20 July Daily market report
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20 July Daily market report

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20 July Daily market report 20 July Daily market report Document Transcript

  • Page 1 of 8 QE Intra-Day Movement Qatar Commentary The QE index declined 1.0% to close at 13,155.6. Losses were led by the Telecoms and Consumer Goods & Services indices, declining 2.5% and 1.8%, respectively. Top losers were Qatar Islamic Bank and Vodafone Qatar, falling 3.7% each. Among the top gainers, United Development Co. rose 5.3%, while Gulf International Services was up 2.9%. GCC Commentary Saudi Arabia: The TASI index fell 0.5% to close at 9,736.8. Losses were led by the Hotel & Tourism and Real Est. Dev. indices, declining 1.8% and 1.1%, respectively. Alujain Corp. fell 6.4%, while Astra Ind. Group was down 6.3%. Dubai: The DFM index declined 6.0% to close at 4,609.7. The Investment & Financial Services index fell 7.9%, while the Services index was down 7.7%. Gulf Finance House and Gulf General Investments Co. declined 10.0% each. Abu Dhabi: The ADX benchmark index fell 2.3% to close at 4,915.0. The Real Estate index fell 9.8%, while the Investment & Financial Services index was down 6.7%. RAK Properties and Eshraq properties Co. declined 9.9% each. Kuwait: The KSE index fell 0.2% to close at 7,084.2. The Parallel Market index declined 0.7%, while the Real Estate index was down 0.6%. Kuwait Syrian Holding fell 9.8%, while Arkan Al-Kuwait Real Estate was down 7.9%. Oman: The MSM index declined 0.2% to close at 7,188.5. Losses were led by the Financial and Industrial indices, declining 0.5% and 0.1%, respectively. Oman & Emirates Inv. Holding fell 3.3%, while Nat. Detergent was down 2.2%. Bahrain: The BHB index gained marginally to close at 1,481.6. The Insurance index rose 2.4%, while other indices remained unchanged or ended in red. Arab Insurance Group gained 10.0%. Qatar Exchange Top Gainers Close* 1D% Vol. ‘000 YTD% United Development Co. 27.85 5.3 4,986.9 29.4 Gulf International Services 115.00 2.9 322.1 135.7 Qatar Islamic Insurance Co. 83.40 2.8 127.3 44.0 Zad Holding Co. 82.50 1.9 2.0 18.7 Mannai Corp. 110.60 0.6 19.3 23.0 Qatar Exchange Top Vol. Trades Close* 1D% Vol. ‘000 YTD% United Development Co. 27.85 5.3 4,986.9 29.4 Salam International Investment Co. 19.20 (1.8) 2,458.6 47.6 Vodafone Qatar 19.70 (3.7) 2,169.4 83.9 Barwa Real Estate Co. 44.25 (1.6) 1,477.7 48.5 Masraf Al Rayan 54.80 (0.7) 1,132.6 75.1 Market Indicators 20 Jul 14 17 Jul 14 %Chg. Value Traded (QR mn) 720.1 946.2 (23.9) Exch. Market Cap. (QR mn) 706,275.6 714,313.2 (1.1) Volume (mn) 18.9 22.6 (16.6) Number of Transactions 7,830 9,737 (19.6) Companies Traded 42 42 0.0 Market Breadth 7:34 26:14 – Market Indices Close 1D% WTD% YTD% TTM P/E Total Return 19,621.43 (1.0) (1.0) 32.3 N/A All Share Index 3,315.46 (1.0) (1.0) 28.1 16.0 Banks 3,155.36 (1.1) (1.1) 29.1 15.5 Industrials 4,373.19 (0.7) (0.7) 24.9 17.1 Transportation 2,317.47 (0.8) (0.8) 24.7 14.4 Real Estate 2,927.05 0.6 0.6 49.9 14.6 Insurance 3,723.24 (1.3) (1.3) 59.4 11.8 Telecoms 1,650.08 (2.5) (2.5) 13.5 22.8 Consumer 7,013.78 (1.8) (1.8) 17.9 26.9 Al Rayan Islamic Index 4,426.01 (1.1) (1.1) 45.8 18.9 GCC Top Gainers## Exchange Close# 1D% Vol. ‘000 YTD% United Development Co. Qatar 27.85 5.3 4,986.9 29.3 IFA Hotels & Resorts Kuwait 0.21 5.1 2.1 (27.0) Savola Saudi Arabia 76.33 3.7 852.9 21.6 Abu Dhabi Nat. Hotels Abu Dhabi 3.20 3.2 3.0 3.2 Investbank Abu Dhabi 2.90 3.2 163.0 18.6 GCC Top Losers## Exchange Close# 1D% Vol. ‘000 YTD% Deyaar Development Dubai 1.18 (9.9) 74,503.2 16.8 Arabtec Holding Dubai 4.46 (9.9) 195,843.6 117.6 Drake & Scull Int. Dubai 1.46 (9.9) 84,961.2 1.4 Aldar Properties Abu Dhabi 3.50 (9.8) 47,850.5 26.8 Dubai Financial Market Dubai 3.28 (8.9) 41,941.1 32.8 Source: Bloomberg ( # in Local Currency) ( ## GCC Top gainers/losers derived from the Bloomberg GCC 200 Index comprising of the top 200 regional equities based on market capitalization and liquidity) Qatar Exchange Top Losers Close* 1D% Vol. ‘000 YTD% Qatar Islamic Bank 104.00 (3.7) 135.4 50.7 Vodafone Qatar 19.70 (3.7) 2,169.4 83.9 Dlala Brokerage & Invest. Holding 55.70 (3.1) 310.7 152.0 Medicare Group 98.40 (2.9) 357.0 87.4 Ooredoo 134.50 (2.2) 71.1 (2.0) Qatar Exchange Top Val. Trades Close* 1D% Val. ‘000 YTD% United Development Co. 27.85 5.3 139,880.1 29.4 Barwa Real Estate Co. 44.25 (1.6) 66,444.6 48.5 Masraf Al Rayan 54.80 (0.7) 62,409.4 75.1 Salam International Investment Co 19.20 (1.8) 48,526.1 47.6 Vodafone Qatar 19.70 (3.7) 43,451.6 83.9 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* 13,155.58 (1.0) (1.0) 14.5 26.7 197.81 194,013.9 16.1 2.2 3.8 Dubai 4,609.67 (6.0) (6.0) 16.9 36.8 652.19 89,427.8 24.5 1.8 2.3 Abu Dhabi 4,914.95 (2.3) (2.3) 8.0 14.6 108.38 136,433.6 14.5 1.8 3.4 Saudi Arabia 9,736.79 (0.5) (0.5) 2.4 14.1 1,420.06 530,034.1 19.1 2.4 2.9 Kuwait 7,084.16 (0.2) (0.2) 1.6 (6.2) 50.33 111,350.7 16.8 1.1 3.9 Oman 7,188.48 (0.2) (0.2) 2.6 5.2 19.89 26,488.1 12.2 1.7 3.9 Bahrain 1,481.59 0.0 0.0 3.8 18.6 0.19 54,329.7 11.6 1.0 4.6 Source: Bloomberg, Qatar Exchange, Tadawul, Muscat Securities Exchange, Dubai Financial Market and Zawya (** TTM; * Value traded ($ mn) do not include special trades, if any) 13,000 13,100 13,200 13,300 13,400 9:30 10:00 10:30 11:00 11:30 12:00 12:30 13:00
  • Page 2 of 8 Qatar Market Commentary  The QE index declined 1.0% to close at 13,155.6. The Telecoms and Consumer Goods & Serv. indices led the losses. The index fell on the back of selling pressure from Qatari shareholders despite buying support from non-Qatari shareholders.  Qatar Islamic Bank and Vodafone Qatar were the top losers, falling 3.7% each. Among the top gainers, United Development Co. rose 5.3%, while Gulf International Services was up 2.9%.  Volume of shares traded on Sunday fell by 16.6% to 18.9mn from 22.6mn on Thursday. However, as compared to the 30-day moving average of 15.0mn, volume for the day was 26.1% higher. United Development Co. and Salam International Investment Co. were the most active stocks, contributing 26.4% and 13.0% to the total volume respectively. Source: Qatar Exchange (* as a % of traded value) Ratings and Earnings Ratings Updates Company Agency Market Type* Old Rating New Rating Rating Change Outlook Outlook Change Kuwait Finance House (Baitak) CI Kuwait FSR/LT FCR/ST FCR/SR BBB+/A+/A1/2 BBB+/A+/A1/2 – Stable – Oman Insurance S&P Oman FSR/CCR A-/A- A-/A- – Positive – Source: News reports (* LT – Long Term, ST – Short Term, FSR- Financial Strength Rating, FCR – Foreign Currency Rating, LCR – Local Currency Rating, IDR – Issuer Default Rating, SR – Support Rating, LC – Local Currency, CCR – Counterparty Credit Rating) Earnings Releases Company Market Currency Revenue (mn)2Q2014 % Change YoY Operating Profit (mn) 2Q2014 % Change YoY Net Profit (mn) 2Q2014 % Change YoY Al Rajhi Co. for Cooperative Insurance (ARCCI) Saudi SR 238.6 38.0% – – 12.0 NA National Gypsum Co. Saudi SR – – 3.2 -58.2% 5.2 -34.2% Tabuk Cement Co. Saudi SR – – 43.8 -8.2% 43.1 -15.3% Alahli Takaful Co. Saudi SR 39.7 23.2% – – 6.6 309.2% Arabia Insurance Cooperative Co. Saudi SR 88.9 -24.1% – – -8.5 NA Allied Cooperative Insurance Group Saudi SR 41.8 -53.2% – – 2.9 89.1% Emaar The Economic City Saudi SR – – 228.2 879.4% 212.8 19245.5% Trade Union Cooperative Insurance Co. Saudi SR 159.0 10.8% – – 2.5 -74.0% Saudi Airlines Catering Co. Saudi SR – – 160.8 2.2% 164.4 -2.2% Al Hassan Ghazi Ibrahim Shaker Co. (Shaker Group) Saudi SR – – 58.8 -10.9% 382.5 410.4% Al-Ahsa Development Co. Saudi SR – – 1.3 -65.7% -8.3 NA Al Jouf Cement Co. Saudi SR – – 19.5 14.2% 16.1 16.4% Solidarity Saudi Takaful Co. Saudi SR 24.2 -58.2% – – -0.3 NA Sadara Basic Services Co. Saudi SR – – -513.0 NA -518.7 NA Saudi Indian Co. for Cooperative Insurance Saudi SR 59.8 34.8% – – -4.2 NA Nama Chemicals Co. Saudi SR – – -25.6 NA -28.4 NA Qassim Agriculture Co. Saudi SR – – 0.3 28.1% 2.1 4381.4% Red Sea Housing Services Co. (RSH) Saudi SR – – 41.6 17.7% 40.8 23.1% Knowledge Economic City (KEC) Saudi SR – – 7.3 NA 15.5 NA Saudi Real Estate Co. (SRECO) Saudi SR – – 36.7 1.9% 48.0 149.3% Wataniya Insurance Co. Saudi SR 73.4 -25.4% – – -6.9 14.9% MetLife AIG ANB Cooperative Insurance Co. (ANB Insurance) Saudi SR 1.0 NA – – -5.8 NA Saudi Industrial Services Co. (SISCO) Saudi SR – – 41.0 -7.0% 21.7 10.8% Sabb Takaful Saudi SR 53.2 17.2% – – 4.8 -7.1% National Agriculture Marketing Co. (THIMAR) Saudi SR – – 2.6 151.0% 3.0 8.8% Aseer Trading, Tourism & Manufacturing Co. Saudi SR – – 103.7 63.6% 64.4 121.3% Dallah Healthcare Holding Co. Saudi SR – – 33.5 10.9% 34.3 45.3% Overall Activity Buy %* Sell %* Net (QR) Qatari 73.21% 77.70% (32,348,742.60) Non-Qatari 26.79% 22.29% 32,348,742.60
  • Page 3 of 8 Saudi Re for Cooperative Reinsurance Co. Saudi SR 90.9 91.4% – – -7.2 NA National Industrialization Co. Saudi SR – – 915.2 40.2% 408.3 34.7% Saudi Arabian Cooperative Insurance Co. Saudi SR 150.2 31.5% – – 4.6 NA Abdullah A. M. Al-Khodari Sons Co. (ALKHODARI) Saudi SR – – 17.2 -47.1% 7.9 -68.8% Saudi Basic Industries Corporation (SABIC) Saudi SR – – 10070.0 1.0% 6460.0 7.0% Dar Al-Arkan Real Estate Development Co. Saudi SR – – – – 121.3 17.0% Al Mazaya Holding Co. Kuwait USD – – – – 5.8 680.0% Al Batinah Development & Investment Holding Co* Oman OMR – – – – 0.8 1638.1% National Aluminium Products* Oman OMR 8.6 -18.9% – – 0.3 -54.8% Source: Company data, DFM, ADX, MSM (* 1H2014 results) News Qatar  QNNS reports net profit of QR168.9mn in 2Q2014 – Qatar Navigation (QNNS) reported generally weak results in 2Q2014 both on a QoQ and YoY basis. QNNS posted a net profit of QR168.9mn in 2Q2014, declining by 51.7% QoQ and 26.2% YoY. The drop in the bottom-line was due to a combination of a slowdown in revenue and a spike in expenses. The company posted revenue (including investment income) of QR545.3mn, declining by 21.6% QoQ (down 0.6% YoY). Milaha capital and Milaha Offshore were the primary units that hindered top-line growth QoQ. Milaha Capital’s revenue regressed by ~70% QoQ due to a lack of dividends and muted investment gains and/or losses. Moreover, Milaha Offshore’s revenue receded by ~4% QoQ. On the other hand, Milaha Maritime & Logistics and Milaha Gas & Petrochem posted growth of ~10% and ~19% QoQ, respectively. Expenses jumped by 14.5% and 25.6% QoQ, respectively. We retain our price target of QR101.20 and a Market Perform rating (QE, QNBFS)  GWCS reports net profit of QR67.66mn in 1H2014 – Gulf Warehousing Company (GWCS) reported a net profit of QR67.66mn in 1H2014 compared QR52.08mn in 1H2013. The company’s EPS amounted to QR1.42 in 1H2014 versus QR1.10 in 1H2013. (QE)  QOIS 1H2014 net profit rises to QR17.89mn – Qatar & Oman Investment Company (QOIS) posted a net profit of QR17.89mn in 1H2014 as compared to QR13.11mn in 1H2013. The company’s EPS stood at QR0.57 in 1H2014 versus QR0.42 in 1H2013. (QE)  DOHI delivers strong 1H2014 results, net profit surges 49.3% YoY – Doha Insurance Company (DOHI) reported a net profit of QR53.9mn in 1H2014, reflecting an increase of 49.3% on a YoY basis (QR30.6 in 2Q2014, up 106.5% YoY and 31.3% QoQ ). The strong net profit growth was supported by higher underwriting profit and investment &other income. Net underwriting profit rose 22.2% to reach QR48.4mn in 1H2014. On the other hand, investment & other income jumped 82.0% to reach QR44.7mn in 1H2014. EPS amounted to QR1.37 in 1H2014 vs. QR1.25 in 1H2013. (QE)  BRES completes its 95% stake sale in BCA for QR9.02bn – Following the receipt of the non-objection of the Qatar Financial Markets Authority (QFMA) on transaction, Barwa Real Estate Company (BRES) announced that on July 14, 2014, it has closed the sale of all the shares it owns in the share capital of Barwa Commercial Avenue Company (BCA) (equaling 95% of the share capital) to Labregah Real Estate Company – a wholly- owned subsidiary of Qatari Diar Real Estate Investment Company (QDREIC), pursuant to a share sale and purchase agreement signed between Barwa Real Estate and Labregah on June 22, 2014, which was disclosed to the QFMA and the market on June 23, 2014 for a purchase price of QR9.02bn, which will be subject to a customary price adjustment. This transaction has been entered into pursuant to the framework agreement between QDREIC and BRES, which has been previously announced to the market on June 6, 2013 and November 17, 2013. With the closing of the Barwa Commercial Avenue transaction, BRES has now been transferred to Labregah Real Estate with approximately QR19bn worth of assets under the framework agreement leaving approximately 15% of asset value that remains to be transferred under the framework agreement. BRES and QDREIC have agreed to extend the long stop date under the framework agreement to transfer these remaining assets to December 31, 2014. (QE)  Woqod to open seven new petrol stations – Woqod (QFLS) has signed seven new contracts with two local contracting companies for the establishment of fuel stations in different areas of Qatar. QFLS’ CEO Ibrahim Jaham al-Kuwari and Al Uqab Trading and Contracting Company’s CEO Siva Prasad signed the contracts at the Woqod Tower in Doha. Al-Kuwari said that the construction work shall start immediately at Al Qtaifyah, Freij Bin Derham (Bin Dirham Road), Al Rayyan and Al Jadeed in Doha. Further, he added that the contracts covered the construction of two stations on the Salwa Road, particularly along the Al Mseihabiyah and Sodanthell Crossroads areas. He stated that the company was expected to build and operate some 13 new stations over 2014-2015, following its plans to build 100 stations by the end of its 2014-2018 plan. (Gulf- Times.com)  AREDC: Property projects to hit QR35bn in five years – According to the Al Asmakh Real Estate Development Company (AREDC), about 25,000 new housing units will be available in Qatar by 2014-end. The total value of real estate projects is expected to reach QR35bn in the next five years. The new launches are aimed at meeting the increasing demand for new housing units. Qatar is witnessing a sharp rise in its population due to new infrastructure projects launched for the 2022 FIFA World Cup and Qatar’s National Vision 2030. The growing demand in the real estate sector has also led to an increase in the prices of housing units. (Peninsula Qatar)  MERS to announce results on August 6 – Al-Meera Consumer Goods Company (MERS) will disclose its financial reports for the period ending June 30, 2014, on August 6, 2014. (QE)  33 sites shut down for violation of labor laws – Labor inspectors conducted 4,335 and 5,083 visits in May and June 2014, respectively, and closed down 33 sites for violations of
  • Page 4 of 8 laws in Qatar. Listing the steps taken by the government to improve working conditions of expatriates in the country, the Ministry of Labor and Social Affairs said it has increased the number of safety inspectors from 200 to 243 and readied new facilities for housing up to 150,000 foreign workers at the Industrial City and Barwa City. The ministry said companies specializing in property management and leasing will run the two cities. Welcoming the recent progress on labor law reforms, HE the Minister of Labor and Social Affairs Abdullah Saleh Mubarak al-Khulaifi called for continued co-operation with the home countries of expatriate workers to ensure the safety and fair treatment of those working in Qatar. (Gulf-Times.com) International  Britain to detail pensions overhaul with tax, annuity reforms – Britain will publish new rules for the pensions industry giving retirees greater access to their savings and free financial advice, fleshing out reforms announced earlier this year that shook the share value of British insurers. Finance Minister George Osborne caught Britain's pensions industry by surprise in March when he scrapped a rule forcing people to buy an annuity, a financial product which converts a retiree's pension pot into a guaranteed retirement income. Osborne is keen to give people more freedom to tap into the cash they set aside during their working life by scrapping tax penalties imposed on those, who want to withdraw their savings in a lump sum. He wants that change to drive innovation in the £12bn per year British annuity market. In order to accompany the reforms, he also wants to make free independent financial advice available. The government will confirm its intention to go ahead with such plans, seen as the biggest reform of pensions in a generation, and will add details to its proposals, following a consultation with industry, employers and consumer groups. (Reuters)  Spain marks year of recovery in economy hooked on exports –As Spain looks to enter a second year of recovery, Prime Minister Mariano Rajoy’s repair job on the Euro region’s fourth-biggest economy might only be half done. While a Bank of Spain estimate may show in the coming days that it completed a full 12 months of growth in the last quarter, that report and unemployment data will also reveal how much work the prime minister has left to do. The economy remains dependent on exports fueled by the country’s adjustment during the debt crisis, with limited support from domestic demand. With elections due next year, Rajoy can take comfort from bond yields closing at record lows, a recovery that has shown some durability, and surveys revealing manufacturing growth at a seven-year high. Yet, much of the industrial rebound driving the economy hinges on declining wages and government measures, aiding car sales and job hiring rather than product innovation. (Bloomberg)  German savings bank group warns of price bubbles – The head of Germany's Sparkassen savings banks association fears that the European Central Bank's (ECB) expansive monetary policy stance could create price bubbles, without specifying which markets were causing him concern. Georg Fahrenschon stated that the bank is seeing irresponsible risks being taken due to plenty of money coming from all angles. In Germany, traditionally a nation of savers, the decision by the ECB to push interest rates to record lows in June has led to fears that cheap credit could fuel real estate and stock market bubbles. The media has seized on rising house prices as evidence of this. Fahrenschon said the risks are being priced incorrectly, and there is growing danger that bubbles will be created and then pop. Bundesbank chief Jens Weidmann said last week that the ECB should tighten policy as soon as it can. (Reuters)  China's first mortgage debt since crisis shows Li’s Concern – China will revive mortgage-backed debt sales this week after a six-year hiatus, as the government extends help to homebuyers in a flagging property market. According to a statement on the website of Chinabond, Postal Savings Bank of China Co., which has 39,000 branches in the country, plans to sell 6.8bn Yuan of the notes backed by residential mortgages tomorrow. Bloomberg-compiled data shows the last such security in the nation was sold by China Construction Bank Co. in 2007. Premier Li Keqiang is seeking to avert a collapse of the real- estate market after data last week showed new home prices dropped in a record number of cities in the world’s second- largest economy. The central bank in May called on the nation’s biggest lenders to accelerate the granting of mortgages to first- home buyers, and cities including Nanning, Hohhot and Jinan eased property restrictions. (Bloomberg) Regional  EY: MENA IPO raises $2.4bn in 1H2014, up 14% – According to an Ernst & Young’s (EY) IPO update report, the MENA IPO market recorded a total of 16 deals raising $2.4bn in 1H2014, up 14% for both volume and proceeds over the same period in 2013. The report revealed that eleven IPOs raised $1.1bn in 2Q2014, indicating a 129% increase from the previous quarter and a rise of 22% as compared to 2013 by deal numbers. IPOs from the GCC region represented 90% of all MENA deals in 1H2014, with ten of them raising $2.26bn. Saudi Arabia led the GCC activity during the period with four IPOs, followed by the UAE with three, Oman with two and Qatar with one. (Bloomberg)  SABIC CEO: Global outlook for petrochemical demand positive for next three years – Saudi Basic Industries Corporation’s (SABIC) CEO, Mohamed al-Mady said that the global outlook for petrochemical demand is positive over the next three years and there is room for prices to rise. Forecasts suggest shale gas, a potential feedstock for petrochemicals, will only be produced in large quantities from the US in 2018, leaving room for improvement in petrochemical prices. (Reuters)  SAMA: Saudi banks provide SR123bn real estate loans in 1Q2014 – According to data released by the Saudi Arabian Monetary Agency (SAMA), the volume of real estate loans provided by the Saudi banks to individuals and corporate enterprises amounted to SR123.4bn in 1Q2014. The real estate loans given to individuals rose by 33% to SR76.8bn in 1Q2014, as compared to SR57.9bn in 1Q2013. The consumer loans in the Kingdom rose by 9% to SR333.75bn in 1Q2014 as compared to the figures of 1Q2013. On the other hand, loans for credit cards grew by 13% by the end of 1Q2014 to reach SR8.87bn as compared to SR7.84bn in 1Q2013. (GulfBase.com)  ACE Arabia’s BoD decides to apply for de-licensing of health insurance activities – ACE Arabia Cooperative Insurance Company’s (ACE Arabia) board of directors has decided to apply to Saudi Arabian Monetary Agency (SAMA) for de-licensing of its (remaining) health insurance activities effective September 1, 2014 and limit its insurance license to general insurance activities from the same date. The company has taken this decision in order to focus fully on its core business of general insurance, in which it benefits from a strong track record of growth, supported by the expertise, global experience and technical knowledge of its joint venture shareholder ACE. (Tadawul)
  • Page 5 of 8  Saudi GACA plans to ramp up airport capacity to 100mn passengers – Saudi's General Authority of Civil Aviation (GACA) is planning to scale up capacities of airports nationwide to more than 100mn passengers by 2020. GACA’s board members approved the 2020 strategy that included many objectives like expansion of 27 domestic & regional airports, and aims to increase competitiveness in the ground services & handling sector, cargo and airplane supplies. (Bloomberg)  Saudi CMA suspends trading of AICC shares for two hours on July 21 – The Saudi Capital Market Authority (Saudi CMA) has announced a two-hour trading suspension of Arabia Insurance Cooperative Company (AICC) from the start of the trading session on July 21, 2014, while orders maintenance will start from 12:30 pm, as the company’s accumulated losses reached 73.64% of its capital. Saudi CMA will place a yellow flag next to the company’s name on Tadawul. (Tadawul)  Trading of Wafa Insurance shares suspended for two hours on July 21 – The Saudi Capital Market Authority (Saudi CMA) has announced a two-hour trading suspension of Saudi Indian Co. for Cooperative Insurance (Wafa Insurance) from the start of the trading session on July 21, 2014, while orders maintenance will start from 12:30 pm, as the company’s accumulated losses reached 73.3% of its capital. Saudi CMA will place a yellow flag next to the company’s name on Tadawul. (Tadawul)  UAE CB launches new Interim Margin Lending Facility – The UAE Central Bank (UAE CB) has introduced a new lending facility to assist banks which face short-term liquidity shortfalls in the future. The facility, called the Interim Margin Lending Facility will provide funding on an overnight basis for banks, which are able to provide eligible securities and instruments as collateral. The development of the facility originated from regular consultations between the Central Bank and the UAE Banks Federation, specifically in the context of introducing new ways to further strengthen and consolidate the banking sector as a whole. (GulfBase.com)  NBS: UAE’s CPI increased by 1.91% in 1H2014 – According to the National Bureau of Statistics (NBS), the Consumer Price Index (CPI) in the UAE reached 119.75 in 1H2014, and compared with its 2007 base year, the average increase of prices amounted to 1.91% as compared to 1H2013. The CPI’s uptrend was driven by increases in prices of major groups in consumer basket in the UAE, except health services. Average consumer price for 1H2014 indicated increases in the following major expenditure groups: education 4.47%, furniture & household goods 3.73 %, housing, water, electricity & gas 2.32%, food & non-alcoholic drinks 2.16%, alcoholic beverages & tobacco 1.66%, restaurants & hotels 1.16%, miscellaneous goods & services 1.39%, transport 1%, recreational & cultural 0.76 %, clothing & footwear 0.58 %, and communications 0.32%. At the same time, the report added there was a decrease of 0.16% in the health group. (Bloomberg)  UAE may issue federal government bonds by 2018 – UAE is expecting to issue its first-ever federal government bonds before 2018 to help the country's banks meet global liquidity rules. UAE banks, such as National Bank of Abu Dhabi and Emirates NBD, could buy the AED-denominated government debt to help meet the liquidity requirements being phased in under the Basel III global banking standards. (Reuters)  United Arab Bank reports net profit of AED328mn in 1H2014 – United Arab Bank reported a net profit of AED328mn for 1H2014, reflecting an increase of 26% over 1H2013. The bank generated an operating profit of AED475mn, while the total income increased to AED 676mn, with a solid performance across both net interest income and non-interest income, up 40% and 46% respectively as compared to 1H2013. Total loans & advances improved by 35% to AED17.9bn as compared to 1H2013, while customer deposits increased by an outstanding 49% over the same period to stand at AED18.6bn, further reinforcing the depth of the bank’s customer relationships and ongoing sustainability of UAB’s growth strategy. (Bloomberg)  Emirates NBD repays AED4bn to UAE MoF – The UAE Ministry of Finance (MoF) has revealed that Emirates NBD has repaid AED4bn to the Ministry. The funds were the final part of a total support package made available to the bank of AED12.6bn. In total, the UAE Government had approved around AED70bn to support the banking sector at the height of the financial crisis in October 2008. (GulfBase.com)  Marka established as public joint stock company, operations begin – Marka has obtained the final approval from the UAE Ministry of Economy (MoE), the Securities & Commodities Authority (SCA) and the Department of Economic Development (DED). Marka has announced that the company is now formally established as a public joint stock company. Marka was recently incorporated with a capital of AED500mn. The inaugural general assembly of Marka ratified the Memorandum of Association (MOA) &Articles of Association (AOA) of the company and approved the proposal submitted by the founders committee. The inaugural general assembly followed the successful IPO of the company's shares, which was oversubscribed by more than 36 times. (GulfBase.com)  Dubai FDI launches digital magazine to showcase advantages – The Dubai Investment Development Agency (Dubai FDI), an agency of the Department of Economic Development (DED) has launched ‘Invest,’ a digital magazine on business and investment in Dubai. Available on the Apple Newsstand, ‘Invest’ was launched as part of its drive to connect with investors worldwide and attract greater global attention to Dubai. The interactive news application (App) showcases the vast business and investment opportunities in Dubai, while also celebrating the success of foreign companies in the emirate. Public and private sector representatives will appear in successive issues of the magazine with testimonials & advice on life in Dubai and setting up businesses in the emirate for improved efficiencies & greater coverage of high growth markets. (GulfBase.com)  Azizi Developments unveils AED140mn Orchid Residence project – Azizi Developments has unveiled a AED140mn new project named Orchid Residence, a contemporary establishment of 99 units. The project comes with fully furnished 1/2/3 bedroom apartments along with all necessary amenities and ready for immediate occupancy. The property development will remain a lucrative investment for the property owners, who will in turn, offer it on rent for short or long-term basis for tenants coming to the UAE either for business or leisure purposes and also gearing toward the Expo 2020 requirements. (GulfBase.com)  JLL: Dubai residential sector shows signs of slowdown – According to a report released by Jones Lang LaSalle (JLL), the Dubai real estate market’s retail and hotel areas continue to experience growth while its office sector remain varied and residential sector is showing signs of a slowdown. JLL’s 2Q2014 Dubai Real Estate Overview report pointed out that although the residential sector saw prices and rents increase across most areas, the rate of growth has started to slow from what it was in 2014. The average sales prices grew 6% over the same period, down from 10% in 1Q2014. The report stated that with signs of reduced sales activity, particularly in the secondary villa market, the asking prices in this sector is likely to decline further in the
  • Page 6 of 8 coming months. While the continued economic growth has improved sentiment and generated demand for commercial space, the high level of both current vacancy and future supply continue to constrain the market. Meanwhile, the rents in best performing regional malls have increased by as much as 12% in 2Q2014, with limited additions to stock and continued interest from retailers, the report added. The Dubai hotel market continues to grow, despite the completion of more than 1,500 additional rooms during the period, recording the highest Rev- Par levels since 2008. The average occupancies have remained relatively stable at around 85%, with room rates increasing three per cent, making Dubai one of the strongest performing hotel markets globally. (GulfBase.com)  Al-Futtaim wins HVAC maintenance contract from FEWA – Al-Futtaim Engineering Company’s facilities management division has won a multi-million dirham contract from the Federal Electricity and Water Authority (FEWA) for annual maintenance of its HVAC units. The two-year contract will see the Al-Futtaim maintain FEWA’s A/C units above 5 tons across its various offices and sites, including commercial offices, power plants, reverse osmosis plants, MEP plants, main stations, sub stations and pumping stations. (GulfBase.com)  Dubai RTA seeks bids for Dubai Creek bridge – Dubai’s Roads and Transport Authority (RTA) has invited contractors to prequalify for the construction of the Al Ittihad bridge project, which will span across the Dubai Creek. Tenders for the construction of the 2,700m bridge, which is designed to replace the floating bridge, are scheduled to be issued in October 2014 with work to be launched in 4Q2014. (Bloomberg)  UNB reports net profit of AED1,032mn in 1H2014 – United National Bank (UNB) reported a net profit of AED1,032mn in 1H2014 as compared to AED987mn in 1H2013, reflecting an increase of 5%. The profit for 2Q2014 grew 6% to AED520mn from AED492mn in 2Q2013. The bank’s net interest income in 2Q2014 declined marginally to AED607mn from AED608mn in 2Q2013. Total assets stood at AED92.2bn as of June 30, 2014, up by 15% over AED87.5bn a year earlier and up by 5% as compared to December 2013. Loans & advances stood at AED62bn as of June 30, 2014, up by 3% YoY, while customer deposits grew 16% YoY to AED67bn as of June 30, 2014. EPS amounted to AED0.19 at the end of 2Q2014 as against AED0.18 a year earlier. (ADX)  ADIB’s 2Q2014 net profit rises 22.5% to AED454.8mn – Abu Dhabi Islamic Bank (ADIB) reported a net profit of AED454.8mn in 2Q2014 as compared to AED371.4mn in 2Q2013. ADIB’s net revenue increased 13.9% to reach to AED1.08bn. Loans extended by the bank stood at AED64.9bn as of June 30, 2014, up 15.4% YoY, while deposits grew 18.2% over the same timeframe to AED79bn. (Reuters)  KFH announces 0.80% return on three-month deposit in KD during 2Q2014 – Kuwait Finance House (KFH) announced the returns of its investment deposits that it offers to its clients in foreign currencies, and the three-month deposit in KD during 2Q2014. KFH acting Chief Treasury Officer, Ahmad Al-Sumait mentioned that the three-month deposit in KD has achieved 0.80% returns during 2Q2014. Moreover, Al-Sumait explained that KFH offered competitive returns during 2Q2014 as compared to the local and overseas markets, where the returns in USD reached 0.32%, while the returns in USD during 1H2014 reached 0.35%, nine months returns reached 0.37%, and annual return of 0.40%. He added that KFH distributed returns on deposits in Euro by the end of 2Q2014 that reached 0.15%, six months returns reached 0.152%, nine months returns reached 0.157%, and annual returns reached 0.161%. (GulfBase.com)  AUB reports 1H2014 net profit of KD25.4mn – Kuwait's Ahli United Bank (AUB) reported a net profit of 9.9% to reach KD25.4mn in 1H2014 as compared to KD23.2mn in 1H2013. EPS rose to 19.6 fils AS against 18 fils in 1H2013. The bank’s operating revenues reached KD53.4mn, while assets surged by 12.5% to KD3.57bn in 1H2014, as against KD3.17bn by December 2013. Customer deposits rose 9.9% to KD2.3bn. (GulfBase.com)  Kipco receives offer to acquire OSN – Kuwait Projects Company (Kipco) has received an offer to acquire 100% of OSN, the pay-TV company valued at $4.3bn by Arqaam Capital. Kipco owns 60.5% of OSN, while Mawarid Group holds the rest. The company will evaluate the non-binding confidential offer and present it to its board & partner to take a decision. (Bloomberg)  Al-Ahli Bank’s net profit grows 11% to KD19.1mn in 1H2014 – Al Ahli Bank of Kuwait reported a net profit of KD19.1mn for 1H2014 as compared to KD17.2mn in 1H2013, representing a 11% increase. EPS amounted to 12 fils as compared to 11 fils a year earlier. The bank’s operational revenues amounted to KD59.9mn as compared to KD57.8mn in 1H2013. The NPL ratio had reduced to 2.18% as compared to 2.68% in 1H2013. Total assets grew by 19% to KD3.8bn at the beginning of 2014. Customer deposits grew by 19% to KD2.3bn during 2014. (Bloomberg)  Oman's Tender Board awards projects worth OMR616.3mn in 1H2014 – The Oman Tender Board awarded projects to the tune of more than OMR616.3mn in 1H2014 as compared to OMR857.2mn in 1H2013. The road projects topped other sectors in terms of value. The following projects were assigned: The second phase of Bidbid-Sur Road dualisation. The project cost was OMR189.8mn. Additional works on coastal Khasab- Tibat road in Musandam Governorate, worth OMR42mn. Dualisation of Taqah-Mirbat road in the Governorate of Dhofar, worth OMR40.4mn. Dualisation of Aqbat A'Rustaq road. The construction of the Wilayat of A'Rustaq Gate. Dualisation of Al Iraqi Roundabout to Al Murba Roundabout. Dualisation of Al Iraqi Roundabout to Wadi Al Sahtan road interjection on A'Rustaq-Maskan road in the Governorate of South Al Batinah, OMR27.7mn. Design and implementation of internal roads in the Wilayats of Sur, Ja'alan Bani Bu Ali, Ja'alan Bani Bu Hassan, Al Mudhaibi, Ibra, Bidiyah Al Qabil in the Governorate of South and North A'Sharqiya. The tenders included the OMR22.6mn to be spent on the first part, and OMR17.5mn worth of construction of tunnels along the Al Batinah road (stage three). The tenders also included other important projects in electricity, water, health, housing and food supply sectors. (GulfBase.com)  Oman appoints Madrid-based Ineco to draw up MPTS master plan – The Omani Ministry of Transport and Communications has appointed Madrid-based Ineco to draw up the Muscat Public Transport System (MPTS) master plan. The scope of Ineco’s study will cover not only overland options, but also coastal maritime transportation, presently overseen by state-owned National Ferries Company, as well as a national rail network. The options for a light rail system integrated with the national network will be explored as well. (GulfBase.com)  Ominvest writes to ONIC Holding to open talks for possible merger – Oman International Development & Investment Company (Ominvest) has written to Oman National Investment Corporation Holding (ONIC Holding) to open talks on a possible merger. Ominvest disclosed that it has written to ONIC Holding to explore the possibility of forming a strategic arrangement between the two organizations, which is subject to both
  • Page 7 of 8 institutions agreeing on the terms of the transaction & subsequent board of directors, shareholders and regulatory approvals. (MSM, Reuters)  NAPCO plans expansion; CEO resigns – National Aluminium Products Company’s (NAPCO) board of directors has approved a phased expansion program for adding substantial capacity to implement the company’s strategic plan. The board envisages the proposed plan will bring growth in volume and profitability to the company. Meanwhile, NAPCO’s director Juma Abdullah Khalfan Al Khamisi has resigned from the board of the company as per letter dated July 17, 2014. His resignation has been accepted by the BoD. (MSM)
  • 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 8 of 8 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 (0.5%) (1.0%) (0.2%) 0.0% (0.2%) (2.3%) (6.0%) (8.0%) (6.0%) (4.0%) (2.0%) 0.0% 2.0% SaudiArabia Qatar Kuwait Bahrain Oman AbuDhabi Dubai Asset/Currency Performance Close ($) 1D% WTD% YTD% Global Indices Performance Close 1D% WTD% YTD% Gold/Ounce 1,311.10 0.0 0.0 8.7 DJ Industrial 17,100.18 0.0 0.0 3.2 Silver/Ounce 20.87 0.0 0.0 7.2 S&P 500 1,978.22 0.0 0.0 7.0 Crude Oil (Brent)/Barrel (FM Future) 107.24 0.0 0.0 (3.2) NASDAQ 100 4,432.15 0.0 0.0 6.1 Natural Gas (Henry Hub)/MMBtu 3.91 0.0 0.0 (10.1) STOXX 600 339.66 0.0 0.0 3.5 LPG Propane (Arab Gulf)/Ton 103.50 0.0 0.0 (18.0) DAX 9,720.02 0.0 0.0 1.8 LPG Butane (Arab Gulf)/Ton 120.25 0.0 0.0 (11.9) FTSE 100 6,749.45 0.0 0.0 0.0 Euro 1.35 0.0 0.0 (1.6) CAC 40 4,335.31 0.0 0.0 0.9 Yen 101.34 0.0 0.0 (3.8) Nikkei 15,215.71 0.0 0.0 (6.6) GBP 1.71 0.0 0.0 3.2 MSCI EM 1,063.26 0.0 0.0 6.0 CHF 1.11 0.0 0.0 (0.6) SHANGHAI SE Composite 2,059.07 0.0 0.0 (2.7) AUD 0.94 0.0 0.0 5.3 HANG SENG 23,454.79 0.0 0.0 0.6 USD Index 80.52 0.0 0.0 0.6 BSE SENSEX 25,641.56 0.0 0.0 21.1 RUB 35.13 0.0 0.0 6.9 Bovespa 57,012.90 0.0 0.0 10.7 BRL 0.45 0.0 0.0 6.1 RTS 1,276.28 0.0 0.0 (11.5) 189.0 152.6 138.3