2 July Daily market report
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2 July Daily market report 2 July Daily market report Document Transcript

  • Page 1 of 7 QE Intra-Day Movement Qatar Commentary The QE index rose 2.1% to close at 12,384.2. Gains were led by the Telecoms and Transportation indices, gaining 3.9% and 3.3%, respectively. Top gainers were Qatar Cinema & Film Distri. Co. and Qatar Islamic Bank, rising 9.4% and 7.1%, respectively. Among the top losers, Industries Qatar fell 2.2%, while Al Ahli Bank declined 1.8%. GCC Commentary Saudi Arabia: The TASI index rose 1.0% to close at 9,678.5. Gains were led by the Real Estate Dev. and Hotel & Tou. indices, rising 2.3% and 1.9%, respectively. Alhokair Group and Umm Al-Qura Cement Co. rose 9.9% each. Dubai: The DFM index gained 7.9% to close at 4,389.9. The Investment & Financial Services index gained 13.4%, while the Services index rose 10.0%. Gulf General Invest. Co. surged 15.0%, while Arabtec Holding was up 14.9%. Abu Dhabi: The ADX benchmark index rose 5.0% to close at 4,806.8. The Inv. & Financial Services index gained 14.5%, while the Real Estate index was up 11.4%. Eshraq properties surged 14.9%, while Waha Capital gained 14.5%. Kuwait: The KSE index gained 1.1% to close at 7,026.3. The Consumer Goods and Banking indices rose 3.1% and 1.8%, respectively. Noor Financial Investment gained 9.3%, while Palms Agro Production Co. was up 9.1%. Oman: The MSM index rose 0.1% to close at 7,024.8. Gains were led by the Financial and Industrial indices, rising 0.5% and 0.1%, respectively. Al Madina Takaful gained 6.8%, while Oman Fisheries was up 3.4%. Bahrain: The BHB index gained 0.3% to close at 1,430.6. The Industrial index rose 0.9%, while the Commercial Banking index was up 0.6%. National Bank of Bahrain and Ahli United Bank gained 1.3% each. Qatar Exchange Top Gainers Close* 1D% Vol. ‘000 YTD% Qatar Cinema & Film Distri. Co. 49.45 9.4 0.2 23.3 Qatar Islamic Bank 93.50 7.1 357.5 35.5 Medicare Group 85.40 6.8 178.5 62.7 Qatar International Islamic Bank 83.00 5.7 142.0 34.5 Ezdan Holding Group 22.51 5.2 4,687.1 32.4 Qatar Exchange Top Vol. Trades Close* 1D% Vol. ‘000 YTD% Vodafone Qatar 18.15 5.1 6,228.2 69.5 Ezdan Holding Group 22.51 5.2 4,687.1 32.4 Masraf Al Rayan 51.50 3.0 3,337.8 64.5 Mazaya Qatar Real Estate Dev. 17.58 3.8 1,882.1 57.2 Qatar Gas Transport Co. 22.11 5.1 1,179.5 9.2 Market Indicators 02 Jul 14 01 Jul 14 %Chg. Value Traded (QR mn) 949.8 848.9 11.9 Exch. Market Cap. (QR mn) 678,137.4 666,761.2 1.7 Volume (mn) 25.4 20.9 21.8 Number of Transactions 10,172 9,953 2.2 Companies Traded 42 41 2.4 Market Breadth 31:10 40:1 – Market Indices Close 1D% WTD% YTD% TTM P/E Total Return 18,470.98 2.1 4.8 24.6 N/A All Share Index 3,145.78 1.7 4.4 21.6 15.1 Banks 3,034.66 2.5 7.2 24.2 15.1 Industrials 4,147.09 (0.6) 1.7 18.5 16.2 Transportation 2,167.11 3.3 2.2 16.6 13.9 Real Estate 2,603.00 2.9 5.8 33.3 13.0 Insurance 3,419.39 0.5 0.3 46.4 8.9 Telecoms 1,572.16 3.9 2.8 8.1 21.7 Consumer 6,746.68 1.5 2.2 13.4 26.5 Al Rayan Islamic Index 4,120.14 2.4 4.6 35.7 17.8 GCC Top Gainers## Exchange Close# 1D% Vol. ‘000 YTD% Arabtec Holding Co. Dubai 3.31 14.9 271,196.3 61.5 Dubai Financial Market Dubai 2.87 14.8 75,546.5 16.2 Drake & Scull Int. Dubai 1.48 14.7 102,655.5 2.8 Deyaar Development Dubai 1.10 14.6 137,312.6 8.9 Ajman Bank Dubai 2.60 13.0 10,702.2 4.8 GCC Top Losers## Exchange Close# 1D% Vol. ‘000 YTD% National Mobile Tele. Kuwait 1.68 (3.5) 5.3 (4.6) Saudi Cement Saudi Arabia 111.42 (3.4) 145.0 9.8 Industries Qatar Qatar 172.00 (2.2) 190.9 1.8 Abu Dhabi Nat. Energy Abu Dhabi 1.08 (1.8) 11.4 (26.5) Al Ahli Bank Qatar 50.10 (1.8) 4.3 18.4 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% Industries Qatar 172.00 (2.2) 190.9 1.8 Al Ahli Bank 50.10 (1.8) 4.3 18.4 Widam Food Co. 53.10 (1.7) 68.7 2.7 Salam International Investment Co 16.35 (1.4) 1,030.4 25.7 Qatar National Cement Co. 133.00 (1.3) 6.0 11.8 Qatar Exchange Top Val. Trades Close* 1D% Val. ‘000 YTD% Masraf Al Rayan 51.50 3.0 171,856.4 64.5 Vodafone Qatar 18.15 5.1 111,729.5 69.5 Ezdan Holding Group 22.51 5.2 106,486.7 32.4 QNB Group 177.00 1.6 89,376.1 2.9 Doha Bank 57.00 0.4 45,058.6 (2.1) 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* 12,384.24 2.1 4.8 7.8 19.3 260.90 186,284.3 15.4 2.1 4.1 Dubai 4,389.94 7.9 4.0 11.3 30.3 817.33 86,213.9 17.6 1.7 2.4 Abu Dhabi 4,806.75 5.0 1.7 4.2 10.5 150.72 133,857.5 14.0 1.8 3.5 Saudi Arabia 9,678.51 1.0 1.1 1.7 13.4 1,734.42 527,768.8 19.3 2.4 2.9 Kuwait 7,026.29 1.1 0.6 0.8 (6.9) 62.29 111,258.3 16.7 1.1 4.0 Oman 7,024.77 0.1 1.2 0.2 2.8 14.90 25,997.8 12.1 1.7 3.9 Bahrain 1,430.56 0.3 (0.1) 0.2 14.5 0.25 53,475.8 11.2 1.0 4.8 Source: Bloomberg, Qatar Exchange, Tadawul, Muscat Securities Exchange, Dubai Financial Market and Zawya (** TTM; * Value traded ($ mn) do not include special trades, if any) 12,100 12,200 12,300 12,400 12,500 9:30 10:00 10:30 11:00 11:30 12:00 12:30 13:00
  • Page 2 of 7 Qatar Market Commentary  The QE index rose 2.1% to close at 12,384.2. The Telecoms and Transportation indices led the gains. The index rose on the back of buying support from non-Qatari shareholders despite selling pressure from Qatari shareholders.  Qatar Cinema & Film Distri. Co. and Qatar Islamic Bank were the top gainers, rising 9.4% and 7.1% respectively. Among the top losers, Industries Qatar fell 2.2%, while Al Ahli Bank declined 1.8%.  Volume of shares traded on Wednesday rose by 21.8% to 25.4mn from 20.9mn on Tuesday. Further, as compared to the 30-day moving average of 21.9mn, volume for the day was 16.3% higher. Vodafone Qatar and Ezdan Holding Group were the most active stocks, contributing 24.5% and 18.4% to the total volume respectively. Source: Qatar Exchange (* as a % of traded value) Global Economic Data Global Economic Data Date Market Source Indicator Period Actual Consensus Previous 07/02 US MBA MBA Mortgage Applications 27 June -0.20% – -1.00% 07/02 US IPSOS Public Affairs RBC Consumer Outlook Index July 50.5 – 51.0 07/02 US ADP ADP Employment Change June 281K 205K 179K 07/02 EU Eurostat PPI MoM May -0.10% 0.00% -0.10% 07/02 EU Eurostat PPI YoY May -1.00% -1.00% -1.20% 07/02 UK Markit Markit/CIPS UK Construction PMI June 62.6 59.8 60.0 07/02 Spain Spanish Labour Ministry Unemployment MoM Net ('000s) June -122.7 -150.1 -111.9 07/02 Japan Bank of Japan Monetary Base YoY June 42.60% – 45.60% Source: Bloomberg (s.a. = seasonally adjusted; n.s.a. = non-seasonally adjusted; w.d.a. = working day adjusted) News Qatar  QNB Capital appoints new CEO – The Board of Directors of QNB Capital, the investment banking subsidiary of QNB Group (QNBK), has appointed Mira Hamad Abdullah Al Attiyah as its Chief Executive Officer. Ms. Al Attiyah had recently held the position of assistant undersecretary for trade at the Ministry of Economy and Commerce. She has been occupying several senior positions within the ministry and at the Supreme Council for Information and Communication Technology. She was also a key member of several national committees in the business and investment sector. QNB Capital provides a wide range of services to corporations, government and institutional clients locally and globally. (Gulf-Times.com)  CBQK initiates squeeze-out process at its Turkish subsidiary Alternatifbank – The Commercial Bank of Qatar (CBQK), Anadolu Endustri Holding and Anadolu Motor Uretim ve Pazarlama holding 74.25%, 17.21% and 7.79% shares of Alternatifbank (ABank), Turkey, respectively, have initiated a formal squeeze-out process pursuant to which CBQK will acquire a further 0.75% shares of ABank from the Bourse Istanbul. The necessary application regarding the squeeze out, and simultaneous delisting from Bourse Istanbul, has been submitted to ABank's board of directors on July 1, 2014. In accordance with the applicable laws of Turkey, the purchase price of the shares acquired through the squeeze out is expected to be the average price over the last 30 days. (QE)  QIBK and Bank Asya end exclusive talks over stake sale – According to sources, Qatar Islamic Bank (QIBK) and Turkey's Bank Asya have ended exclusive talks over the former acquiring a stake in Bank Asya due to valuation concerns. Turkish state bank Ziraat Bank may now be the most likely partner for Bank Asya, but the two banks have not officially begun talks. (Reuters)  Turkey-based Anel Elektrik’s unit inks QR169.3mn LOI for road project in Qatar – Turkey-based Anel Elektrik’s unit, Anelmep Maintenance & Operation, has signed QR169.3mn letter of intent (LOI) to carry out electrical and mechanical works related to the Al Rayyan road construction & development project in Qatar. Anelmep Maintenance & Operation has inked the agreement with the project’s main contractor Dogus Onur JV – a joint venture between Turkish companies Dogus and Onur. The project envisages the construction of a 10.7 km long road section and is expected to be completed in 1Q2017. (Bloomberg)  HPS to supply integrated control and safety system for QAFAC’s plant – Qatar Fuel Additives Company (QAFAC) has selected the UK-based Honeywell Process Solutions (HPS) to supply a new integrated control & safety system for its Mesaieed Industrial City plant, 50 kilometers south of Doha. The upgradation work will help the plant reduce operating costs and improve efficiencies as it scales up production of methanol and MTBE (methyl tertiary butyl ether), a key gasoline additive that reduces tailpipe. HPS’s integrated control & safety solution, including a new fire and gas system, will improve automation at the plant, increase cyber security, and enhance operator effectiveness. QAFAC will also benefit from the ongoing long- term services through Honeywell's lifecycle support. QAFAC is a joint venture between Industries Qatar (IQCD), OPIC Middle East, LCY and IOL. (Bloomberg)  Total E&P Qatar sees potential in offshore Al Khalij oilfield, signs agreement with QP – Total E&P Qatar sees interesting potential in the offshore Al Khalij oilfield, for which it has signed Overall Activity Buy %* Sell %* Net (QR) Qatari 62.08% 63.70% (15,367,480.21) Non-Qatari 37.92% 36.30% 15,367,480.21
  • Page 3 of 7 an agreement with Qatar Petroleum (QP) to form a JV for 25 years from 2014. Under the terms of this new JV, QP and Total hold 60% and 40% interest, respectively, in the oilfield. Total continues to operate the oilfield. Total E&P Qatar’s Managing Director and Group representative Guillaume Chalmin said that the JV intends to enhance oil recovery as much as possible from this mature offshore oilfield. (Gulf-Times.com)  DHBK to disclose results on July 16, 2014 – Doha Bank (DHBK) will disclose its financial reports for the period ending June 30, 2014, on July 16, 2014. (QE)  KCBK to announce results on July 17, 2014 – Al Khalij Commercial Bank (KCBK) will announce its financial reports for the period ending June 30, 2014, on July 17, 2014. (QE)  VFQS wins Golden CSR award – The Arab Organization for Social Responsibility has recently recognized Vodafone Qatar (VFQS) with the Golden Corporate Social Responsibility (CSR) award. Vodafone Qatar has recently launched the fourth edition of its annual program, World of Difference, which gives financial grants to a number of people to carry out their creative ideas that generate tangible benefits for the community. (Gulf- Times.com)  QA named official carrier of IASP 2014 – The Qatar Science & Technology Park (QSTP) has announced that Qatar Airways (QA) will be the official carrier of the International Association of Science Parks and Areas of Innovation’s (IASP) 31st Annual World Conference (IASP 2014 Doha). IASP 2014 Doha is a global gathering of science parks, entrepreneurs and policy makers. As the event’s official carrier, QA will help bring roughly 1,000 leading government, business and technology innovation delegates from 45 countries to Qatar. (Gulf-Times.com) International  Yellen says rate policy shouldn’t change over instability – Federal Reserve Chairman Janet Yellen said there is no need to change the current monetary policy to address the financial stability concerns although she sees “pockets of increased risk- taking” in the financial system. In a comprehensive salvo into the worldwide debate among central bankers over whether interest rates are a first-order tool to curb financial excess, Yellen came down against that idea and favored regulatory mechanisms. Yellen added that the monetary policy faces significant limitations as a tool to promote financial stability. She said that the policy’s effects on financial vulnerabilities, such as excessive leverage & maturity transformation, are not well understood and are less direct than a regulatory or supervisory approach. Yellen stated that the “primary role” should fall to a macroprudential approach, a combination of multiagency oversight, attention to bank capital & liquidity, and regulatory pressure to create buffers against failure. (Bloomberg)  Moody's Analytics: US wage growth seen modest into 2016 – Moody's Analytics' chief economist Mark Zandi said US wage growth will likely remain modest into 2016 even as employers have ramped up hiring in recent months. Zandi projected the average domestic wages to likely increase at a 2.5% pace in 2015 and 3.0% in 2016, as compared to the current 2.0% rate. Zandi said while wage growth is expected to remain "spotty" in the next couple of years, there are signs of rising salaries in certain regions of the US and high-paying sectors where there is a scarce supply of qualified workers. The pace of pay increases is expected to accelerate when the economy achieves full employment, which he expects will occur in 2016. Earlier, the ADP National Employment Report, which Moody's jointly developed with ADP, showed the US private sector added 281,000 jobs last month, marking the biggest monthly rise since November 2012. (Reuters)  Markit : UK construction PMI hits four-month high in June – Industry data showed a surge in home-building helped British construction activities to grow at its fastest annual pace in four months in June, bucking expectations for a slowdown. The monthly Markit/CIPS purchasing managers' index (PMI) for the construction sector rose to 62.6 in June from 60.0 in May, its highest level since February and well above the forecast for a fall to 59.5. Readings above 50 represent a YoY growth in activities, and those below 50 point to contraction. The equivalent manufacturing survey on Tuesday also beat expectations, driving sterling to its highest level in nearly six years and bolstering expectations that the Bank of England would raise interest rates this year. The construction survey showed the fastest pace in hiring in the sector since 1997. Official data released last week showed that Britain's construction output rose by 1.5% in the first three months of 2014 and was 6.7% higher than a year earlier - the biggest annual rise in three years. The PMI figures pointed to ongoing momentum in the sector, with new orders coming in at the fastest rate since January. (Reuters)  China's official services PMI eases slightly to 55 in June – Government data showed growth in China's services sector edged down from a six-month high in June, with the purchasing manufacturing index (PMI) for the industry slipping to 55. That compares with a reading of 55.5 in May, according to the National Bureau of Statistics. A reading above 50 in PMI surveys indicates growth on a monthly basis, while an outcome below the threshold points to a contraction in activity. More economic indicators are suggesting that the world's second- largest economy is steadying as a flurry of government stimulus measures start to kick in. The results in other similar surveys of Chinese factories earlier in the week have also been upbeat. (Reuters)  Premier Li says downward pressure still exists for Chinese economy – China's Premier Li Keqiang said downward pressure still existed in its economy despite it operating within a reasonable range and some leading indicators demonstrating a positive trend. China's factory activities hit multi-month highs in June, official and private surveys showed on Monday, reinforcing signs that the world's second-largest economy is steadying as the government steps up policy support. Li gave no figures or details and few direct quotes in the comments on the Chinese government's official website, but also addressed the disconnect between government finances and the difficulty of business getting financing. Li said the country is finding it harder and more expensive to finance firms in the real economy. He further added that these costs must be decreased, especially for small and medium enterprises. The government has unveiled a series of modest stimulus measures in recent months to give a lift to economic growth, which dipped to an 18-month low of 7.4% in the first quarter, China's slowest annual growth since the third quarter of 2012. (Reuters)  China frees spreads on retail Yuan rate in reform step – China will permit banks to set their own exchange rates for the Yuan against the dollar in deals with clients, in a further step to relax controls to make the currency more market-driven. The world's second-largest economy seeks to widen the use of the Yuan in global trade and freeing up its tightly-controlled currency is a pre-requisite for wider market liberalization. Beijing has pledged to free up interest rates and currency controls eventually to help put its economy on a more sustainable footing, but such changes have so far been gradual. Effective Wednesday, banks can set the Dollar/Yuan exchange rate in
  • Page 4 of 7 their over-the-counter deals based on market demand, the foreign exchange regulator said in a statement. Before the move, the spread in banks' Dollar/Yuan buying and selling prices had been subject to regulatory controls. The State Administration of Foreign Exchange (SAFE) has already scrapped controls on spreads for banks' retail exchange rates between Yuan and non-dollar currencies. (Reuters) Regional  STC joins Telecom Council of Silicon Valley – Saudi Telecom Company (STC) has joined the Telecom Council of Silicon Valley for business development, collaboration and education. The Telecom Council of Silicon Valley connects companies and individuals involved in the communications technology industry with one another. STC is the first telecom company in the Middle East to join the Telecom Council of Silicon Valley, which includes over 100 member companies, including more than 25 fixed and wireless operators across the globe. (GulfBase.com)  Accor, Munshaat sign management deal for ZamZam Pullman Madinah – Accor Hotel Services Middle East and Munshaat for Projects & Contracting Company have signed a management agreement for a new upscale Pullman hotel in Madinah. The five-star ZamZam Pullman Madinah will consist of two towers, comprising a total of 834 rooms and suites in the holy city. The construction of the ZamZam Pullman Madinah is in an advanced stage and is scheduled to be opened by September 2014. The ZamZam Pullman Madinah is located 150 meters away from the Holy Mosque. (GulfBase.com)  SAMA: Saudi insurance premiums up 19% to SR25bn – According to a report based on Saudi Arabian Monetary Agency (SAMA) data, the value of insurance premiums in the Saudi market rose by 19.2% to reach SR25.2bn in 2013 as compared to SR21.2bn in 2012. The health insurance sector, which represented 51% of the insurance market, grew by 14.3% to SR 12.9bn as compared to SR11.3bn in 2012. Growth in general insurance, which represented 46% of the insurance market, reached 27.8% to SR11.5bn as compared to SR9bn in 2012, whereas growth in protection and saving insurance sector, which represented 3% of the insurance market, dropped by 5% to SR845mn in 2013 as compared to SR889mn in 2012. As regards claims, the report said the value of claims substantially grew to SR15.9bn in 2013 as compared to SR10.9bn in 2012, or an increase of 45.8%. The number of settled claims in a three- year period (2010-2013) rose by 36.5%, whereas insurance premiums rose by only 21% over the same period, which has negatively affected the operating income of the companies in general. (GulfBase.com)  Zain Saudi, Huawei sign new Reload Contract agreement – Mobile Telecommunications Company Saudi Arabia (Zain Saudi) and Huawei have signed a new Reload Contract agreement, aimed at advancing its network infrastructure, managed services and applications in Saudi Arabia. Under the terms of the new agreement, Huawei will work closely with Zain Saudi to improve its technologies and extend its customer service offering for Saudi users. The contract includes Zain’s network new FTK, expansion, modernization and managed services. It also includes the provisions of all related products and services for Zain’s network in Saudi Arabia. (GulfBase.com)  TVTC signs technology agreement with Mobily, Microsoft Saudi Arabia – Technical and Vocational Training Corporation (TVTC) has signed a MoU with Etihad Etisalat Company (Mobily) and Microsoft Saudi Arabia to raise the level of using technology in the educational process in the TVTC colleges and in pursuit of enhancing productivity levels & better qualify students for the labor market. Under the terms of the agreement, tablet computers will be provided to the trainees with productivity applications to upgrade the level of students’ productivity necessary for the labor market. (GulfBase.com)  Saudi Aramco’s subsidiary to buy 28.4% stake in South Korea-based S-Oil Corporation – Saudi Arabian Oil Company’s (Saudi Aramco) Netherlands-based subsidiary – Aramco Overseas Company (AOC) – has agreed in principle to buy 28.4% stake in South Korea-based S-Oil Corporation from Hanjin Group, for a purchase consideration of about $1.95bn. This acquisition will increase AOC's ownership of S-Oil to 63.4% from 34.99%. (Reuters)  SCC updates on capital increase – Saudi Cable Company (SCC) revealed its stance on the proposal of capital increase by stating that it is the process of finalizing the restructuring of its obligations with lenders, which it expects to complete before the end of 2Q2014. The company after completing the financial restructuring and meeting the Capital Market Authority’s (CMA) requirements, will initiate the process of applying to the CMA for the capital increase through a rights issue. (Tadawul)  SEC orders transformers worth $78mn from ABB – ABB, a Zurich-based power and automation technology group, has won an order worth $78mn from Saudi Electricity Company (SEC). ABB will supply transformers for two new combined-cycle power plants that will boost transmission capacity in Riyadh and surrounding areas of the Central Region. The order was booked in the 2Q2014. ABB will deliver generator step-up (GSU) transformers, power transformers and station service transformers for SEC’s combined-cycle power plants. Saudi Arabia plans to boost power-generation capacity by more than 50% by 2020 – from less than 60GW to approximately 91GW. (GulfBase.com)  Tadawul deposits Al-Ahlia’s tradable rights – The Saudi Stock Exchange (Tadawul) announced that the tradable rights for Al-Ahlia Insurance Company have been deposited into applicable investors’ portfolios on July 1, 2014. (Tadawul)  RFIB appoints General Manager of RFIB Saudi Arabia – RFIB Group Limited, the international Lloyd's insurance & reinsurance broker, has appointed Hassan El Kaissi as General Manager of RFIB Saudi Arabia. Hassan brings over 20 years of experience in the Middle East reinsurance market to his new role. He had earlier served Zurich Insurance, as the head of its mid market segment in the Middle East. (Bloomberg)  Midad, Tech Mahindra to establish new 51:49 JV entity – Saudi-based Midad Holding, wholly-owned by Al Fozan Group and India-based information technology (IT) company, Tech Mahindra have entered into an agreement to establish a new joint venture (JV) entity, Tech Mahindra Arabia (TMA). TMA will provide a gamut of IT and IT-enabled services (ITES) to cater to the established and emerging sectors in KSA. The JV would aim to provide services in the areas of consulting, application development & management, network services, integration, engineering, managed services, remote infrastructure management, operational & maintenance services and business process outsourcing. Midad will hold a 51% stake, while the remaining 49% will be held by Tech Mahindra. (Bloomberg)  SCTA signs contract worth SR12mn – Saudi Commission of Tourism and Antiquities (SCTA) has signed a project contract worth about SR12mn with a national company for operating tourist information centers in Saudi Arabia for three years. (Bloomberg)  Tarmac signs MoU with Etihad Rail – Tarmac Middle East has signed a MoU with Etihad Rail, the developer and operator of
  • Page 5 of 7 the UAE’s national railway. The MoU will enable Tarmac Middle East to utilize Etihad Rail operations for the distribution of its products from its local arm, Al Futtaim Tarmac Quarry Product Company to Etihad Rail’s distribution and export terminals across the UAE. It will also enable the distribution to other GCC counties once Etihad Rail completes its connection to the mainline GCC rail network at the end of 2018. This will help Tarmac to reduce operating costs and enhance transit times. The agreement will also provide Etihad Rail with additional volumes of bulk commodities transport capability from its export terminals to other locations within the UAE. It is expected that the volume to products Tarmac Middle East will transport by 2020 via Etihad Rail will reach 6mn tons. (GulfBase.com)  MEED: Construction contracts worth $15bn awarded in UAE in 1H2014 – According to data released by MEED Projects, contracts worth $15bn were awarded in 1H2014 for projects valued at more than $30mn in the UAE’s civil construction sectors. More than 50 contracts, worth a total of over $5.4bn, were for newly-announced or recovered residential projects, and $3.8bn was for mixed-use projects. The civil construction projects represented 75% of all awards in the UAE in 1H2014. In Dubai, 44 major residential projects sector contracts totaling $4.8bn were awarded in 1H2014. Abu Dhabi, with six projects worth a total of $500mn, had the second highest level of residential sector awards measured by value. The top six contractors measured by value of contracts awarded in the six- month period all netted over $500mn worth of contracts. Arabian Construction Company and Arabtec topped the list with over $1bn each. Over $15bn worth of buildings’ projects have been recovered, with nearly 80% of these in the mixed-use and residential sub-sectors, while around $9bn worth of civil sector projects have changed from on hold to active status in the six- month period. (Bloomberg)  DME launches new trading mechanism – The Dubai Mercantile Exchange (DME) has launched a new trading mechanism, Trade at Marker (TAM), for customers of the DME Oman crude oil futures contract. TAM will allow DME customers to buy and sell oil at a price directly linked to DME’s 12:30pm Marker Price. The average of the month’s Marker Prices on DME is the basis of the crude oil export price of the Sultanate of Oman and the Emirate of Dubai, making the DME Marker Price one of the world’s key energy benchmarks. The ability to trade the Marker Price directly will be extremely useful to investors who want exposure to Oman and Dubai‘s crude oil export price, but who may not necessarily want to trade during DME’s settlement window. The TAM trading mechanism can be traded on a daily basis for the front three months of the DME Oman crude oil contract. (GulfBase.com)  DP commences handover of mixed-use development Bay Square – Dubai Properties (DP), the development company of Dubai Properties Group (DPG), has commenced the handover process at its popular mixed-use Bay Square development in Business Bay. Bay Square has become one of Dubai’s most sought-after developments, recording a sell-out response when it was launched for sale in 2013 which prompted huge demand for other similar projects in Business Bay. Bay Square comprises thirteen low-rise buildings which include residential, commercial, retail units and a hotel facing a landscaped courtyard. DP has commenced handovers with new owners of up to 570 commercial units, covering 1mn square ft, in Bay Square, and with new tenants of over 120 retail units at the podium level. (GulfBase.com)  HSBC: Arabtec needs to hire 17,500 staff to clear AED60bn backlog – According to a research report by HSBC, Arabtec Holding’s ability to meet its ambitious growth strategy could be seriously hampered by a lack of executive and middle- management talent in the wake of the crisis that has swept the contracting company in recent weeks. The report says that the company needs to hire an additional 17,500 employees to execute its backlog until 2017, believed to be standing at more than AED60bn. The report also says Arabtec would have to outsource as much as 25 per cent of its order backlog. (GulfBase.com)  Arabtec says it has Aabar’s backing; no projects scrapped – Arabtec has retained the support of its major shareholder Aabar Investments and announced that the company has not cancelled any projects as a result of recent management changes and a restructuring of the firm. Earlier Aabar diluted its stake in Arabtec to 18.94% from 21.57%, raising doubts over its willingness to support the company. (Reuters)  NBAD launches liquidity management fund – The National Bank of Abu Dhabi (NBAD) has launched the Cash Plus Fund, a fund designed to offer liquidity, capital preservation and yield enhancement. The NBAD Cash Plus Fund allows investors to benefit from higher rates than conventional deposits and avail liquidity. The Fund is designed for corporates, institutions and high net worth individuals (HNWI) and suits clients, who would like to benefit from higher returns on cash without giving up their liquidity position. NBAD Cash Plus enhances cash yield through investments into sophisticated money market instruments that are otherwise not accessible to investors; and allows them to retain the flexibility to access their investments on a daily basis. NBAD Cash Plus Fund is open for subscriptions in the form of private placements with a minimum subscription of AED250,000 with multiples of AED100,000 thereafter. The Fund is an open- ended, actively managed product, which aims to provide a yield in excess of overnight deposits, with income distributed daily in the form of additional units. The Fund aims to capture the best opportunities available to investors by investing in a range of high quality money market instruments in the UAE and wider MENA region, in addition to Asia and Europe. (GulfBase.com)  Kuwait: CPI inflation at 2.9% in May 2014 – Kuwait’s inflation in the consumer price index (CPI) rose from 2.7% YoY in April 2014 to 2.9% YoY in May 2014 – the marginal rise in inflation was mostly driven by core inflation (excluding food), which also climbed from 2.7% YoY in April 2014 to 2.9% YoY in May 2014, making it currently on par with the overall inflation rate. The rise in core inflation primarily stemmed from YoY rises in clothing & footwear prices and furnishing & household maintenance costs. Food price inflation remained largely unchanged, slowing marginally from 2.9% YoY in April 2014 to 2.8% YoY, while inflation in housing rents was steady at 4.6% YoY, unchanged from April 2014. Pressures in the three other major components of the CPI - clothing, furnishings and other goods & services resumed their upward trajectory in May 2014. Inflation is expected to average 3.0% in 2014, amid firm pressures from the housing sector. (GulfBase.com)  CBO: Omani Commercial banks’ profits climb 15.1% – According to the Central Bank of Oman’s (CBO) annual report, the net profits of commercial banks operating in the Sultanate rose 15.1% to OMR351.3mn in 2013 after provisions and taxes from OMR305.3mn in 2012. Of the total profits, local banks’ share stood at OMR337.8mn at 96.2%, while that of foreign banks amounted to OMR13.5mn at 3.8%. Interest income remained the dominant component of bank revenues accounting for 73.3% of the total income in 2013. At OMR841.1mn, interest income stood higher by 6.5% over the previous year. On the other hand, interest expenses accounted for 39.1% of total expenditure in 2013 as compared to 40.1% in the previous year. However, interest expenses registered an increase of 6.7% from
  • Page 6 of 7 OMR240.3mn in 2012 to OMR256.5mn in 2013. Net interest income increased from OMR549.4mn in 2012 to OMR584.6mn in 2013, reflecting a rise of 6.4% over the year. The ratio of operating expenses to total expenses stood at around 60% over 2011-2013. Provision for taxes increased by 21.2% to OMR50.3mn in 2013. Cash dividends paid out by local banks to shareholders increased by 9.2% in 2013 to OMR120.5mn as compared to OMR110.3mn in the previous year. Stock dividends, too, rose by 18.7% over the year to OMR64.2mn. (GulfBase.com)  KFH: Bahrain introduces new personal financing product – Kuwait Finance House-Bahrain (KFH-Bahrain) has launched a new personal financing product, Tamweely. The first-of-its-kind Shari’ah compliant Tawarruq facility, Tamweely, allows customers to take financing up to BHD100,000 and enjoy a generous repayment period of up to 84 months. The facility is based on the international commodity trading of palm oil and is offered in partnership with one of its international brokers at the Malaysia bourse. According to an Islamic finance expert, Tawarruq is a transaction where one party buys some goods on credit at a marked-up price and sells the same at a lesser value for the purpose of getting cash. (GulfBase.com)  CIO: Bahrain's economy registers growth – According to the Central Informatics Organization’s (CIO) statistics, Bahrain's real economic growth increased to 3.1% in fixed prices and 1.4% at current prices in 1Q2014 as compared to 1Q2013. The oil sector grew by 4.1% at constant prices but dropped 0.7% at current prices, while the non-oil sector increased by approximately 2.9% and 2.1% at constant and current prices respectively. The financial projects also registered a growth rate of 1.9% at constant prices and 1.5% at current prices. The construction activities grew by 1.5% at constant and current prices respectively, while the real estate activities rose by about 3.1% at constant prices and 4% at current prices. The transportation and telecommunications sectors grew by 4.5% at fixed prices and 5.3% at current prices, while manufacturing industries rose by 0.8% at fixed prices and 2.9% at current prices. The CIO periodical report also showed government-funded projects growing by 2.4% at fixed prices and about 2.3% at current prices. Electricity & water sector registered a 3.5% growth at fixed prices and 3.8% at current prices. Agricultural & fishing activities increased by 1.1% and 1.2% at fixed and current prices respectively. Bahrain's GDP grew by 0.1% at fixed prices, but dropped by 3.2% at current prices in 1Q2014 as compared to 4Q2013. The oil sector dropped by 7.6% at constant prices and 10% at current prices, while the non-oil sector soared by 2.3% at constant prices but recorded a 0.7% drop at current prices. (GulfBase.com)  CBB’s monthly issue of treasury bills oversubscribed by 402% – The Central Bank of Bahrain (CBB) has announced that the BHD30mn monthly issue of Government T-Bills has been oversubscribed by 402%. The bills, carrying a maturity of 182 days, are issued by the CBB, on behalf of the Kingdom of Bahrain. The issue date of the bills is July 6, 2014 and the maturity date is January 4, 2015. The weighted average rate of interest is 0.73% as compared to 0.79% for the previous issue on June 8, 2014. The approximate average price for the issue was 99.63%, with the lowest accepted price being 99.622%. With this, the total outstanding value of Government Treasury Bills is BHD1.230bn. (Bloomberg)  Bahrain Steel launches $340mn seven-year loan – Bahrain Steel launched a $340mn seven-year syndicated loan. Arab Banking Corporation, HSBC and Mashreqbank acted as bookrunners, lead arrangers and underwriters for the transaction. The company intends to use the proceeds to repay debt and for general corporate purposes. (Bloomberg)
  • 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 shahan.keushgerian@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 Source: Bloomberg 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 Jul-11 Jul-12 Jul-13 Jul-14 QE Index S&P Pan Arab S&P GCC 1.0% 2.1% 1.1% 0.3% 0.1% 5.0% 7.9% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% SaudiArabia Qatar Kuwait Bahrain Oman AbuDhabi Dubai Asset/Currency Performance Close ($) 1D% WTD% YTD% Global Indices Performance Close 1D% WTD% YTD% Gold/Ounce 1,326.86 0.0 0.8 10.1 DJ Industrial 16,976.24 0.1 0.7 2.4 Silver/Ounce 21.16 0.6 0.9 8.7 S&P 500 1,974.62 0.1 0.7 6.8 Crude Oil (Brent)/Barrel (FM Future) 111.24 (0.9) (1.8) 0.4 NASDAQ 100 4,457.73 (0.0) 1.4 6.7 Natural Gas (Henry Hub)/MMBtu 4.39 (0.9) 0.3 1.1 STOXX 600 345.68 0.2 1.1 5.3 LPG Propane (Arab Gulf)/Ton 104.75 (1.2) (2.2) (17.2) DAX 9,911.27 0.1 1.0 3.8 LPG Butane (Arab Gulf)/Ton 125.00 (0.8) (1.4) (7.9) FTSE 100 6,816.37 0.2 0.9 1.0 Euro 1.37 (0.1) 0.1 (0.6) CAC 40 4,444.72 (0.4) 0.2 3.5 Yen 101.77 0.2 0.3 (3.4) Nikkei 15,369.97 0.3 1.8 (5.7) GBP 1.72 0.1 0.8 3.7 MSCI EM 1,060.57 0.9 1.4 5.8 CHF 1.13 (0.1) 0.2 0.5 SHANGHAI SE Composite 2,059.42 0.4 1.1 (2.7) AUD 0.94 (0.6) 0.2 5.9 HANG SENG 23,549.62 1.5 1.4 1.0 USD Index 79.96 0.2 (0.1) (0.1) BSE SENSEX 25,841.21 1.3 3.0 22.1 RUB 34.35 0.0 1.8 4.5 Bovespa 53,028.78 (0.3) (0.2) 3.0 BRL 0.45 (0.9) (1.3) 6.4 RTS 1,390.47 2.1 0.8 (3.6) 178.0 150.6 136.4