12 June Daily market report

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  • 1. Page 1 of 7 QE Intra-Day Movement Qatar Commentary The QE index rose 0.5% to close at 12,978.9. Gains were led by the Transportation and Banking & Financial Services indices, gaining 1.0% and 0.7% respectively. Top gainers were Qatar Cinema & Film Dist. Co. and Zad Holding Co., rising 10.0% and 4.3% respectively. Among the top losers, Qatar & Oman Investment Co. fell 1.5%, while Qatar Islamic Ins. Co. declined 1.4%. GCC Commentary Saudi Arabia: The TASI index fell 0.5% to close at 9826.7. The Media and Publishing index declined 4.8%, while the Real Estate Dev. index was down 1.1%. Tihama fell 9.9%, while Al Jazira Takaful Taawuni Co. was down 3.8%. Dubai: The DFM index gained 3.7% to close at 4836.9. The Services index gained 10.9%, while the Real Estate & Construction index rose 5.7%. Arabtec Holding gained 11.1%, while National Central Cooling was up 10.9%. Abu Dhabi: The ADX benchmark index rose 1.1% to close at 4,931.8. The Real Estate index gained 4.4%, while the Inv. & Fin. Ser. index was up 2.1%. Al Buhaira Nat. Ins. Co. surged 14.9%, while Int. Fish Farming gained 13.7%. Kuwait: The KSE index fell 0.5% to close at 7,244.1. The Health Care and Technology indices declined 4.1% and 3.5% respectively. Shuaiba Industrial Co. fell 8.8%, while Yiaco Medical Co. was down 7.1%. Oman: The MSM index declined 0.2% to close at 6,907.6. Losses were led by the Financial and Industrial indices, declining 0.3% and 0.2% respectively. The Oman Filters Industry fell 42.9%, while Dhofar Insurance was down 2.9%. Bahrain: The BHB index gained 0.2% to close at 1,460.0. The Commercial Banking and Investment indices rose 0.4% each. Esterad Investment Co. gained 8.9%, while Al Salam Bank was up 3.6%. Qatar Exchange Top Gainers Close* 1D% Vol. ‘000 YTD% Qatar Cinema & Film Dist. Co. 47.40 10.0 7.3 18.2 Zad Holding Co. 80.30 4.3 81.4 15.5 Al Khaleej Takaful Group 44.00 3.8 734.9 56.7 Dlala Brokerage & Inv. Hold. Co. 53.80 3.5 104.0 143.4 Gulf International Services 93.70 3.2 781.8 92.0 Qatar Exchange Top Vol. Trades Close* 1D% Vol. ‘000 YTD% Masraf Al Rayan 53.90 1.7 2,248.0 72.2 Ezdan Holding Group 21.75 0.7 1,775.8 27.9 United Development Co. 24.90 0.0 1,226.8 15.7 Vodafone Qatar 20.05 (0.7) 842.1 87.2 Gulf International Services 93.70 3.2 781.8 92.0 Market Indicators 12 Jun 14 11 Jun 14 %Chg. Value Traded (QR mn) 610.9 659.9 (7.4) Exch. Market Cap. (QR mn) 705,094.8 702,000.0 0.4 Volume (mn) 12.8 14.9 (14.5) Number of Transactions 6,916 7,677 (9.9) Companies Traded 43 43 0.0 Market Breadth 23:16 16:24 – Market Indices Close 1D% WTD% YTD% TTM P/E Total Return 19,354.28 0.5 (1.9) 30.5 N/A All Share Index 3,281.58 0.5 (1.5) 26.8 15.7 Banks 3,161.19 0.7 (2.1) 29.4 15.7 Industrials 4,302.71 0.5 (0.4) 22.9 16.8 Transportation 2,270.15 1.0 (0.7) 22.2 14.6 Real Estate 2,736.97 0.1 (2.2) 40.1 13.7 Insurance 3,386.02 (0.5) 1.5 44.9 8.9 Telecoms 1,773.38 (0.2) (3.8) 22.0 24.5 Consumer 6,832.26 0.5 (1.7) 14.9 26.9 Al Rayan Islamic Index 4,340.99 0.2 (2.5) 43.0 18.8 GCC Top Gainers## Exchange Close# 1D% Vol. ‘000 YTD% Arabtec Holding Co. Dubai 5.00 11.1 189,822.6 150.6 United Real Estate Co. Kuwait 0.12 9.4 167.0 1.0 Deyaar Development Dubai 1.28 5.8 53,719.5 30.2 Dubai Islamic Bank Dubai 7.30 4.6 19,304.9 39.9 Aldar Properties Abu Dhabi 4.11 4.1 48,261.6 53.0 GCC Top Losers## Exchange Close# 1D% Vol. ‘000 YTD% Tihama Saudi Arabia 154.50 (10.0) 18.9 44.6 Kuwait Finance Kuwait 0.79 (2.5) 2,147.8 14.7 Saudi Hotels & Resort Saudi Arabia 39.90 (2.5) 635.7 19.3 Aramex Dubai 3.25 (2.1) 578.3 9.8 Petro Rabigh Saudi Arabia 31.90 (2.0) 2,091.4 35.1 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) Qatar Exchange Top Losers Close* 1D% Vol. ‘000 YTD% Qatar & Oman Investment Co. 15.02 (1.5) 294.2 20.0 Qatar Islamic Insurance Co. 74.90 (1.4) 13.5 29.4 Qatar Insurance Co. 79.20 (1.0) 37.8 48.9 Doha Bank 60.40 (1.0) 272.8 3.8 Gulf Warehousing Co. 53.00 (0.9) 8.6 27.7 Qatar Exchange Top Val. Trades Close* 1D% Val. ‘000 YTD% Masraf Al Rayan 53.90 1.7 120,206.1 72.2 Gulf International Services 93.70 3.2 73,688.0 92.0 Industries Qatar 180.90 (0.2) 72,882.7 7.1 Ezdan Holding Group 21.75 0.7 38,045.0 27.9 Al Khaleej Takaful Group 44.00 3.8 32,057.2 56.7 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* 12,978.86 0.5 (1.9) (5.2) 25.0 167.80 193,689.6 16.2 2.2 3.8 Dubai 4,836.86 3.7 (5.2) (4.9) 43.5 582.56 95,073.9 19.4 1.9 2.2 Abu Dhabi 4,931.78 1.1 (2.4) (6.1) 15.0 157.56 137,107.1 14.5 1.8 3.4 Saudi Arabia 9,826.67 (0.5) (0.3) 0.0 15.1 2,361.84 532,407.9 19.6 2.4 2.9 Kuwait 7,244.13 (0.5) (1.3) (0.6) (4.0) 63.03 113,512.5 16.5 1.1 3.8 Oman 6,907.55 (0.2) (0.7) 0.7 1.1 8.50 25,038.2 12.5 1.7 3.8 Bahrain 1,459.95 0.2 (0.1) 0.0 16.9 6.35 53,919.4 11.4 1.0 4.7 Source: Bloomberg, Qatar Exchange, Tadawul, Muscat Securities Exchange, Dubai Financial Market and Zawya (** TTM; * Value traded ($ mn) do not include special trades, if any) 12,850 12,900 12,950 13,000 13,050 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 QE index rose 0.5% to close at 12,978.9. The Transport. and Banking & Fin. Ser. indices led the gains. The index rose on the back of buying support from Qatari shareholders despite selling pressure from non-Qatari shareholders.  Qatar Cinema & Film Dist. Co. and Zad Holding Co. were the top gainers, rising 10.0% and 4.3% respectively. Among the top losers, Qatar & Oman Investment Co. fell 1.5%, while Qatar Islamic Ins. Co. declined 1.4%.  Volume of shares traded on Thursday fell by 14.5% to 12.8mn from 14.9mn on Wednesday. Further, as compared to the 30-day moving average of 26.8mn, volume for the day was 52.3% lower. Masraf Al Rayan and Ezdan Holding Group were the most active stocks, contributing 17.6% and 13.9% to the total volume respectively. Source: Qatar Exchange (* as a % of traded value) Ratings and Global Economic Data Ratings Updates Company Agency Market Type* Old Rating New Rating Rating Change Outlook Outlook Change Mashreq Bank S&P Dubai LT/ST CCR BBB+/A-2 BBB+/A-2 – Positive  Source: News reports (* LT – Long Term, ST – Short Term, FSR- Financial Strength Rating, FCR – Foreign Credit Rating, LCR – Local Currency Rating, IDR – Issuer Default Rating, SR – Support Rating, LC – Local Currency, CCR – Counterparty Credit Rating) Global Economic Data Date Market Source Indicator Period Actual Consensus Previous 06/12 US BLS Import Price Index MoM May 0.10% 0.20% -0.50% 06/12 US BLS Import Price Index YoY May 0.40% 0.50% -0.40% 06/12 US Department of Labor Initial Jobless Claims 7-June 317K 310K 313K 06/12 US Bloomberg Bloomberg Consumer Comfort 8-June 35.5 – 35.1 06/12 US US Census Bureau Business Inventories April 0.60% 0.40% 0.40% 06/13 US BLS PPI Final Demand MoM May -0.20% 0.10% 0.60% 06/13 US BLS PPI Ex Food and Energy MoM May -0.10% 0.10% 0.50% 06/13 US BLS PPI Final Demand YoY May 2.00% 2.40% 2.10% 06/13 US BLS PPI Ex Food and Energy YoY May 2.00% 2.30% 1.90% 06/12 EU Eurostat Industrial Production SA MoM April 0.80% 0.50% -0.40% 06/12 EU Eurostat Industrial Production WDA YoY April 1.40% 0.90% 0.20% 06/13 EU Eurostat Trade Balance SA April 15.8B – 15.4B 06/13 EU Eurostat Trade Balance NSA April 15.7B 16.3B 16.7B 06/13 EU Eurostat Employment QoQ 1Q2014 0.10% – 0.10% 06/13 EU Eurostat Employment YoY 1Q2014 0.20% – -0.40% 06/12 France INSEE CPI EU Harmonized YoY May 0.80% 0.80% 0.80% 06/12 France INSEE CPI MoM May 0.00% 0.10% 0.00% 06/12 France INSEE CPI YoY May 0.70% 0.70% 0.70% 06/13 UK UK ONS Construction Output SA MoM April 1.20% 1.50% -0.20% 06/13 UK UK ONS Construction Output SA YoY April 4.60% 2.90% 6.80% 06/13 Spain INE CPI Core MoM May 0.10% – 1.00% 06/13 Italy Banca D'Italia General Government Debt April 2146.4B – 2120.1B 06/13 China NBS Industrial Production YTD YoY May 8.70% 8.70% 8.70% 06/13 China NBS Industrial Production YoY May 8.80% 8.80% 8.70% Source: Bloomberg (s.a. = seasonally adjusted; n.s.a. = non-seasonally adjusted; w.d.a. = working day adjusted) Overall Activity Buy %* Sell %* Net (QR) Qatari 67.59% 67.09% 3,066,349.91 Non-Qatari 32.41% 32.92% (3,066,349.91)
  • 3. Page 3 of 7 News Qatar  CBQK files updated base prospectus for EMTN program to Irish Stock Exchange – The Commercial Bank of Qatar (CBQK) announced that it has filed to the Irish Stock Exchange its updated Base Prospectus dated June 10, 2014 relating to CBQK and its subsidiary, CBQ Finance Limited’s, $5.0bn Euro Medium Term Note Program guaranteed by CBQK (in the case of Notes issued by CBQ Finance Limited). CBQK, rated A1 by Moody’s, A- by S&P and A by Fitch, has mandated BofA Merrill Lynch, HSBC and Morgan Stanley to arrange on its behalf a series of meetings targeting fixed income investors. A USD benchmark Reg S transaction may follow subject to market conditions. (QE)  MDPS: Huge rise in Qatari household spending – According to the “Social Statistics 2003-2012” survey by the Ministry of Development, Planning and Statistics (MDPS), average monthly expenditure for Qatari households increased by 82.2% from QR22,400 to QR40,800. Among Qatari households, housing took up the biggest share (29.3% of total expenditure per month), in contrast to 17.6% in 2001, followed by transport expenditure 13.8% and different goods as well as services expenditure 13.3%. Culture, recreation and transport were the sectors where the proportion of Qatari households’ expenditure increased (4.6% in 2007 compared to 2.4% in 2001), whereby it decreased for food and drinks (11.2% in 2007 compared with 17.5% in 2001). The survey found that there was a 45.9% increase in the average monthly household expenditure for non- Qataris, from 9,100 in 2001 to 13,300 in 2007. (Peninsula Qatar)  Kahramaa to launch giant desalination plants – Qatar General Electricity & Water Corporation (Kahramaa) is set to launch two giant desalination plants. The first plant with a production capacity of 35mn gallons will be launched at Abu Fatas in May 2015. Kahramaa’s Director Ali Saif Al Malki said that the second desalination plant will be launched in 2017, with a capacity of 130mn gallons. These plants will help Kahramaa to ensure smooth distribution of piped water for several days, in the event of any unprecedented event hitting the production chain. (Peninsula Qatar)  Enterprise Qatar offers new SMEs rating, accreditation program – Qatar’s small and medium enterprises (SMEs) development company, Enterprise Qatar is now offering a new SME Rating & Accreditation Program to assist entrepreneurs to capitalize on contracting opportunities and improve their business processes. The SME Rating & Accreditation Program will be an independent certification issued by Enterprise Qatar in collaboration with Dun & Bradstreet, by which it aims to help SMEs gain access to government, semi-government and private business opportunities. (Peninsula Qatar)  Vodafone Qatar sets record with 8 call center awards – Vodafone Qatar has set a record-breaking feat by winning eight awards at Insights’ “Middle East Call Centre 2014” (MECC), the region’s leading call center conference and exhibition held recently in Dubai. The MECC gathered scores of industry experts to discuss topics on customer orientation, process optimization, self-service channels, and multi-skilled employees. The company said for the third time in five years, Vodafone Qatar took home the “Call Centre of the Year” award, which attests to the company’s “steadfast commitment” to provide customers with world-class call center channels and facilities with “unmatched capacity,”. The other awards included “Best Facilities,” “Best Quality Assurance Program,” “Best CRM Analytics,” “Best Contact Centre Social Media Implementation,” “Best Customer Experience Management Process,” and “Best Call Center Song.”. Vodafone Qatar has bagged more than 20 customer service awards over the past four years and its award- winning 24/7 call center caters to customers in five languages. (Gulf-Times.com)  Qatar Rail celebrates 6mn man-hours incident-free safety record – The Qatar Railways Company (Qatar Rail) announced that the company has achieved an unprecedented 6mn work hours without a Lost Time Injury (LTI) at the Doha Metro Green Line works. The feat achieved was a compilation of the safe work done by Qatar Rail’s construction contractors led by Austrian firm PORR and its joint venture partners Saudi Bin Laden Group and HBK. (Bloomberg)  Qatar Shell awards equipment overhaul deal to Stork Oryx JV – Qatar Shell has awarded a 7 year contract to Stork Oryx JV for the overhaul of rotating equipment at the Pearl GTL site in Ras Laffan. The JV - Stork Oryx Turbo Machinery Services - will be responsible for the overhaul of rotating equipment. The contract includes minor and major overhauls of steam turbines, compressors, pumps, blowers, expanders and fans from various manufacturers, which are scheduled to be done during turnaround events. Stork, a global provider of knowledge-based asset integrity services for the oil and gas, power and chemical utility sectors and Oryx Energy Projects & Services, a Qatar- based service provider for the oil and gas, petrochemical and utility sectors, established the JV in November 2013 to serve the entire Middle East North Africa market. As an independent service provider, Stork Oryx Turbo Machinery Services has experience with servicing almost all brands of steam turbines, compressors and pumps. Stork said it has comprehensive experience in the overhaul of rotating equipment and offers the Oryx Engineering Solutions Centre, ideally located in Ras Laffan. (Gulf-Times.com) International  QNB Group: ECB stimulus may avoid Eurozone deflation – QNB Group (QNBK), in a report, said that the monetary stimulus package recently announced by the European Central Bank (ECB) may avoid deflation in the Eurozone. The package includes lowering the deposit rate to -0.1%, the first time that the ECB will charge commercial banks for depositing excess reserves at the central bank. It also included a new program to provide banks with cheap funding to encourage lending to the real economy. These new measures are important to prevent deflation but more may be needed if the current trends of negative foreign inflation and weak domestic demand continue. The new policies are likely to reduce the spreads between Italian, Greek, Portuguese and Spanish bond yields (the so- called EU periphery) and those on German bunds, while the euro is likely to weaken if the inflation outlook improves. In QNB’s view, the most significant measure taken by the ECB is the Targeted Long-Term Refinancing Operation, which provides cheap funding for banks, the quantity of which depends on the size of the banks’ loan book. (Gulf-Times.com)  US producer prices fall, but inflation still seen firming – Producer prices in the US fell in May 2014 after two month of solid gains, but the decline was not enough to change perceptions that inflation pressures are steadily creeping up. The Labor Department’s producer price index for final demand slipped 0.2% after advancing in April by 0.6%, which was the largest gain in 1-1/2 years. Economists, who had expected producer prices to edge up, saw the decline as a correction after gains in March and April, and said it did not change their view about firming prices. Producer inflation in May was depressed by broad price declines at the factory gate, while wholesale food
  • 4. Page 4 of 7 prices snapped four consecutive months of increases. A separate report showed consumer sentiment slipped slightly in early June. The Thomson Reuters/University of Michigan's Consumer Sentiment Index was at 81.2 from 81.9 in May. (Reuters)  S&P lifts outlook on UK's credit rating, but warns on EU exit – Ratings agency Standard & Poor's (S&P) upgraded its outlook on Britain's top-notch triple-A credit rating to stable from negative on June 13, but said this rating would be threatened if Britain decides to leave the European Union. S&P said that Britain was making good progress in getting its public finances in order. However, S&P warned of consequences if Britain decided to leave the European Union. The Conservatives have pledged to hold a referendum on Britain's EU membership in 2017, if they win next year's general election. S&P, the only major ratings agency to retain a triple-A rating on British sovereign debt, said its outlook upgrade meant there was now a less than one-in-three probability that Britain will lose its top credit rating within the next two years. Earlier, Fitch Ratings had affirmed its ‘AA+’ grade for Britain, one notch below its top rating. (Reuters)  Eurozone’s robust April output boosts 2Q2014 GDP growth hopes – According to official data, industrial output in the Eurozone rebounded with a twice-as-strong as expected monthly rise in April owing to energy and non-durable goods production, which points toward an acceleration of economic growth in 2Q2014. Output among the 18 countries sharing the euro rose 0.8% in April after a downwardly revised -0.4% drop in March. Economists had expected a 0.4% rise. On a YoY basis, production grew by a much stronger than expected 1.4%, against an upwardly revised 0.2% rise in March. The data follows strong Eurozone retail sales numbers and a rebound in German industrial orders in April. Output in Germany edged up by a smaller-than-expected 0.2% in April, while France and Italy, returned to monthly expansion. Outside the Eurozone, Britain enjoyed its strongest annual growth in over three years. (Reuters)  S&P cuts South Africa’s credit rating to BBB- on weak growth – South Africa’s credit rating was cut to one level above junk by Standard & Poor’s (S&P) as the longest mining strike in the nation’s history threatens to drag the economy into recession. S&P said the country’s foreign-currency rating was lowered to BBB- from BBB and the local-currency rating was reduced to BBB+ from A-. However, the outlook on both the ratings was raised to stable from negative. Earlier, Fitch Ratings lowered the outlook on its BBB grading to negative from stable. South Africa’s economy – the second-largest in Africa – contracted in 1Q2014 for the first time since 2009 as a 20-week worker strike shut the world’s biggest platinum mines. Weaker growth may restrict the government’s ability to rein in its budget deficit as quickly as targeted. S&P has also lowered its growth forecast for 2014 to 1.9%. (Bloomberg)  Japan's Abe unveils plan to cut corporate tax rate – Japanese Prime Minister Shinzo Abe unveiled a plan to cut the corporate tax rate below 30% in stages to help pull the country’s economy out of two decades of sluggish growth and deflation. Investors have been scrutinizing whether Japan can substantially lower the corporate tax rate – among the highest in the world – to spur growth in the world's third-largest economy. Abe also needs to strike a delicate balance between stimulating growth and reining in snowballing public debt, twice the size of its $5tn economy. The corporate tax cut is a major issue to be included in the government's key fiscal and economic policy outline, which will be finalized around June 27 along with a detailed growth strategy of structural reforms. (Reuters)  China industrial output climbs 8.8% matching forecasts – China’s industrial output and retail sales increased at a faster pace in May, adding to evidence that Premier Li Keqiang’s support measures are stabilizing the world’s second-biggest economy. According to the data released by the National Bureau of Statistics (NBS), factory production rose 8.8% in May 2014 from a year earlier, up from 8.7% in April. Retail sales increased 12.5% and the fixed-asset investment growth during January–May was little changed at 17.2%. The reports bolster Chinese leaders’ confidence that their so-called “mini-stimulus measures” will prevent a deeper economic slowdown. Even so, policy makers are contending with a property market slump, along with risks from shadow banking and rising bad loans that threaten to limit the scale of a recovery. In another report released by NBS, home sales in the first five months fell 9.2% from a year earlier by area and dropped 10.2% by value. Property investment in the January–May period rose 14.7%, down from a 16.4% pace in the first four months. (Bloomberg) Regional  GCC's market cap up at $1.12tn in May – The combined market capitalization of GCC bourses rose 1.9% to $1.118tn in May 2014 from $1.09tn in April as all GCC markets except Kuwait recorded higher trading transactions, driven by rising investor optimism. As per data released by Global Investment House, all indices witnessed a rise in their market capitalization during the month. With $530.6bn, Saudi Arabia's Tasi was the highest contributor, followed by Abu Dhabi & Dubai with $225.7bn (accounting for 20.2%) and Qatar with $203.4bn (18.2%). Kuwait, Oman and Bahrain together contributed $158.3bn to the total market cap in May. Trading among GCC markets remained mixed in May. The volume traded declined 21% MoM, with all markets, except Bahrain and Saudi Arabia, registering growth. (Bloomberg)  Bahri finalizing merger deal with Vela – The National Shipping Company of Saudi Arabia (Bahri) is finalizing its SR12bn merger deal with Vela’s fleet and operations. Vela is a subsidiary of the world’s largest producer and exporter of oil, the Saudi Arabian Oil Company (Saudi Aramco). The two national companies signed a landmark merger agreement in 2012 to make the joint fleet the fourth largest company in the world in terms of ownership of 77 giant ships VLCCs industry. Bahri’s CEO, Saleh Al-Jasser said the company will have a long-term accord with SR5bn and it is going to pay part of it in the form of shares and the rest in cash (SR3.2bn). (GulfBase.com)  KHC, CDCIC sign investment partnership – Kingdom Holding Company (KHC) and Caisse des Depots International Capital (CDCIC) have signed a MoU to establish an investment vehicle for developing Saudi ventures that will benefit from the involvement of French companies, technologies and know-how. The KHC-CDCIC platform will help advance bilateral economic cooperation, and facilitate access to long-term capital among both countries by companies engaged in economic cooperation between Saudi Arabia and France. (GulfBase.com)  SABIC becomes Mideast’s largest patent owner – Saudi Basic Industries Corporation (SABIC) has passed the milestone of having more than 10,000 patents either issued or pending approval, making it the largest owner of intellectual property in the Middle East. SABIC has also significantly increased the rate at which it obtains patents with 2013 witnessing a record number of 373 patent applications filed, a rise of over 300% from the figure in 2010. The year 2014 could see a further increase with 159 new patent applications applied for in 1Q2014. On average, SABIC files a new patent application every 18 hours, each based on the work of approximately four
  • 5. Page 5 of 7 researchers. This represents greater efficiency than any other top ten companies in the chemical industry. (GulfBase.com)  Bupa Arabia appoints CEO – Bupa Arabia for Cooperative Insurance Company has appointed Tal Hisham Nazer as the company’s Chief Executive Officer. Concurrently, Loay Hisham Nazer and Elizabeth Alison Platt has been appointed as the Chairman and Vice-Chairman of the board respectively. (Tadawul)  SCC: SMEs account for 98% of Saudi economy – According to the head of small & medium businesses at the Saudi Council of Chambers (SCC), Mohammad Al-Belaihed there are more than 2 million small & medium enterprises (SMEs) in the Kingdom, which account for 98% of the country’s economy. Mohammad Al-Belaihed noted that the biggest problem facing the business sector is the marketing of their products and a lack of training and consultancy services. He urged the SCC to provide consultancy services for these small businesses at nominal fees. (GulfBase.com)  70 firms invest SR10bn in KAEC industrial city – King Abdullah Economic City (KAEC) has launched more than 300 investment opportunities for investors with a total value estimated at SR4bn in real estate and tourism, as well as fuel stations. The city, which is currently developing 28mn square meters of land, has signed agreements with more than 70 international and local companies for projects in diverse fields with more than SR10bn in investments, as well as offers investment opportunities for the development of low-cost and four-star hotels and resorts. (GulfBase.com)  SFDA: Kingdom imports 70% of its food needs – According to Saudi Food & Drug Authority (SFDA), the Kingdom imports around 70% of its food requirements from 160 countries in around half a million consignments. This forces SFDA to intensify its efforts to monitor food shipments for ensuring the safety of imported food. SFDA has set up a separate department for the inspection of food shipments and closely follows any epidemics in countries that export food items to Saudi Arabia. (GulfBase.com)  IMF: UAE faces risks in property sector – The IMF said that the UAE is likely to cut its fiscal spending further in 2014 as the oil and real estate-powered economy is growing strongly and private credit growth is recovering. The IMF also echoed recent warnings about the risks stemming from the accelerating property sector, especially in Dubai. The strengthening real estate cycle, particularly in the Dubai residential market, could attract potentially destabilizing speculative demand, spurring the risk of unsustainable price dynamics and an eventual correction. With rent controls recently loosened, there is also a risk that rising real estate prices will feed more strongly into inflation. The UAE central bank said this week that residential rental yields in Dubai and Abu Dhabi could indicate growing imbalances and property market overheating. However, Dubai’s Land Department brushed aside the warning, saying the property market growth was driven by the economy rather than by speculation. (Peninsula Qatar)  Shurooq begins Phase-II development of Flag Island – The Sharjah Investment & Development Authority (Shurooq) has commenced the second phase of the Flag Island development to turn the island into a new tourist destination. Upon completion of the second phase, the island will feature varied recreational facilities and amenities, including an open-air 1000-seat amphitheatre, an art gallery, range of shops, restaurants and cafes. The first phase was completed in a span of four weeks, including the development of the island and the construction of the flagpole. The new facilities will be open to public in 1Q2015. (Bloomberg)  Emaar Malls prices debut Sukuk – Emaar Malls Group has priced its $750mn 10-year Reg S debut Sukuk with a profit rate of 4.564%, representing 182.5bps over US$ 10-year mid-swaps. The transaction came on the back of an expedited, yet comprehensive, global roadshow covering the key financial centers: London, Singapore, Hong Kong and the UAE. The order book closed at approximately $5.4bn, showing 7.2 times oversubscription. The pricing of the transaction achieved a balanced distribution, with the Middle East accounts allocated 33%, European investors representing 38%, and Asian investors picking up the remaining 29%. (DFM)  Dubai’s IT products foreign trade grows 35% in 2013; packaging reaches AED6bn – According to Dubai Customs’ Director, Ahmed Mahboob Musabih, the IT products traded between Dubai and the rest of the world saw a 35% growth in 2013 and amounted to AED237bn. This makes up 18% of the emirate’s total trade volume, which amounted to AED1.329tn in 2013. Meanwhile, Dubai’s total foreign trade in packaging has reached around AED6bn in 2013 of which AED2.5bn was exports, while re-exports accounted for AED500mn. Since half of all packaging is used for food and a further 18% for beverages, growth in the packaging industry is directly linked to the food & beverage trade. (GulfBase.com)  DP World raises $1bn from convertible bond – DP World has raised $1bn from a convertible bond with a ten-year lifespan in order to fund growth opportunities and diversify its funding sources. Pricing for DP World's debut convertible issue came at 1.75% coupon guidance and the 37.5% conversion premium above the reference share price. The reference price, set according to the volume-weighted average price between the start and close of trading of DP World shares on June 12, 2014, was given as $27.14. JP Morgan acted as global coordinator for DP World's convertible sale and Citigroup, HSBC and UBS were classed as joint bookrunners. (Reuters)  Shelf Drilling plans $500mn LSE IPO – Dubai-based operator of oil rigs, Shelf Drilling is planning to raise minimum $500mn in an initial public offering (IPO) on the London Stock Exchange (LSE). The company intends to raise $250mn from the issue of new shares, while an unspecified amount of shares held by existing investors will also be sold. Proceeds from the sale of new shares will be used to repay part of a $350mn loan. (GulfBase.com)  Aabar cuts stake in Arabtec – Aabar Investments has reduced its stake to 18.5% in Arabtec Holding Company. Earlier, in May 2012 Aabar paid AED827.6mn buying up 21.6% of Arabtec's shares in 2012 and later led an overhaul of the contractor’s board and senior management. (GulfBase.com)  Nakheel pays AED220mn Sukuk profit – Nakheel has made a profit payment of AED220mn on its trade creditor Sukuk. The company has instructed Deutsche Bank, the registrar and paying agent for the Sukuk, to make the profit payment to all Sukuk holders on the due date of June 15, 2014 against the Sukuk issued amount of AED4.4bn. (GulfBase.com)  Serco awards Dubai Metro’s wireless network contract to NPC – Dubai Metro operator, Serco Company has signed a one-year renewable contract with Needa Professional Communication (NPC) whereby the NPC to provide technical services and applications related to the maintenance of the wireless communication network of the Dubai Metro on both the Red and Green Lines. This covers periodic and corrective maintenance of 50 transmission stations, and monitoring these
  • 6. Page 6 of 7 stations around-the-clock to cope with any malfunctioning or emergency failure. (GulfBase.com)  Preatoni acquires Dubai Star Tower – European property developer, Preatoni has acquired a 100% stake in Dubai Star Tower, which is under construction at Jumeirah Lake Towers. Preatoni has recently launched Preatoni Real Estate company in Dubai. (Bloomberg)  Fitch assigns A+ final rating for Etisalat’s bond – Fitch Ratings has assigned Emirates Telecommunications Corporation’s (Etisalat) $7bn global medium-term notes program and the 3.15bn euro equivalent senior notes issued under the program final ‘A+’ ratings. (GulfBase.com)  Etihad Cargo starts freighter operations to Dar es Salaam – Etihad Cargo has commenced a weekly freighter service to Dar es Salaam, Tanzania. The freighter will also stop in Nairobi, Kenya while returning to Abu Dhabi. Following the first Etihad Cargo flight, all subsequent weekly freighter services will operate every Monday to Julius Nyerere International Airport. Etihad Cargo will deploy one of its three Airbus A330-200 wide- body freighters on the route, offering customers heavy uplift capability of up to 64 metric tons. (GulfBase.com)  Al Hilal Bank mulls benchmark-sized Sukuk issue – Abu Dhabi-based Al Hilal Bank after announcing plans to meet fixed income investors is now mulling a benchmark-sized Tier 1 capital-boosting dollar sukuk issue. The bank has selected itself as well as Citigroup, Emirates NBD, HSBC, National Bank of Abu Dhabi and Standard Chartered to arrange road shows. (GulfBase.com)  Abu Dhabi’s inflation stood at 2.5% – Abu Dhabi’s consumer price inflation for the first five months of 2014 stood at 2.5%, while the country’s consumer price index was 2.8% in May 2014, compared with the same period of 2013 and 0.2% compared with April 2014, while. The rise in consumer prices for the year so far compared with the same period in 2013 shows consumer prices for citizen households rose by 2.7% and 2.4% for non-citizen households. Housing, water, electricity, gas and other fuels group accounted for the largest rise in the index during 2014, contributing 33.4% to the change compared with the same period of 2013. (Bloomberg)  NBO plans five new Muzn Islamic Banking branches – National Bank of Oman (NBO) has recently approved the opening of five new Muzn Islamic Banking branches in Mabela, Sur, Sohar, Salalah and Nizwa subject to regulatory approvals. These new branches will be in addition to the existing branch in Azaiba. (MSM)  S&P affirms ratings on Bahrain; outlook stable – Standard & Poor's Ratings Services (S&P) has affirmed its long and short- term foreign and local currency sovereign credit ratings on Bahrain at BBB/A-2. The outlook is stable. At the same time, S&P has affirmed the BBB/A-2 ratings on the Central Bank of Bahrain (CBO). (Bloomberg)
  • 7. Contacts Saugata Sarkar Abdullah Amin, CFA Shahan Keushgerian Head of Research Senior Research Analyst Senior Research Analyst Tel: (+974) 4476 6534 Tel: (+974) 4476 6569 Tel: (+974) 4476 6509 saugata.sarkar@qnbfs.com.qa abdullah.amin@qnbfs.com.qa sahbi.alkasraoui@qnbfs.com.qa Sahbi Kasraoui Ahmed Al-Khoudary QNB Financial Services SPC Manager – HNWI Head of Sales Trading – Institutional Contact Center: (+974) 4476 6666 Tel: (+974) 4476 6544 Tel: (+974) 4476 6548 PO Box 24025 sahbi.alkasraoui@qnbfs.com.qa ahmed.alkhoudary@qnbfs.com.qa Doha, Qatar DISCLAIMER: This publication has been prepared by QNB Financial Services SPC (“QNBFS”) a wholly-owned subsidiary of Qatar National Bank (“QNB”). QNBFS is regulated by the Qatar Financial Markets Authority and the Qatar Exchange; QNB 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 constitute legal, tax, accounting, or financial advice. We therefore strongly advise potential investors to seek independent professional advice before making any investment decision. Although the information in this report has been obtained from sources that QNBFS believes to be reliable, we have not independently verified such information and it may not be accurate or complete. While this publication has been prepared with the utmost degree of care by our analysts, QNBFS does not make any representations or warranties as to the accuracy and completeness of the information it may contain, and declines any liability in that respect. QNBFS reserves the right to amend the views and opinions expressed in this publication at any time. It may also express viewpoints or make investment decisions that differ significantly from, or even contradict, the views and opinions included in this report. COPYRIGHT: No part of this document may be reproduced without the explicit written permission of QNBFS. Page 7 of 7 Rebased Performance Daily Index Performance Source: Bloomberg Source: Bloomberg Source: Bloomberg (*Market Closed on June 13, 2014) Source: Bloomberg (*Market Closed on June 13, 2014) 80.0 90.0 100.0 110.0 120.0 130.0 140.0 150.0 160.0 170.0 180.0 190.0 200.0 210.0 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 QE Index S&P Pan Arab S&P GCC (0.5%) 0.5% (0.5%) 0.2% (0.2%) 1.1% 3.7% (1.2%) 0.0% 1.2% 2.4% 3.6% 4.8% SaudiArabia Qatar Kuwait Bahrain Oman AbuDhabi Dubai Asset/Currency Performance Close ($) 1D% WTD% YTD% Global Indices Performance Close 1D% WTD% YTD% Gold/Ounce 1,276.89 0.3 1.9 5.9 DJ Industrial 16,775.74 0.2 (0.9) 1.2 Silver/Ounce 19.69 0.8 3.5 1.2 S&P 500 1,936.16 0.3 (0.7) 4.8 Crude Oil (Brent)/Barrel (FM Future) 113.41 0.3 4.4 2.4 NASDAQ 100 4,310.65 0.3 (0.2) 3.2 Natural Gas (Henry Hub)/MMBtu 4.67 3.8 0.4 7.4 STOXX 600 347.07 (0.2) (0.1) 5.7 LPG Propane (Arab Gulf)/Ton 103.63 1.0 2.6 (17.9) DAX 9,912.87 (0.3) (0.7) 3.8 LPG Butane (Arab Gulf)/Ton 119.38 (0.5) 2.0 (12.5) FTSE 100 6,777.85 (1.0) (1.2) 0.4 Euro 1.35 (0.1) (0.8) (1.5) CAC 40 4,543.28 (0.2) (0.8) 5.8 Yen 102.04 0.3 (0.4) (3.1) Nikkei 15,097.84 0.8 0.1 (7.3) GBP 1.70 0.2 1.0 2.5 MSCI EM 1,049.14 (0.5) 0.4 4.6 CHF 1.11 (0.2) (0.7) (0.8) SHANGHAI SE Composite 2,070.72 0.9 2.0 (2.1) AUD 0.94 (0.3) 0.7 5.4 HANG SENG 23,319.17 0.6 1.6 0.1 USD Index* 80.58 0.0 0.2 0.7 BSE SENSEX 25,228.17 (1.4) (0.7) 19.2 RUB 34.41 0.2 (0.0) 4.7 Bovespa 54,806.64 (0.5) 3.2 6.4 BRL 0.45 0.5 1.1 6.3 RTS* 1,374.94 0.0 1.2 (4.7) 186.5 153.8 140.2