qatar, which has already used the central bank’s official reserves to finance the budgetary deficit, could witness overcapacity over the medium term through large sovereign investments and may also find it difficult to deal with excessive debt build-up, unless the new infrastructure supports development and diversification. Finding that Qatar has not tapped into its sovereign wealth fund’s foreign assets to finance the deficit, which is expected at 4.7% of gross domestic product (GDP) in 2016, the IIF said the government account balance at the Qatar Central Bank has been used, leading to a decline in official reserves to $36bn in April 2016, from $43bn at 2014- end. At the same time, government borrowing from local banks has risen “significantly” since November 2015, mostly through an increase in short-term overdraft accounts. The authorities have issued $7.4bn worth domestic bonds and Sukuk (Islamic debt) since September 2015. Meanwhile, IIF said Qatar’s foreign exchange rate regime is expected to remain unchanged despite the loss of competitiveness. The IIF said highlighting that with the US dollar’s strength in recent years, the Qatari riyal’s real effective exchange rate has appreciated 16% since 2012. (Gulf- Times.com)  QA to explore raising stake in British Airways owner IAG – Qatar Airways (QA) is considering further increasing its stake in British Airways owner IAG after the UK-based company lost a third of its market value in the fallout from the country’s vote to leave the European Union. QA, already IAG’s largest shareholder, is exploring boosting its holding to around 20% from 15%. The Middle Eastern airline is monitoring market developments and shareholders’ willingness to sell and has not made a final decision on the move. (Gulf-Times.com)  RasGas signs new LNG deal with EDF to supply 2mn tons a year – Ras Laffan Liquefied Natural Gas Company - 3 (RL 3) has entered into a new liquefied natural gas (LNG) sales and purchase agreement (SPA) with French energy company EDF, under which RasGas will deliver up to 2mn tons a year to EDF’s new terminal in Dunkerque, France from 2017. This agreement complements three existing long-term SPAs between RasGas ventures and EDF group subsidiaries for delivery of up to 4.6mn tons per year to Edison in Italy and up 3.5mn tons per year to EDF Trading in Belgium. (Gulf- Times.com) International  US consumer spending rises, Brexit casts shadow on outlook – US consumer spending rose for a second straight month in May on increased demand for automobiles and other goods, but there are fears Britain's vote to leave the EU could hurt confidence and prompt households to cut back on consumption. The Commerce Department pointed to acceleration in economic growth in 2Q2016. Economists still worry that financial turbulence, following recent so-called "Brexit" referendum, could hurt consumer confidence and cause households to bulk up their savings rather than increase spending because of an uncertain economic outlook. (Reuters)  Federal Reserve: Big US banks pass Fed's stress test, boosting shareholder payouts – The US Federal Reserve said, nearly all of the largest US banks are on steady enough footing to increase payouts to shareholders, with just two subsidiaries of foreign banks failing its annual stress test. The results show that big US banks have not only built up significant capital since the 2007- 2009 financial crisis but that management teams have largely proven the merit of their internal disaster planning to the Fed. However, the Fed criticized some elements of Morgan Stanley's capital planning process - but still allowed the bank to move ahead with plans for a $3.5bn stock repurchase program and a quarterly dividend hike while it rectifies the issues. The regulatory thumbs up prompted a slew of announcements from banks that plan to buy back more stock or increase dividends. (Reuters)  UK consumer confidence tumbles after Brexit vote – According to a survey, confidence among British consumers fell sharply in the days after the country decided to leave the EU, which gave a first glimpse of how the shock referendum result has affected households. The YouGov/CEBR Consumer Confidence Index, which measures people's economic sentiment on a daily basis, slumped to its lowest level since May 2013, when Britain's economy was just starting to emerge from its post-financial crisis sluggishness. Centre for Economics and Business Research Director Scott Corfe said, households were "highly spooked" by the referendum outcome which would hurt retail sales and household spending, particularly on big-ticket items. Corfe said "A recession certainly cannot be ruled out at this point." (Reuters)  Eurozone sentiment dips as services, consumers less upbeat – According to the European Commission, Eurozone economic sentiment dipped in June as industry gains were outweighed by less optimism among service firms and consumers, while inflation expectations rose. Economic sentiment in the 19 countries sharing the euro fell to 104.4 this month from downwardly revised 104.6 in May, against market consensus of a 104.7 reading. The decline was due to decreased optimism among consumers and managers in services, retail and construction. Confidence in the industrial sector improved slightly. Separately, the Commission's business climate index, dipped to 0.22 in June from 0.26 in May. Consumer expectations of price trends over the next 12 months rose for a third straight month to 5.1 in June from 3.4 in May, although they remained well below the long-term average of 19.2. (Reuters)  German inflation hits five-month high, Spanish prices fall less than expected – German annual inflation hit a five-month high in June while Spanish consumer prices fell slightly less than expected, in encouraging signs for the European Central Bank as it frets over persistently low inflation across the Eurozone. The Federal Statistics Office (Destatis) said German consumer prices,
  • 4. Page 4 of 6 harmonized to compare with other European countries (HICP), rose by 0.2% YoY after being unchanged in May. The German data came after Spain's National Statistics Institute said Spanish consumer prices fell slightly less than expected in June, dropping 0.9% YoY against a forecast of 1.0%. In Spain, which depends heavily on energy imports, EU-harmonized consumer prices have been deep in negative territory for almost a year and have not topped 2% in around 3 years, weighed down by low global oil prices. (Reuters)  France flags tax relief for voters, businesses, banks - French President Francois Hollande flagged plans to ease the tax burden on middle class voters and small companies while also making Paris a more attractive financial centre after Britain's referendum to leave the European Union. According to sources, Hollande said that the households would see their taxes trimmed by a further €2bn if growth proved to be at least 1.7% in 2017. Hollande said that French growth would top 1.6 percent this year, allowing for 200,000 jobs to be created. He said the fiscal burden on firms would also keep easing with a further €5bn in tax cuts already planned to be focused on increasing an existing payroll tax relief scheme and cutting taxes for small and mid-sized firms. (Reuters)  IMF will lower growth forecast for German economy after Brexit – International Monetary Fund (IMF) Assistant Director of European department Enrica Detragiache said, the IMF is likely to lower its growth forecast for the German economy in the coming weeks as a result of Britain's decision to leave the European Union. He said Britain is an important trade partner for Germany, and significant changes in the economic relationship between the two countries will have repercussions for Germany. (Reuters)  China growth rebounds in 2Q2016, but may not last – China's economy rebounded in 2Q2016, with capital expenditures recovering from 5-year lows, as higher government spending helped boost the property and construction sectors. The quarterly survey of over 3,000 firms by China Beige Book International (CBB) also showed better hiring and a strong rebound in the services sector, which if sustainable would point to progress in Beijing's long-stated goal of rebalancing the economy. The "Beige Book" findings contrast to some degree with official data and some other private surveys which point to some steadying in certain parts of the economy but weakness elsewhere. Official data had shown a pick-up in March but readings for April and May suggested that improvement may be short-lived. Private investment growth has shrunk to a record low, putting more of the burden on state-controlled firms to support economic growth. (Reuters)  Russian budget deficit 4.3% of GDP in 1H2016 - Russia's Finance Minister Anton Siluanov said that the country’s federal budget deficit amounted to 4.3% of GDP in 1H2016, underscoring the need for spending cutbacks. He added that the relatively high deficit had been caused by a 12% decline in government revenues, primarily oil and gas revenues, which had declined by 30%. Russia's budget plan aims for a 3% deficit in 2016 but Deputy Finance Minister Alexei Lavrov said that the ministry is now aiming for a deficit of 3.0-3.3%. (Reuters) Regional  Falih: KSA, Japanese officials to discuss investment into Aramco IPO – Saudi Arabia Energy Minister Khalid Al-Falih said that KSA and Japanese officials will hold meetings to discuss Japanese investment into the planned initial public offering (IPO) of a small part of Riyadh-controlled Saudi Aramco. Saudi's Deputy Crown Prince, Mohammed bin Salman, unveiled ambitious plans earlier in 2016 aimed at ending the country's "addiction" to oil and transforming it into a global investment power. The IPO of less than 5% of state-run Aramco is a centerpiece of that effort. (Reuters)  KSA regulator forms interim committee to oversee builder MMG – Saudi Arabia's securities regulator said it would form a committee to oversee Mohammad Al Mojil Group (MMG) after the Saudi Arabian construction firm's board resigned when three people involved with the bus
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