QNBFS Daily Market Report September 19, 2017

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1. Page 1 of 6 QSE Intra-Day Movement Qatar Commentary The QSE Index declined 1.2% to close at 8,278.8. Losses were led by the Insurance and Transportation indices,…
  • 1. Page 1 of 6 QSE Intra-Day Movement Qatar Commentary The QSE Index declined 1.2% to close at 8,278.8. Losses were led by the Insurance and Transportation indices, falling 3.2% and 1.4%, respectively. Top losers were Qatar General Insurance & Reinsurance Company and Qatar First Bank, falling 9.9% and 2.9%, respectively. Among the top gainers, Al Khaleej Takaful Group rose 4.2%, while Islamic Holding Group was up 2.3%. GCC Commentary Saudi Arabia: The TASI Index fell 0.1% to close at 7,393.4. Losses were led by the Transportation and Insurance indices, falling 1.2% and 0.9%, respectively. Salama Cooperative Insurance Co. fell 5.9%, while SABB Takaful Co. was down 4.2%. Dubai: The DFM Index gained 0.8% to close at 3,660.5. The Consumer Staples index rose 5.5%, while the Financial and Investment Services index gained 1.8%. DXB Entertainments rose 6.2%, while Gulf General Investments Company was up 5.8%. Abu Dhabi: The ADX benchmark index rose 0.1% to close at 4,453.0. The Investment & Fin. Services index gained 2.1%, while the Telecom. index rose 0.9%. Al Khaleej Inv. gained 14.8%, while Sharjah Cement & Industrial Dev. was up 6.7%. Kuwait: The KSE Index declined 0.3% to close at 6,890.4. The Insurance and Oil & Gas indices declined 2.6% each. Gulf Franchising Holding Co. fell 12.1%, while Independent Petroleum Group was down 11.5%. Oman: The MSM Index fell 0.2% to close at 4,986.8. The Financial index declined 0.6%, while the other indices ended in green. Ominvest fell 5.9%, while Al Anwar Holding was down 2.6%. Bahrain: The BHB Index fell 0.1% to close at 1,298.5. The Insurance index declined 1.1%, while the Service index fell 0.2%. Nass Corporation declined 10.0%, while Arab Insurance Group was down 3.9%. QSE Top Gainers Close* 1D% Vol. ‘000 YTD% Al Khaleej Takaful Group 15.63 4.2 4.3 (25.9) Islamic Holding Group 43.51 2.3 23.6 (28.7) Investment Holding Group 7.27 1.5 2,439.7 (27.3) Dlala Brokerage & Inv. Holding Co. 17.21 1.3 1,480.2 (19.9) Qatar Islamic Insurance Co. 54.00 1.2 0.1 6.7 QSE Top Volume Trades Close* 1D% Vol. ‘000 YTD% Investment Holding Group 7.27 1.5 2,439.7 (27.3) Vodafone Qatar 8.15 (0.2) 2,251.1 (13.0) Dlala Brokerage & Inv. Holding Co. 17.21 1.3 1,480.2 (19.9) Ezdan Holding Group 10.85 0.6 1,107.5 (28.2) Qatar First Bank 6.42 (2.9) 1,091.2 (37.7) Market Indicators 18 Sep 17 17 Sep 17 %Chg. Value Traded (QR mn) 187.2 130.5 43.4 Exch. Market Cap. (QR mn) 452,484.9 456,543.5 (0.9) Volume (mn) 11.1 7.9 41.4 Number of Transactions 2,383 1,832 30.1 Companies Traded 40 42 (4.8) Market Breadth 9:29 12:28 – Market Indices Close 1D% WTD% YTD% TTM P/E Total Return 13,882.98 (1.2) (1.6) (17.8) 14.3 All Share Index 2,364.36 (1.0) (1.5) (17.6) 12.8 Banks 2,591.42 (1.0) (1.5) (11.0) 11.3 Industrials 2,491.44 (1.2) (1.9) (24.7) 16.6 Transportation 1,731.26 (1.4) (1.9) (32.0) 11.6 Real Estate 1,783.65 0.0 (1.0) (20.5) 12.1 Insurance 3,694.55 (3.2) (1.9) (16.7) 16.7 Telecoms 1,006.20 (0.1) (0.3) (16.6) 19.4 Consumer 5,001.44 (0.2) (1.2) (15.2) 11.9 Al Rayan Islamic Index 3,325.93 (0.9) (1.8) (14.3) 16.0 QSE Top Losers Close* 1D% Vol. ‘000 YTD% Qatar General Ins. & Reins. Co. 37.15 (9.9) 8.0 (21.0) Qatar First Bank 6.42 (2.9) 1,091.2 (37.7) Qatar Gas Transport Co. Ltd. 15.60 (2.8) 355.2 (32.4) Qatari Investors Group 37.00 (2.4) 23.9 (36.8) Salam International Inv. Ltd. 7.85 (2.4) 7.6 (29.0) QSE Top Value Trades Close* 1D% Val. ‘000 YTD% Dlala Brokerage & Inv. Holding Co 17.21 1.3 26,288.4 (19.9) Doha Bank 29.61 (1.3) 19,350.9 (12.1) Vodafone Qatar 8.15 (0.2) 18,315.5 (13.0) Investment Holding Group 7.27 1.5 17,813.7 (27.3) QNB Group 122.90 (0.6) 12,617.0 (17.0) 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* 8,278.76 (1.2) (1.6) (5.9) (20.7) 50.62 124,297.6 14.3 1.4 4.1 Dubai 3,660.48 0.8 0.1 0.6 3.7 67.72 105,818.8 24.3 1.4 3.9 Abu Dhabi 4,453.01 0.1 (0.6) (0.3) (2.1) 36.52 116,807.4 16.4 1.3 4.6 Saudi Arabia 7,393.39 (0.1) 0.3 1.9 2.5 839.79 464,533.0 18.1 1.7 3.2 Kuwait 6,890.37 (0.3) (0.3) (0.0) 19.9 69.43 101,806.3 18.2 1.2 5.3 Oman 4,986.83 (0.2) (0.3) (1.3) (13.8) 5.67 20,554.6 11.6 1.0 5.3 Bahrain 1,298.46 (0.1) (0.4) (0.3) 6.4 22.76 21,325.6 7.6 0.8 6.0 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) 8,250 8,300 8,350 8,400 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 1.2% to close at 8,278.8. The Insurance and Transportation indices led the losses. The index fell on the back of selling pressure from GCC and non-Qatari shareholders despite buying support from Qatari shareholders.  Qatar General Insurance & Reinsurance Company and Qatar First Bank were the top losers, falling 9.9% and 2.9%, respectively. Among the top gainers, Al Khaleej Takaful Group rose 4.2%, while Islamic Holding Group was up 2.3%.  Volume of shares traded on Monday rose by 41.4% to 11.1mn from 7.9mn on Sunday. Further, as compared to the 30-day moving average of 7.3mn, volume for the day was 52.5% higher. Investment Holding Group and Vodafone Qatar were the most active stocks, contributing 21.9% and 20.2% to the total volume, respectively. Source: Qatar Stock Exchange (* as a % of traded value) Global Economic Data Date Market Source Indicator Period Actual Consensus Previous 09/18 EU Eurostat CPI MoM August 0.3% 0.3% -0.5% 09/18 EU Eurostat CPI YoY August F 1.5% 1.5% 1.3% 09/18 EU Eurostat CPI Core YoY August F 1.2% 1.2% 1.2% Source: Bloomberg (s.a. = seasonally adjusted; n.s.a. = non-seasonally adjusted; w.d.a. = working day adjusted) News Qatar  Blockade not to influence QNB Group’s growth target – QNB Group has made it clear that the ongoing stand-off in the region has not diluted its growth targets. QNB Group’s CEO, Ali Ahmed Al Kuwari said, “Qatari economy is very strong, the banking system is solid. We have maintained our positions and are looking to our growth targets. QNB Group has not adjusted any of its strategies or aspirations.” Al Kuwari said that the bank sees opportunities coming from the ongoing conflict. These opportunities will help reposition Qatar as a very good strong trading hub. (Peninsula Qatar)  QATI announces it has not been possible to renew the business license for branch in Abu Dhabi – Qatar Insurance Company (QATI) announced that due to the prevailing political events in the region, it was not possible to renew the business license for the company's branch in the Emirate of Abu Dhabi, UAE. The company will have to close the branch, which has been engaged in insurance business since 2002 and its underwriting gross premium in this market with an estimated figure of around QR110mn per year. (QSE)  BMI: Funding pressures on Qatari banks due to GCC crisis manageable – Funding pressures within the Qatari banking system resulting from the ongoing Gulf diplomatic crisis will remain manageable, as local lenders retain extra-regional investor confidence and continue to benefit from strong sovereign support, according to BMI Research. Qatari lenders’ loan growth will remain robust over the coming years, driven by large scale public investments into infrastructure, BMI Research noted. Qatari banks are facing funding pressures as a result of the outflow of non-resident deposits sparked by the ongoing diplomatic crisis in the GCC region, it stated. BMI Research noted, “We nevertheless expect these pressures to remain manageable, as Qatari banks retain the ability to attract funding from a variety of extra-regional sources, and as the Qatar Central Bank (QCB) remains both willing and able to intervene to protect liquidity.” (Gulf-Times.com)  IIF: Qatar in a strong position despite 3 months of blockade – Three months into the economic blockade by some Arab countries, Qatar is seen weathering the siege and still remains in a strong position to meet domestic funding requirements, according to the Washington-based Institute of International Finance (IIF). IIF’s Chief Economist, (Middle East and North Africa) Garbis Iradian said, “Given the large public foreign assets, estimated at around $300bn (in the form of the sovereign wealth fund), the authorities in Qatar remain in a strong position to meet domestic funding requirements.” Although Qatari banks faced temporary funding pressure in recent months as some foreign financial institutions withdrew their deposits. IIF said, “We believe that further non-resident deposit declines will be limited.” Non-resident deposits in Qatari banks declined from $51bn in May 2017 to $43bn in July. Such deposits in Qatar accounted for 20.4% of total banks deposits in July, down from 24.2% in May. While few foreign banks withdrew their funds from Qatari banks, the liquidity injection by the Qatar Central Bank, and increased public sector deposits, have mitigated the impact on the balance sheets, the IIF added. (Gulf-Times.com)  ValuStrat: Qatar’s industrial real estate sector expected to excel in the next few years – Qatar’s industrial real estate sector is expected to excel in the next few years as the majority of World Overall Activity Buy %* Sell %* Net (QR) Qatari Individuals 46.81% 43.57% 6,064,754.71 Qatari Institutions 29.84% 27.33% 4,701,886.98 Qatari 76.65% 70.90% 10,766,641.69 GCC Individuals 1.36% 1.73% (704,991.55) GCC Institutions 1.90% 3.41% (2,827,257.25) GCC 3.26% 5.14% (3,532,248.80) Non-Qatari Individuals 6.20% 5.70% 933,659.74 Non-Qatari Institutions 13.89% 18.25% (8,168,052.63) Non-Qatari 20.09% 23.95% (7,234,392.89)
  • 3. Page 3 of 6 Cup related projects will be nearing completion, increasing the urgency to source materials on time, according to a ValuStrat report. The demand for industrial real estate has largely been driven by the growth of the manufacturing and construction sectors, ValuStrat noted. Consequently, ValuStrat noted there will be a rise in demand for logistics and storage of materials, for example, Qatar Public Works Authority forecasted that projects in the pipeline will require a growing total of 495mn tons of limestone and 126mn tons of gabbro out to 2022. Furthermore, it is expected that manufacturing output will pick up in the short run with the opening of a new refinery in Ras Laffan in December 2016, which is expected to increase the production of refined products, fertilizers and petrochemicals. Further, the expansion of North Field, the largest natural gas source in Qatar, is projected to enhance manufacturing output in the long term. (Gulf-Times.com)  Qatar to generate 500 MW solar power by 2020 – Qatar is set to generate 500 megawatt (MW) solar power by mid-2020 as the land for the project has already been allocated and the project cost will be around $500mn. Qatar Electricity and Water Company (QEWS) said that an area of land has been allocated for the project in Al Kharsaah, which is set to produce 500 to 1,000 MW. It will cost a total of nearly $500mn in the first phase with a capacity of 500 MW. (Peninsula Qatar)  Bayt.com, YouGov survey: Most Qataris expect business conditions to improve – More than three-quarters of Qatari respondents in a latest survey expect business conditions in Qatar to improve. The Middle East Job Seeker Confidence Survey was carried out by leading job site Bayt.com and global market research company, YouGov. Concentrating on the current availability of jobs, more than half (54%) of Qatari respondents believe that there are currently plenty of jobs available. Further, one in two respondents in Qatar (50%) are either ‘somewhat’ or very ‘hopeful’ that they will find their ideal job in the next six months. With regards to job satisfaction levels, 61% of Qatari respondents are satisfied with their career growth opportunities, while 21% are neutral. Over half (52%) of respondents in Qatar are satisfied with the level of job security that they have in their current organization and 18% are neutral. A similar pattern was seen when it came to training and professional development. A total of 51% of respondents said they are satisfied with this aspect, while 23% were neutral. (Gulf-Times.com)  Qatar-France trade volume exceeds QR7bn – The two-way trade volume between Qatar and France touched QR7bn in 2016, which has grown to nearly double as compared to QR3.62bn seen in 2014. The France-Qatar relationship is beyond trade and commerce; it is very deep and of great strategic importance. There are several elements and factors which France needs to maintain by extending its support to further deepen the healthy relationships with Qatar. (Peninsula Qatar) International  Homebuilder sentiment in the US falls in September – US homebuilders are feeling less optimistic about their sales prospects, reflecting concerns that rebuilding efforts following hurricanes Harvey and Irma will drive up costs for construction labor and materials. Even so, builders’ overall view of the new- home market remains positive. The National Association of Home Builders/Wells Fargo builder sentiment index released slipped to 64 this month. That’s down three points from a downwardly revised reading of 67 in August. (Peninsula Qatar)  Eurozone’s inflation confirmed at 1.5% in August – Eurozone’s headline inflation hit its highest level in four months in August, official data showed, confirming the European Union statistics office’s earlier flash estimate. Eurostat said consumer prices in the 19 countries sharing the Euro rose in August by 1.5% YoY and 0.3% MoM, in line with the average forecast of economists polled by Reuters. Inflation remained below the European Central Bank’s (ECB) target of near 2%, but picked up from 1.3% in July. Excluding the volatile components of unprocessed food and energy, an indicator closely watched by the ECB for its monetary decisions, the rate was 1.3% on the year. This matched a previous estimate released by Eurostat at the end of August, but was slightly above market expectations of a 1.2% reading. (Reuters)  Reuters survey: 10,000 UK finance jobs affected in Brexit's first wave – Around 10,000 finance jobs will be shifted out of Britain or created overseas in the next few years if the UK is denied access to Europe’s single market, according to a Reuters survey of firms employing the bulk of workers in international finance. Frankfurt was by far the most popular destination for the new roles, the survey showed, with Paris a distant second. The results from 123 firms came from the first comprehensive public survey to ask the biggest banks, insurers, asset managers, private equity firms and exchanges in Britain about the specific details of their plans so far in case of a so-called ‘hard’ Brexit. Nearly half of the companies surveyed told Reuters they would have to move staff or restructure their businesses because of Brexit, which is due to take place in March 2019. (Reuters)  China’s home price growth cools further in August as curbs bear down – China’s new home prices rose in August at the slowest pace in seven months and fell or leveled off in more cities, as government cooling measures dampened speculation, though there were no signs of a sharper correction that could damage the economy. Signs of a more stable and less frothy housing market, which is a key driver of economic growth, will be good news for the Communist Party as it prepares for a key meeting next month. Average new home prices in China’s 70 major cities rose 0.2% in August, half the pace of the previous month, National Bureau of Statistics (NBS) data showed. It is the first time in three years that prices in the 15 key markets singled out by the NBS - mostly mega-cities and provincial capitals - have all stopped rising on a monthly basis after nearly six months of intensified controls, analysts noted. (Reuters) Regional  Saudi Arabia’s crude exports fall in July to the lowest level in almost three years – Saudi Arabian crude shipments dropped in July to their lowest level in almost three years, as the world’s biggest oil exporter intensified efforts to curb supply to counter a global glut. The Kingdom pared monthly exports to 6.69mn barrels a day, the fewest since August 2014. The nation pumped 10.01mn barrels a day of crude in July, down from 10.07mn in June. (Bloomberg)  Saudi Arabia to mull phasing out gasoline subsidy by end- November – Saudi Arabia is considering a plan to phase out
  • 4. Page 4 of 6 subsidies for gasoline and jet fuel in November at the latest, as the world’s biggest oil exporter pushes a program to curtail spending after a global slump in prices. The government would boost gasoline to parity with varying international prices under the plan. At current levels, this could result in a hike of about 80% for octane-91 grade gasoline to about SR1.35 per liter, according to sources. The government plans to delay increase in other energy prices until early-2018. Authorities are expected to make a final decision on the plan in September or October. (Gulf-Times.com)  Saudi Arabia to seek bidders for 1,000-mile Red Sea-Gulf railway – Saudi Arabia plans to seek bidders for the construction of a 1,000-mile (1,600 kilometers) railroad linking the Red Sea with the Persian Gulf as early as the end of this year, signaling the go-ahead for a long-delayed project seen as vital to reduce the economy’s dependence on oil. The so-called Land Bridge line will shave around three days off the current five-day journey time for shipping seaborne freight around Saudi Arabia’s coast, while improving links to Riyadh and Jeddah, the nation’s two biggest cities. Saudi Railway Co.’s CEO, Bashar Al Malik said that contract tenders will be issued at the end of 2017 or early in 2018, following an encouraging response to an invitation for expressions of interest. (GulfBase.com)  SAGIA issued 158 licenses with total capital of SR3.258bn in 1H2017 – Saudi Arabian General Investment Authority (SAGIA) announced the results of its semi-annual report for 2017, which showed a 130% increase in issuance of licenses for investment projects compared to the same period in 2016. It pointed out that the number of licensed projects reached 158 during 1H2017, with total capital of SR3.258bn, compared to the issuance of 127 licenses with capital of SR1.392bn in 1H2016. (GulfBase.com)  PIF to host Future Investment Initiative in October 2017 – Saudi Arabia’s main investment arm and one of the world's leading sovereign wealth funds, Public Investment Fund (PIF) announced the launch of the Future Investment Initiative (FII) under the patronage of King Salman bin Abdulaziz Al-Saud. Hosted and organized by PIF, the FII will take place from October 24-26, 2017 in Riyadh. It will be a game-changing platform exploring the new trends, opportunities, challenges, and emerging industries that will shape the world economy and investment environment over the coming decades, according to a statement. The FII is being organized in the context of Saudi Arabia’s Vision 2030, a blueprint that is already charting the path for the Kingdom to harness its strategic location and strong investment capabilities. (GulfBase.com)  Value of Saudi Arabia’s hospitality projects to reach $2.5bn in 2017 – The year 2017 will be a record year for new hotels opening in Saudi Arabia, with hotels and leisure construction contractor awards set to reach $2.5bn by the end of the year, according to the Venture Onsite’s ‘GCC Hotels & Leisure Market’ report for the upcoming Big 5 Outdoor Design & Build Show. (GulfBase.com)  Saudi Telecom Company to invest $0.5bn venture capital fund mainly in the region – Saudi Telecom Company (STC) will first invest its $0.5bn venture capital fund mainly in the region and then look abroad, its CEO said. Speaking on the sidelines of Telecoms World Middle East 2017 conference in Dubai,
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