QNBFS Daily Market Report October 29, 2017

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The QSE Index rose marginally to close at 8,128.3. Gains were led by the Consumer Goods & Services and Industrials indices, gaining 1.6% and 0.3%, respectively.
  • 1. Page 1 of 7 QSE Intra-Day Movement Qatar Commentary The QSE Index rose marginally to close at 8,128.3. Gains were led by the Consumer Goods & Services and Industrials indices, gaining 1.6% and 0.3%, respectively. Top gainers were Qatar Islamic Insurance Co. and Qatar Fuel, rising 6.8% and 3.7%, respectively. Among the top losers, Al Khaleej Takaful Group fell 4.0%, while Qatar National Cement Co. was down 3.0%. GCC Commentary Saudi Arabia: The TASI Index rose 0.1% to close at 6,910.7. Gains were led by the Pharma, Biotech. and Real Estate Mgmt indices, rising 1.5% and 1.4%, respectively. The Mediterranean & Gulf Ins. & Reins. and Tabuk Cement Co. were up 9.9% each. Dubai: The DFM Index declined 0.4% to close at 3,651.1. The Real Estate & Construction index fell 0.8%, while the Consumer Staples index declined 0.7%. Islamic Arab Insurance Company fell 1.6%, while Emaar Malls was down 1.3%. Abu Dhabi: The ADX benchmark index fell 0.7% to close at 4,467.7. The Investment & Financial Serv. index declined 1.5%, while the Consumer Staples index fell 1.4%. Gulf Cement Co. declined 6.5%, while Abu Dhabi Aviation Co. was down 6.4%. Kuwait: The KSE Index rose marginally to close at 6,623.5. The Technology index gained 4.2%, while the Basic Materials index rose 1.0%. Kuwait & Middle East Financial Inv. gained 17.0%, while Umm Al Qaiwain General Inv. Co. was up 12.9%. Oman: The MSM Index fell 0.8% to close at 4,958.6. Losses were led by the Financial and Industrial indices, falling 0.7% and 0.4%, respectively. Oman Telecommunication fell 3.3%, while Alizz Islamic Bank was down 3.0%. Bahrain: The BHB Index fell 0.1% to close at 1,277.4. The Commercial Banks index declined 0.3%, while the Services index fell 0.2%. Ithmaar Holding declined 3.9%, while BBK was down 2.0%. QSE Top Gainers Close* 1D% Vol. ‘000 YTD% Qatar Islamic Insurance Co. 51.09 6.8 0.5 1.0 Qatar Fuel 96.70 3.7 30.7 (27.5) United Development Co. 13.16 3.1 844.8 (36.3) Qatar German Co. for Med. Devices 7.00 2.9 7.1 (30.7) Islamic Holding Group 34.60 2.7 2.4 (43.3) QSE Top Volume Trades Close* 1D% Vol. ‘000 YTD% United Development Co. 13.16 3.1 844.8 (36.3) Vodafone Qatar 7.00 (1.5) 511.2 (25.3) Qatar Electricity & Water Co. 182.00 1.1 404.2 (19.8) Qatar First Bank 6.37 (0.5) 257.4 (38.2) Investment Holding Group 6.91 1.6 185.2 (30.9) Market Indicators 26 Oct 17 25 Oct 17 %Chg. Value Traded (QR mn) 150.6 180.6 (16.6) Exch. Market Cap. (QR mn) 442,198.6 442,330.2 (0.0) Volume (mn) 3.8 8.4 (55.1) Number of Transactions 2,059 2,192 (6.1) Companies Traded 41 44 (6.8) Market Breadth 19:19 16:25 – Market Indices Close 1D% WTD% YTD% TTM P/E Total Return 13,630.60 0.0 (0.5) (19.3) 12.9 All Share Index 2,273.81 (0.1) (1.0) (20.7) 12.6 Banks 2,557.91 0.1 (0.4) (12.2) 13.0 Industrials 2,515.43 0.3 (0.3) (23.9) 16.9 Transportation 1,661.25 (1.3) (3.1) (34.8) 12.4 Real Estate 1,571.87 (1.5) (0.3) (30.0) 10.6 Insurance 2,964.69 (0.5) (4.7) (33.2) 20.0 Telecoms 1,023.90 (0.2) (1.2) (15.1) 20.1 Consumer 4,860.77 1.6 (2.4) (17.6) 11.3 Al Rayan Islamic Index 3,183.02 (0.2) (1.8) (18.0) 13.8 GCC Top Gainers ## Exchange Close # 1D% Vol. ‘000 YTD% Makkah Const. & Dev. Co Saudi Arabia 75.76 5.9 217.6 (16.4) Dar Al Arkan Real Estate. Saudi Arabia 7.56 3.4 34,828.2 22.7 Qurain Petrochem. Ind. Co Kuwait 0.33 3.1 94.5 43.5 Yanbu Cement Co. Saudi Arabia 28.06 3.0 1,026.2 (30.7) National Shipping Co. Saudi Arabia 28.51 2.9 695.2 (34.3) GCC Top Losers ## Exchange Close # 1D% Vol. ‘000 YTD% Saudi Telecom Co. Saudi Arabia 65.23 (4.1) 549.8 (10.1) Mobile Telecom. Co. Saudi Arabia 6.35 (4.1) 16,458.9 (23.4) DP World Ltd. Dubai 23.53 (4.0) 125.9 34.4 Oman Telecom. Co. Oman 1.16 (3.3) 81.6 (23.4) VIVA Kuwait Telecom Co. Kuwait 0.75 (2.8) 47.4 (19.0) 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% Al Khaleej Takaful Group 11.81 (4.0) 0.1 (44.0) Qatar National Cement Co. 61.00 (3.0) 11.5 (22.0) Ezdan Holding Group 9.20 (2.5) 66.3 (39.1) Qatar Navigation 54.00 (1.8) 63.4 (43.5) Vodafone Qatar 7.00 (1.5) 511.2 (25.3) QSE Top Value Trades Close* 1D% Val. ‘000 YTD% Qatar Electricity & Water Co. 182.00 1.1 72,750.2 (19.8) United Development Co. 13.16 3.1 11,035.7 (36.3) QNB Group 121.80 (0.2) 9,900.0 (17.8) Qatar Islamic Bank 96.30 1.4 4,588.8 (7.3) Commercial Bank 26.30 (0.4) 4,526.6 (15.0) 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* 8,128.25 0.0 (0.5) (2.2) (22.1) 39.57 121,471.9 12.9 1.2 4.8 Dubai 3,651.10 (0.4) (0.6) 2.4 3.4 117.75 103,293.9 24.0 1.3 3.9 Abu Dhabi 4,467.72 (0.7) (0.8) 1.6 (1.7) 38.77 117,023.8 16.3 1.3 4.5 Saudi Arabia 6,910.65 0.1 (1.4) (5.1) (4.2) 677.24 435,245.6 16.5 1.6 3.5 Kuwait 6,623.49 0.0 (0.1) (0.8) 15.2 60.37 97,588.5 18.0 1.2 5.2 Oman 4,958.57 (0.8) (2.1) (3.5) (14.3) 6.21 20,467.1 11.9 1.0 5.3 Bahrain 1,277.38 (0.1) (0.1) (0.5) 4.7 1.39 20,099.4 7.2 0.8 6.1 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) 8,090 8,100 8,110 8,120 8,130 8,140 9:30 10:00 10:30 11:00 11:30 12:00 12:30 13:00
  • 2. Page 2 of 7 Qatar Market Commentary  The QSE Index rose marginally to close at 8,128.3. Consumer Goods & Services and Industrials indices led the gains. The index rose on the back of buying support from GCC and non-Qatari shareholders despite selling pressure from Qatari shareholders.  Qatar Islamic Insurance Co. and Qatar Fuel were the top gainers, rising 6.8% and 3.7%, respectively. Among the top losers, Al Khaleej Takaful Group fell 4.0%, while Qatar National Cement Co. was down 3.0%.  Volume of shares traded on Thursday fell by 55.1% to 3.8mn from 8.4mn on Wednesday. Further, as compared to the 30-day moving average of 8.7mn, volume for the day was 57.0% lower. United Development Co. and Vodafone Qatar were the most active stocks, contributing 22.5% and 13.6% to the total volume, respectively. Source: Qatar Stock Exchange (* as a % of traded value) Ratings, Earnings Releases, Global Economic Data and Earnings Calendar Ratings Updates Company Agency Market Type* Old Rating New Rating Rating Change Outlook Outlook Change Burgan Bank CI Kuwait FLT/FST/SR A-/A2/2 A/A1/1  Stable – Source: News reports (* LT – Long Term, ST – Short Term, FSR- Financial Strength Rating, FCR – Foreign Currency Rating, LCR – Local Currency Rating, IDR – Issuer Default Rating, SR – Support Rating, LC – Local Currency, FLT – Foreign Long Term, FST – Foreign Short Term) Earnings Releases Company Market Currency Revenue (mn) 3Q2017 % Change YoY Operating Profit (mn) 3Q2017 % Change YoY Net Profit (mn) 3Q2017 % Change YoY Basic Chemical Industries Co. Saudi Arabia SR – – 18.8 24.5% 8.3 13.3% Electrical Industries Co. Saudi Arabia SR – – 13.3 -15.5% 11.4 9.1% Saudi Telecom Co. Saudi Arabia SR – – 2,954.0 22.9% 2,621.0 18.2% Zamil Industrial Investment Co. Saudi Arabia SR – – 41.1 -44.4% 21.9 -46.7% Agthia Group Abu Dhabi AED 499.0 4.4% 48.1 -16.5% 46.5 -15.2% Source: Company data, DFM, ADX, MSM, TASI, BHB. Global Economic Data Date Market Source Indicator Period Actual Consensus Previous 10/26 US Department of Labor Initial Jobless Claims 21-October 233k 235k 223k 10/26 US Department of Labor Continuing Claims 14-October 1,893k 1,890k 1,896k 10/26 Germany GfK AG GfK Consumer Confidence November 10.7 10.8 10.8 10/27 France INSEE Consumer Confidence October 100 101 101 10/26 Japan Bank of Japan PPI Services YoY September 0.9% 0.8% 0.8% 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 3Q2017 results No. of days remaining Status SIIS Salam International Investment Limited 29-Oct-17 0 Due ORDS Ooredoo 29-Oct-17 0 Due MPHC Mesaieed Petrochemical Holding Company 29-Oct-17 0 Due MCCS Mannai Corporation 30-Oct-17 1 Due ERES Ezdan Holding Group 30-Oct-17 1 Due AHCS Aamal Company 30-Oct-17 1 Due ZHCD Zad Holding Company 30-Oct-17 1 Due Source: QSE Overall Activity Buy %* Sell %* Net (QR) Qatari Individuals 20.39% 22.04% (2,482,316.52) Qatari Institutions 54.51% 57.18% (4,018,226.22) Qatari 74.90% 79.22% (6,500,542.74) GCC Individuals 0.73% 0.47% 383,105.22 GCC Institutions 3.01% 2.72% 438,399.70 GCC 3.74% 3.19% 821,504.92 Non-Qatari Individuals 6.62% 5.31% 1,972,828.49 Non-Qatari Institutions 14.74% 12.28% 3,706,209.33 Non-Qatari 21.36% 17.59% 5,679,037.82
  • 3. Page 3 of 7 News Qatar  GISS’ 3Q2017 operating results come in line with our forecast; reported net income of QR6.37mn misses due to other items – Gulf International Services (GISS) reported net profit of QR6.37mn in 3Q2017 as compared to QR0.74mn in 2Q2017 and vs. our forecast of QR20.76mn; net profit was down 77.5% YoY. The company does not provide basic segment details except for 1H and fiscal year-end reporting periods, so we can only analyze overall numbers, which were broadly in line in terms of revenue, gross profitability and EBITDA. (1) The company's revenue came in at QR620.40mn in 3Q2017 (-4.2% QoQ, -12.9% YoY) vs. our forecast of QR643.81mn (variance of -3.6%). (2) Gross profit came in QR96.0mn vs. our modeled figure of QR91.40mn (differential was +5%) implying costs improved vs. our model despite the slightly lower revenue figure. (3) EBITDA of QR196.87mn was in-line at around +3.9% vs. our estimate of QR189.53mn (actual 3Q2017 EBITDA margin 31.7% vs. our forecast of 29.4% and 27.2% in 2Q2017). The miss vs. our bottom-line forecast came entirely from higher-than-expected net financial expenses, somewhat surprising as overall debt increased marginally sequentially. According to the company’s trading statement, while the aviation and drilling segments maintained fairly the same revenue as previous year (9M basis), the catering and insurance segments faced challenges due to the fierce competition resulting in lower revenue in these segments compared to previous year. Initiatives are underway to address the challenges faced by these two segments. Cash position remained strong with closing cash of QR1.1bn across all group companies. We continue to rate GISS a Market Perform. (QNBFS Research, Company financials, Gulf- Times.com)  QP consortium wins bid for oil exploration offshore Brazil – A consortium comprising Qatar Petroleum (QP), Shell, and China National Offshore Oil Corporation (CNOOC) was selected as the winning bidder for the Alto de Cabo Frio-Oeste block in the prolific Santos hydrocarbon basin offshore Brazil. The block was offered as part of Brazil's 3rd production sharing bidding round, which covered some four blocks located in the ‘pre-salt polygon’ region in the Santos and Campos basins: Pau Brasil, Peroba, Alto de Cabo Frio-Oeste, and Alto de Cabo Frio-Central, Qatar Petroleum announced. The selection results were announced by Brazil's National Agency of Petroleum, Natural Gas and Biofuels (ANP) at the public bidding session held in Rio de Janeiro, during which participants submitted their bids for the various blocks on offer and the winners of each block were announced upon opening of the bids at the same event. (Gulf- Times.com)  MDPS: Qatar’s general PPI rises 5% MoM in September – Qatar’s general Producer Price Index (PPI) increased 5% in September when compared with previous month, according to the Ministry of Development Planning and Statistics (MDPS). General PPI of September increased by 17.8% when compared with the same period last year, MDPS stated. Qatar’s monthly Producer Price Index (PPI) has shown an increase of 5.1% in September in the mining segment compared with August, the Ministry of Development Planning and Statistics (MDPS) noted, citing the increase of prices of crude petroleum and natural gas as the reason. An increase of 5% has been recorded in September when compared with the previous month’s manufacturing index. The price increase is seen in refined petroleum products (by 6.4%), basic chemicals (4.6%), basic metals (1.8%), paper and paper products (1.5%), grain mill and other products (0.1%). (Gulf-Times.com)  Qatar banks stay strong in tough season – The total profits of Qatari banks-excluding Al-Khalij Commercial Bank-rose 3% to QR16.11bn for the first nine months of 2017, from a year ago. Despite tough times, the country’s banking system is going strong, according to latest data. The non-performing loan was only 1.5% of the total loans. The ratio of loan provision to non- performing loans was 82.1%, i.e almost full coverage of non- performing loans, The Group analysts noted in their reading of the banks’ balance sheets for the months ended September. The banks’ assets (and liabilities) have increased by QR19bn to QR1336.8bn by the end of September from the previous month, reflecting 11.9% growth on YoY. Government and public sector deposits were increased by around QR7.3bn to reach the level of QR 302.7bn. The breakdown shows the government deposits stood at QR105.2bn, while the government institutions’ deposit touched QR165.7bn. The semi-government institutions’ deposits reached QR31.7bn. On the other hand, government and the public sector’s total loans decreased about QR5.1bn to reach QR328.9bn. Government loans were down by QR4.5bn to QR167.8bn as credits to the governmental institutions’ remained stable at QR146.2bn. Loans to the Semi-governmental institutions slipped by QR0.6bn to QR14.9bn. (Peninsula Qatar)  Qatar bourse aims for futures trading, short-selling by 2018-end – The Qatar Stock Exchange (QSE) is looking to roll out futures trading and short-selling by the end of 2018, QSE’s CEO, Rashid Ali Al Mansoori said, part of a bid to boost liquidity and encourage more IPOs in the next year. Qatar’s benchmark stock index has fallen about 18% since early June, but the index has stabilized since then. Al-Mansoori told Reuters in an interview that Qatar wanted to develop its financial markets despite the Gulf crisis. He said the exchange was in the early stages of introducing futures and short-selling, which could start in late 2018, and market making that would boost liquidity was “awaiting final approval” from the regulator. These tools could encourage IPO activity amid a single listing in the past three years, namely Investment Holding Group’s $138mn offering of 60% of its share capital in August. Investment Holding Group was the first family business in Qatar to list its shares. (Gulf- Times.com)  Quality Group launches operations in Malaysia – Qatar- headquartered Quality Group International has announced its first East Asian business venture in Malaysia. The “handing over of the project was formally received” by Shamsudheen Olakara, Chairman, Quality Group, from Ikmal Hisham Bin Abdul Aziz, Chairman, Majlis Amanah Rakyat (Mara Inc) Group. The event witnessed the signing of various agreements in the presence of the attendees including local officials. The first outlet as part of the collaboration, due to start functioning in Malacca, boasts of a 127,000 sq ft hypermarket. (Gulf- Times.com)
  • 4. Page 4 of 7  QFBQ reports net loss of QR62.93mn in 3Q2017 – Qatar First Bank (QFBQ) reported net loss of QR62.93mn in 3Q2017 as compared to net loss of QR67.11mn in 2Q2017 and QR13.44mn in 3Q2016. The company’s total income increased 37.6% QoQ in 3Q2017 to QR87.10mn. However, on YoY basis total income declined 36.5%. The bank's total assets stood at QR5.54bn at the end of September 30, 2017, down 2% QoQ (-18.7% YoY and - 7.4% YTD). Financing assets were QR1.55bn, registering a rise of 2.8% QoQ (+6.7% YoY and 5.5% YTD) at the end of September 30, 2017. Financing liabilities rose 35.4% QoQ to reach QR0.80bn at the end of September 30, 2017. However, financing liabilities fell 26.1% YoY and 27.5% YTD. Loss per share amounted to QR0.32 in 3Q2017 as compared to QR0.33 in 2Q2017. (QSE)  AKHI’s net profit narrows to QR0.18mn in 3Q2017 – Al Khaleej Takaful Group (AKHI) reported net profit of QR0.18mn in 3Q2017 as compared to QR2.58mn in 2Q2017. The company's total shareholders revenue came in at QR16.74mn in 3Q2017, which represents an increase of 23% QoQ (+36.1% YoY). Earnings per share amounted to QR0.65 in 9M2017 as compared to QR0.73 in 9M2016. (QSE)  QOIS’ net profit declines 99.6% QoQ in 3Q2017 – Qatar Oman Investment Company's (QOIS) net profit declined 99.6% QoQ to QR0.004mn in 3Q2017. The Company’s net investment and interest income came in at QR1.1mn in 3Q2017, which represents a decrease of 55.9% QoQ. However, on YoY basis net investment and interest income rose 29.2%. EPS amounted to QR0.335 in 9M2017 as compared to QR0.403 in 9M2016. (QSE)  QGMD posts net loss of QR2mn in 3Q2017 – Qatari German Company for Medical Devices (QGMD) reported net loss of ~QR2mn in 3Q2017 as compared to QR2.1mn in 2Q2017. Loss per share amounted to QR0.55 in 9M2017 as compared to QR0.45 in 9M2016. (QSE)  Sale of treasury shares of Aamal owned by Gulf Rocks Company – Aamal company disclosure form in accordance with Article (15) of the aforementioned regulation pertaining to the sale of the treasury shares of Aamal Company owned by Gulf Rocks Company. We shall observe the application of Articles (14) and (16) of the aforementioned regulation when executing the sale of the treasury shares as authorized by QFMA’s directives to Aamal Company on this matter. (QSE) International  US jobless claims rise modestly as labor market tightens – The number of Americans filing for unemployment benefits increased less than expected last week, suggesting the labor market continued to tighten after recent hurricane-related disruptions. Other reports, however, offered a less favorable look at the economy. The goods trade deficit widened in September and retail inventories fell, prompting the Atlanta Federal Reserve to trim its third-quarter GDP growth estimate. In addition, signed contracts to buy previously-owned homes were unchanged last month. (Reuters)  S&P and Fitch leave UK’s credit rating on hold but warn on Brexit – Standard and Poor’s (S&P) and Fitch left their credit ratings for Britain unchanged but remained gloomy about the outlook due to the likelihood of the country reaching a bad deal in its divorce talks with the European Union. Having already stripped Britain of its top-notch ‘AAA’rating, both agencies stuck with their ‘AA’rating for Britain but warned they were likely to downgrade again. S&P stated that the ‘Negative’ outlook reflects the continued institutional and economic uncertainty surrounding the Brexit negotiations and the UK’s future relationship with its largest market for goods and services, the European Union. A further downgrade could come if S&P views the risk of a disorderly Brexit as increasingly certain or if overseas investors start to withdraw the capital that finances Britain’s large current account deficit. Fitch said the lack of a clear British position and the EU’s negotiating stance, not to mention a lack of time before the March 2019 departure date, would make it hard for Britain to emerge with a favorable deal. (Reuters)  CBI: UK’s retail sales rose at fastest rate since 2009 – British retail sales increased in October at the fastest pace since early 2009 when the country was last in recession, according to a survey that could deepen economists’ doubts about the wisdom of raising interest rates next week. With the economy having perked up slightly in the third quarter, it looks very likely that the Bank of England will in a week’s time deliver Britain’s first rate hike in more than a decade. That majority view was bolstered data from the Confederation of British Industry (CBI), which stated its monthly retail sales gauge fell to -36 this month from a two-year high of +42 in September, marking its lowe
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