Page 1 of 8
QE Intra-Day Movement
Qatar Commentary
The QE index rose 0.7% to close at 13,776.2. Gains were led by the Bank...
Page 2 of 8
Qatar Market Commentary
 The QE index rose 0.7% to close at 13,776.2. The Banking &
Financial Services and Tr...
Page 3 of 8
record-low interest rates for an extended period of time. (Gulf-
 Panel to boost Qatarisation in p...
Page 4 of 8
 Fitch cuts Ukraine rating as conflict hurts growth –
Ukraine’s credit rating was cut by Fitch Ratings, which...
Page 5 of 8
visitors that propelled occupancy rates in the four and five-star
hotel category respectively. The strong dema...
Page 6 of 8
expand lending. Emirates NBD (EMIRATES) and Dubai Islamic
Bank (DIB) are among lenders that sold perpetual sec...
Page 7 of 8
 Bahrain banks 'are ready for Basel III' – Bahrain banks rank
among leading global banking institutions in te...
Saugata Sarkar Abdullah Amin, CFA Shahan Keushgerian
Head of Research Senior Research Analyst Senior Research Ana...
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21 August Daily market report


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21 August Daily market report

  1. 1. Page 1 of 8 QE Intra-Day Movement Qatar Commentary The QE index rose 0.7% to close at 13,776.2. Gains were led by the Banking & Financial Services and Transportation indices, gaining 1.0% and 0.5%, respectively. Top gainers were Qatar Islamic Bank and Doha Insurance Co., rising 6.0% and 3.5%, respectively. Among the top losers, Mazaya Qatar Real Estate Dev. and Ahli Bank declined 2.8% each. GCC Commentary Saudi Arabia: The TASI index rose 0.2% to close at 10,734.8. Gains were led by the Retail and Bank. & Fin. Ser. indices, rising 0.8% and 0.6%, respectively. Al Rajhi Takaful gained 7.3%, while Alkhaleej Training & Edu. was up 5.7%. Dubai: The DFM index gained 1.1% to close at 4,907.6. The Industrial index rose 11.1%, while the Insurance index was up 4.7%. Takaful Emarat - Insurance surged 14.9%, while National Cement Co. was up 11.1%. Abu Dhabi: The ADX benchmark index fell 0.1% to close at 5,051.3. The Banking index declined 0.7%, while the Insurance index was down 0.2%. Abu Dhabi National Takaful fell 10.0%, while Fujairah Cement Ind. was down 8.8%. Kuwait: The KSE index rose 0.1% to close at 7,350.3. The Oil & Gas index gained 1.0%, while the Healthcare index was up 0.9%. RAK White Cement gained 8.1%, while Taiba Kuwaiti Holding Co. was up 7.7%. Oman: The MSM index gained 0.3% to close at 7,358.9. Gains were led by the Services index rising 0.7%, while the financial index gained marginally. Renaissance Services rose 9.2%, while Al Madina Investment was up 2.1%. Bahrain: The BHB index gained 0.4% to close at 1,482.8. The Hotel & Tourism index rose 2.4%, while the Industrial index was up 1.2%. Gulf Hotel Group gained 3.5%, while National Bank of Bahrain was up 2.4%. Qatar Exchange Top Gainers Close* 1D% Vol. ‘000 YTD% Qatar Islamic Bank 123.80 6.0 487.3 79.4 Doha Insurance Co. 32.10 3.5 106.2 28.4 Qatar International Islamic Bank 86.80 2.8 1,315.9 40.7 Salam International Investment Co. 20.80 2.7 1,108.8 59.9 Al Khaleej Takaful Group 48.70 2.6 298.3 73.4 Qatar Exchange Top Vol. Trades Close* 1D% Vol. ‘000 YTD% Mazaya Qatar Real Estate Dev. 24.20 (2.8) 4,378.0 116.5 Vodafone Qatar 21.63 2.0 2,578.7 102.0 Masraf Al Rayan 57.40 1.1 2,094.6 83.4 Ezdan Holding Group 19.77 0.4 1,766.3 16.3 United Development Co. 29.85 1.2 1,432.9 38.6 Market Indicators 21 Aug 14 20 Aug 14 %Chg. Value Traded (QR mn) 925.5 867.7 6.7 Exch. Market Cap. (QR mn) 730,195.0 726,713.1 0.5 Volume (mn) 20.4 21.7 (6.2) Number of Transactions 8,823 7,606 16.0 Companies Traded 43 43 0.0 Market Breadth 21:18 20:17 – Market Indices Close 1D% WTD% YTD% TTM P/E Total Return 20,547.05 0.7 2.0 38.6 N/A All Share Index 3,477.45 0.5 1.8 34.4 17.0 Banks 3,366.11 1.0 3.3 37.7 16.5 Industrials 4,577.32 0.3 1.6 30.8 18.5 Transportation 2,334.12 0.5 (0.8) 25.6 14.9 Real Estate 2,965.49 (0.1) 0.4 51.8 15.8 Insurance 4,036.77 (0.6) 1.6 72.8 12.7 Telecoms 1,581.34 0.1 (2.8) 8.8 22.4 Consumer 7,610.29 0.3 1.2 27.9 28.4 Al Rayan Islamic Index 4,788.86 1.0 2.9 57.7 20.6 GCC Top Gainers## Exchange Close# 1D% Vol. ‘000 YTD% Qatar Islamic Bank Qatar 123.80 6.0 487.3 79.4 Union National Bank Abu Dhabi 6.89 3.9 1,297.3 23.2 Saudi Investment Bank Saudi Arabia 31.00 3.7 781.8 17.8 Dallah Healthcare Hold. Saudi Arabia 120.95 3.3 337.0 73.4 Gulf Pharmaceutical Ind. Abu Dhabi 3.10 3.3 6.3 4.3 GCC Top Losers## Exchange Close# 1D% Vol. ‘000 YTD% United Arab Bank Abu Dhabi 6.45 (8.0) 25.5 15.0 Al Ahli Bank Qatar 52.10 (2.8) 2.1 23.1 Nat. Bank Of Abu Dhabi Abu Dhabi 14.40 (2.4) 98.9 14.0 United Real Estate Co. Kuwait 0.10 (1.9) 12.2 (11.9) Saudi Print. & Pack. Co. Saudi Arabia 26.59 (1.8) 707.1 11.5 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% Mazaya Qatar Real Estate Dev. 24.20 (2.8) 4,378.0 116.5 Ahli Bank 52.10 (2.8) 2.1 23.1 Widam Food Co. 60.90 (1.5) 20.5 17.8 Qatar Insurance Co. 96.40 (1.4) 59.5 81.2 Gulf International Services 121.50 (1.2) 137.0 149.0 Qatar Exchange Top Val. Trades Close* 1D% Val. ‘000 YTD% Masraf Al Rayan 57.40 1.1 120,446.2 83.4 Qatar International Islamic Bank 86.80 2.8 112,644.4 40.7 Mazaya Qatar Real Estate Dev. 24.20 (2.8) 108,968.6 116.5 Qatar Islamic Bank 123.80 6.0 59,577.5 79.4 Industries Qatar 188.00 1.4 58,464.7 11.3 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* 13,776.19 0.7 2.0 7.0 32.7 254.17 200,511.5 17.2 2.3 3.6 Dubai 4,907.55 1.1 2.0 1.5 45.6 164.82 94,905.6 20.4 1.8 2.0 Abu Dhabi 5,051.27 (0.1) (0.0) (0.1) 17.7 50.18 139,255.1 14.3 1.8 3.3 Saudi Arabia 10,734.76 0.2 1.4 5.1 25.8 2,105.95 583,448.9 20.6 2.6 2.7 Kuwait 7,350.34 0.1 1.6 3.1 (2.6) 91.23 114,536.1 17.8 1.2 3.7 Oman 7,358.85 0.3 0.5 2.2 7.7 18.46 27,080.9 11.1 1.7 3.8 Bahrain 1,482.80 0.4 0.4 0.8 18.7 2.35 54,463.7 11.4 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) 13,600 13,650 13,700 13,750 13,800 13,850 9:30 10:00 10:30 11:00 11:30 12:00 12:30 13:00
  2. 2. Page 2 of 8 Qatar Market Commentary  The QE index rose 0.7% to close at 13,776.2. The Banking & Financial Services and Transportation indices led the gains.  Qatar Islamic Bank and Doha Insurance Co. were the top gainers, rising 6.0% and 3.5%, respectively. Among the top losers, Mazaya Qatar Real Estate Dev. and Ahli Bank declined 2.8% each.  Volume of shares traded on Thursday fell by 6.2% to 20.4mn from 21.7mn on Wednesday. However, as compared to the 30- day moving average of 17.6mn, volume for the day was 15.7% higher. Mazaya Qatar Real Estate Dev. and Vodafone Qatar were the most active stocks, contributing 21.5% and 12.7% 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 National Bank of Ras Al-Khaimah (Rakbank) Capital Intelligence Abu Dhabi FSR/LT FCR/ST FCR/SR BBB+/A-/A2/2 BBB+/A-/A2/2 – Stable – Source: News reports (* LT – Long Term, ST – Short Term, FSR- Financial Strength Rating, FCR – Foreign Currency Rating, LCR – Local Currency Rating, IDR – Issuer Default Rating, SR – Support Rating, LC – Local Currency) Global Economic Data Date Market Source Indicator Period Actual Consensus Previous 08/21 US Department of Labor Initial Jobless Claims 16 August 298K 303K 312K 08/21 US Markit Markit US Manufacturing PMI August 58.0 55.7 55.8 08/21 US Bloomberg Bloomberg Consumer Comfort 17 August 36.6 – 36.8 08/21 US Bloomberg Bloomberg Economic Expectations August 45.0 – 46 08/21 US NAR Existing Home Sales July 5.15M 5.02M 5.03M 08/21 US NAR Existing Home Sales MoM July 2.40% -0.50% 2.40% 08/21 US Conference Board Leading Index July 0.90% 0.60% 0.60% 08/21 EU Markit Markit Eurozone Manufacturing PMI August 50.8 51.3 51.8 08/21 EU Markit Markit Eurozone Services PMI August 53.5 53.7 54.2 08/21 EU Markit Markit Eurozone Composite PMI August 52.8 53.4 53.8 08/21 EU European Commission Consumer Confidence August -10.0 -9.1 -8.4 08/21 France Markit Markit France Composite PMI August 50.0 49.6 49.4 08/21 France Markit Markit France Manufacturing PMI August 46.5 47.8 47.8 08/21 France Markit Markit France Services PMI August 51.1 50.2 50.4 08/21 Germany Markit Markit/BME Germany Manu. PMI August 52.0 51.5 52.4 08/21 Germany Markit Markit Germany Services PMI August 56.4 55.5 56.7 08/21 Germany Markit Markit/BME Germany Composite PMI August 54.9 54.6 55.7 08/21 UK ONS Public Finances (PSNCR) July -9.7B – 11.9B 08/21 UK ONS Central Government NCR July -2.4B – 18.1B 08/21 UK ONS Public Sector Net Borrowing July -1.1B -1.7B 9.8B 08/21 China Markit HSBC China Manufacturing PMI August 50.3 51.5 51.7 08/21 Japan Markit Markit/JMMA Japan Manufacturing PMI August 52.4 51.5 50.5 08/21 Japan JCA Supermarket Sales YoY July -2.10% – -2.80% Source: Bloomberg (s.a. = seasonally adjusted; n.s.a. = non-seasonally adjusted; w.d.a. = working day adjusted) News Qatar  QNBK: Qatar inflation to stay at around 3.5% until 2015-end – According to a recent report by QNB Group (QNBK), Qatar’s inflation should remain moderate at around 3.5% until the end of 2015, mainly due to declining global food prices. QNBK said since the country has virtually no domestic food production, lower international food prices are likely to continue to push Qatar’s food prices down for the foreseeable future, albeit with a lag. In Qatar, while domestic inflation is being pushed up by rising rents, it has been partly offset by falling food prices. Food inflation in Qatar peaked at an annual increase of 5.9% in June 2011 and since then has slowed to a negative 0.6% in June 2014. QNBK said international food prices have been declining in recent months, reflecting record harvests and weak global demand. Declining food prices have in turn contributed to lower inflation in the Eurozone, the UK and the US. This trend, coupled with a weak Eurozone recovery and mixed economic data in the US, suggests that the risk of global deflation remains high. As such, QNBK expects the European Central Bank, the Bank of England and the Federal Reserve to maintain their Overall Activity Buy %* Sell %* Net (QR) Qatari N/A N/A N/A Non-Qatari N/A N/A N/A
  3. 3. Page 3 of 8 record-low interest rates for an extended period of time. (Gulf-  Panel to boost Qatarisation in private sector – The Ministry of Labor and Social Affairs has set up a special committee to reinforce the ambitious Qatarisation process in the private sector. The panel will monitor companies and establishments whether they are complying with the mandatory 20% recruitment of Qataris as per a decision approved by the Cabinet. The new committee would interact with companies, encourage them to recruit and train Qataris in various fields and help enroll locals in research programs to hone skills. It would also hold periodical meetings with companies to discuss their commitment to Qatarisation and ensure the workforce of each company represents a minimum of 20% Qataris. (Peninsula Qatar)  Keppel delivers Dukhan jackup rig to Qatar's GDI – Keppel FELS, a unit of Keppel Offshore & Marine (KOM), has delivered its fourth jackup rig Dukhan (300' ILC) to Gulf Drilling International (GDI) nine days ahead of schedule and within budget. “Dukhan” is a high specification rig built on Keppel’s proprietary KFELS B class design. Keppel FELS has previously delivered three similar jackup rigs to GDI. Dukhan will be chartered to Qatar Petroleum for five years. The KFELS B Class is equipped with larger spud cans for reduced bearing pressure, which expands its operational coverage, especially in sea beds with soft soil. Besides the four jackup rigs that Keppel has built for GDI, N-KOM – its JV shipyard with Qatar Gas Transport Company – is constructing a self-propelled and self-elevating lifeboat customized for GDI. N-KOM has also been awarded a six-year repair and maintenance contract for GDI’s fleet of jackup rigs operating in the Middle East. (Bloomberg)  ORDS reaches 1mn milestone in Myanmar, eyes 25mn by 2014-end – Ooredoo (ORDS) has already crossed the 1mn customer milestone in its newest market of Myanmar, within three weeks of launching its services, and aims to reach 25mn by the end of 2014. Since the launch of its services in the country, the company has experienced unprecedented demand for its mobile phone and internet services, with people queuing overnight to purchase the low-cost Ooredoo SIM cards. The company said this demand demonstrates the potential for growth and the strong appetite for data services in Myanmar, with many customers using mobile phones and accessing the internet for the first time. ORDS has installed the world’s first next-generation purely UMTS900 network across Myanmar, which will provide fast internet and is primed to enable a smooth transition to a 4G LTE network in the future. (  MERS to open 9 new outlets – Al Meera Consumer Goods Company’s (MERS) Deputy CEO Dr. Mohammed Nasser Al Qahtani stated that the company is working at full capacity to complete a workshop on building new complexes with the advent of 4Q2014 and intends to open 9 new branches after obtaining the required approvals from the competent authorities. Dr. Al-Qahtani said that the new branches will be opened in Al- Wakra, Al-Thumamah, Al-Wajbah, Muaither, Al-Aziziyah, Al- Zakhira, Al-Mereikh and Jaryan Nijaimah. In addition, a branch will be rented at the Gulf Mall, which will open soon. (Bloomberg)  QBIC appoints CEO – Qatar Business Incubation Center (QBIC), the largest mixed-use start-up incubator in the Middle East, has appointed Aysha Al Mudahka as its new Chief Executive Officer. Earlier, she served as the Executive Director of Injaz Qatar since March 2011, where she began as a volunteer in 2007. Prior to Injaz Qatar, she worked at the Qatar Financial Centre and the Qatar Finance & Business Academy. (Bloomberg) International  Yellen riding US growth veers From Draghi as EU stalls – The world’s two most powerful central bankers are about to create a transatlantic gap in monetary policy as the US Federal Reserve considers raising interest rates, while the European Central Bank (ECB) signals more stimulus. The potential for divergence was on display as the Fed Chairperson Janet Yellen and the ECB President Mario Draghi both outlined differing economic outlooks in Jackson Hole, Wyoming. The unemployment rate in the US stood at 6.2% compared with 11.5% in the Eurozone. Yellen said with the US labor market healing, US central bankers are shifting to debating when to roll back the extraordinary monetary support. By contrast, Draghi said ECB officials stand ready to adjust the ECB’s policy stance further, while adding that investor bets on the bloc’s inflation have exhibited significant declines on all horizons in August 2014. (Bloomberg)  BoE’s Broadbent says path of rates to be materially different – The Bank of England (BoE) Deputy Governor Ben Broadbent said the path of interest rates in the UK is going to be materially different than in the past. Speaking to fellow central bankers in Jackson Hole, Wyoming, Broadbent echoed Governor Mark Carney’s point that any increase in the UK benchmark rate from 0.5% will be gradual. Broadbent used the conference to argue the financial crisis has changed the global economic landscape and central banks must now consult labor market data to assess price pressures in their economy. Broadbent’s comments at the symposium come a year after the BoE introduced forward guidance and linked its policy to unemployment.(Bloomberg)  Markit PMI: Eurozone business growth slows in July, prices fall – According to a recent survey, private business growth in the Eurozone slowed more than expected this month, despite widespread price cutting, as both manufacturing and service industry activities dwindled. The Eurozone’s economic growth ground to a halt during the second quarter, dragged down by a shrinking economy in Germany and a stagnant France, even before any impact from sanctions due to the Ukraine crisis. Markit's Composite Purchasing Managers' Index (PMI) will provide gloomy reading for the ECB, suggesting its two biggest economies are struggling like the other smaller members. The Composite Flash PMI fell to 52.8 in mid-August from July's 53.8, far short of expectations in a Reuters poll for a modest dip to 53.4. However, readings above 50 still indicate expansion. Markit said the data points to third-quarter economic growth of 0.3%, matching predictions from a Reuters poll last week. (Reuters)  HSBC sued in US for $250mn over alleged role in 'death bonds' – HSBC Holdings Plc was sued for $250mn for allegedly ignoring red flags that a colorful British entrepreneur, the late David Elias, was committing fraud through an investment vehicle. The complaint was filed in the US District Court in Manhattan by the liquidator of Luxembourg-based SLS Capital SA (SLSC), which failed in 2009. According to the complaint, HSBC had been a custodian of life insurance policies used as collateral for bonds that SLSC sold to investors, and which were falsely marketed as safe. Securities backed by such policies are known as ‘death bonds’. One prominent seller of these bonds was Keydata Investment Services, which had business dealings with SLSC, and whose sales caused big losses for thousands of UK pensioners. Keydata also failed in 2009. Britain's Serious Fraud Office dropped a probe into that company in May 2011, saying it lacked enough evidence to prosecute. (Reuters)
  4. 4. Page 4 of 8  Fitch cuts Ukraine rating as conflict hurts growth – Ukraine’s credit rating was cut by Fitch Ratings, which cited a worsening economic outlook as the military conflict with pro- Russian separatists in the nation’s east curbs business activity. The company lowered its assessment to CCC from B-, which signals a high risk of default. Only Argentina, which failed to make an interest payment last month, is rated lower than Ukraine among 104 countries that Fitch tracks. While the government has recaptured territory from the rebels, conflict may persist or intensify, delaying economic revival and damaging productive assets, Fitch stated. Ukraine and its allies say the war is being fueled by Russian support for the insurgents. Ukraine’s economy has been rocked by Russia’s annexation of Crimea and pro-Russian separatist attacks in the nation’s eastern industrial heartland. Meanwhile, the government signed a $17bn loan from the International Monetary Fund to stave off bankruptcy and received the first tranche in May 2014. (Bloomberg)  BoJ may ease policy for some time to slay deflation – The Bank of Japan (BoJ) Governor Haruhiko Kuroda said the central bank may have to pursue its aggressive monetary policy easing for some more time to fully vanquish deflation. Kuroda said the central bank's efforts to overcome deflation by stimulating Japan's economy with large-scale asset purchases were proving to be effective. However, the public was not yet convinced Japan's central bank would reach its 2% inflation target. Creating that expectation was necessary to get firms to raise wages – a key step in Japan's long war with deflation. Kuroda said Japan is showing significant improvement in its labor markets, though it still faces challenges including a large share of part-time workers in the service sector. He said the quantitative easing stimulus is helping Japan escape from a deflationary cycle of falling wages and demand, adding that the BoJ is trying to manage the program to avoid any abrupt shock to markets. (Reuters) Regional  Saudi CMA publishes draft rules for QFFI investment in listed shares – Saudi Arabian Capital Market Authority (Saudi CMA) board has issued its resolution dated 21 Aug, 2014 which includes publishing the draft Rules for Qualified Foreign Financial Institutions’ (QFFI) investment in listed shares. Saudi Arabia's stock market regulator proposed rules for opening the $580 billion market to direct investment by foreign institutions, including a rule capping foreign ownership at 10% of the market's value. Among draft rules issued on Thursday, QFFI’s must have AUM of at least $5bn, although the CMA may make exceptions down to $3bn, and have a minimum of 5-years experience. Foreign Ownership Limits (FOL) of 20% for each stock, 5% for any one investor on an individual stock, and a total of 10% of market value. A quota, which would currently be $58bn with the overall Saudi market cap at $580bn. The CMA will now conduct a 90-day consultation period with market participants. (Tadawul, Peninsula Qatar)  16 MENA market IPOs raises $2.4bn in 1H2014 – The MENA initial public offering (IPO) market performed robustly in 1H2014 raising $2.4bn from 16 IPOs, up 14% for both volume and proceeds when compared to 1H2013. This has been the market's best performance in terms of volumes and proceeds in the aftermath of the economic crisis in 2008 when it raised $9.4bn from 36 issues in 1H2008. Ernst & Young’s (EY) 2Q2014 MENA IPO update revealed that 11 IPO raised $1.1bn in 2Q2014, a 129% increase on 1Q2014 and a rise of 22% compared to 2013 by deal numbers. IPO from the GCC represented 90% of all MENA deals in 1H2014, with 10 of them raising $2.26bn. Saudi Arabia led the GCC activity during the period with four IPO’s followed by UAE with three, Oman with two and Qatar with one. ( )  GCC exploring ways to up petrochemicals production by 25% – GCC states are planning to increase their share of petrochemicals' production in the global market, upto 25% in 2025, but are wary of the many challenges they face. The Gulf petrochemical industry has witnessed a strong revival over the years, reinforcing its position as a global key resource. Production increased from about 50mn tons in 2004 to more than 100mn tons currently, ranging from chemical products to fuel additives, polyvinyl and aromatics. In order to support the petrochemicals sector in the Gulf, and to align the efforts to find a sophisticated strategy for the petrochemical industry in the region, the Gulf Organization for Industrial Consulting (GOIC), in cooperation with the IEC, will organize a workshop titled 'Petrochemicals: Key issues and strategy', from August 26 to 27, at the Rosewood Hotel in London. (  Elaf Hotel reports 96% occupancy during Ramadan – Elaf Group of Companies announced that Elaf Hotel at the Red Sea Mall in Jeddah has successfully achieved a 96% occupancy rate during Ramadan. The high occupancy rate went higher than its original sales target with the company’s offered packages being sold out for the Ramadan period. (  Vela vessel transferred to Bahri's ownership – National Shipping Company of Saudi Arabia (Bahri) announced that Antares Star, one of the VLCC vessels in the Vela fleet, was transferred to Bahri's ownership on August 21, 2014 and its name was changed to Niban. The remaining Vela vessels shall be transferred to Bahri on a staggered basis according to an agreed upon vessel delivery schedule with Vela and is expected to be completed by 2014-end. (Tadawul)  Saudi Petromin to invest SR2.5bn for petrol, service stations – Saudi Arabia’s state-owned Petromin oil lubricants producer is planning to invest SR2.5bn to construct 200 new petrol stations and 600 road service centers. The new stations would cost an average SR12.5mn each. The project comes after Petromin won a government contract to manage petrol and services stations on the Gulf kingdom’s motorways following competition with other bidders. (Bloomberg)  Saudi biometrics mart to reach $1.5bn by 2019 – According to the “Saudi Arabia Biometrics Market (2014-2019): Market Forecast by Technology, Application and Regions” report, the market for biometrics in Saudi Arabia is incrementing on the back of increasing IT spending, growth registered in biometric based access control systems, and increasing adoption of biometrics technologies across industry verticals. Saudi Arabia’s biometrics market is in its nascent stage, where market is yet to witness swashbuckling growth. Saudi Arabia’s biometrics market is projected to reach $1.5bn by 2019. The growth of the market would be majorly controlled by fingerprint biometrics technology. (  Infinia strengthens its executive leadership team – Infinia Services and Solution (Infinia) has appointed Firdaus Mogul as Chief Sales Officer and Amit Marwah as Chief Marketing Officer. This addition enables Infinia in supporting and challenging its clients in equal measure and making a measurable impact in all facets of their business. Infinia is a UAE-based loyalty and payment solutions company. (  UAE’s hotel continues to maintain robust performance – According to a survey, UAE’s hotel industry continues to maintain robust performance as it enters 3Q2014. The emirate of Dubai alone has reported massive occupancy as it hosted a plethora of events that attracted a huge influx of international
  5. 5. Page 5 of 8 visitors that propelled occupancy rates in the four and five-star hotel category respectively. The strong demand has also allowed hoteliers to increase yields through its 100% occupancy. Most of the international hotel brands in the UAE are in the process of establishing new branches or refurbishing existing facilities to provide their respective customers with quality services and accommodation facilities. (  UAE’s retail sector continues to grow – The retail sector in the UAE continues to grow at a steady pace and has now become one of the major contributors to the country’s economy following the high purchasing power that has been reflected in its massive family consumption. The booming retail business is testimony of the newly opened Carrefour outlet at the refurbished Burjuman shopping mall in Bur Dubai. Carrefour is a large French hypermarket chain with stores operating in the UAE by the Majid Al Futtaim (MAF Group). (  Etihad plan to buy Darwin 33.3% stake fails to meet Swiss rules – Switzerland's Federal Office of Civil Aviation (FOCA) have warned that a plan by Etihad Airways to buy a third of Switzerland's Darwin Airline does not meet legal requirements to be approved, as foreign stakes in European airlines come under increasing scrutiny. FOCA examined whether the deal complied with rules that the majority of Darwin shares must be owned by Swiss or EU citizens, who must also effectively control the airline. Eithad plans to acquire a 33.3% in Darwin, adding to its portfolio of minority stakes in global airlines, but the FOCA said the deal as it stands would nevertheless give Etihad effective control over the Swiss carrier. Darwin, rebranded as Etihad Regional, has until September 30, 2014 to make changes to the agreement, which would then undergo a second review. (Reuters)  Dubai’s RTA: NOL card sales up by 52% in 1H2014 – Dubai’s Roads and Transport Authority (RTA) revealed that the sales of NOL cards continued to soar considerably since the launch of this service in August 2009, and during 1H2014 NOL card sales proceeds increased by as much as 52% compared to the previous period last year. The total number of NOL cards sold in 1H2014 amounted to 1.226mn whereas the number recorded during 1H2013 was 806,000 cards. (  Azizi Developments plans AED135mn Azizi.Iris Residence project – Azizi Developments have announced another new project Azizi.Iris Residence to benefit the affordable housing for families with the promise of enjoying a genuine luxury lifestyle. The project will be completed with the estimated value of AED135mn in Dubai’s next top residential destination, Al Furjan. (  Nakheel awards AED146mn contract for Jumeirah Islands – Nakheel has awarded contract worth over AED146mn for the construction of 84 townhouses and a new retail centre at the Jumeirah Islands community. Metac General Contracting will build new homes and eight retail blocks as part of a new waterfront park and recreational hub at Jumeirah Islands. Construction is expected to start within two months and be completed in early 2016. (  Damac’s Akoya Oxygen sold out – Damac Properties announced that the first release of houses at its green master development ‘Akoya Oxygen’ have been sold out in record time. Akoya Oxygen is the first green master development plan spread over 55mn square foot in Dubailand, and will showcase the greenest living spaces in Dubai with parklands, green open spaces and private gardens. (  ET transport division signs 126 contracts in 1H2014 – Transport and Leasing Division at Emirates Transport (ET) announced the signing of 126 new contracts during 1H2014, worth a total value of AED255mn. ET in Dubai, had the most significant return with AED213mn, followed by the Abu Dhabi Transport and Leasing Centre, which revealed returns of nearly AED32.5mn, and the Ras Al Khaimah Centre for Transport and Leasing with a total value of AED7mn. (  Kuwait's Khorafi family wins Dubai court ruling against Bank Sarasin – Dubai International Financial Centre court has ruled in favour of Kuwait's Khorafi family in a lawsuit against Switzerland's Bank Sarasin over $200mn of investments that went bad. The court found Sarasin mis-sold unsuitable investments to family members in 2007 and 2008, and should pay compensation to the family. (Reuters)  Foreign investors purchased AED1.137bn worth of shares on DFM – Dubai Financial Market (DFM) announced that the value of shares bought by foreign investors from August 17 to August 21, 2014, reached about AED1.137bn, while value of stocks they sold stood at AED1.082bn, with net foreign investment on the market reaching AED55.1mn during the period, as aggregate buy. Value of shares bought by foreigner investors comprised 45.7% of the total value of stocks traded during the five days period, while value of stocks sold by foreign investors during the same period represented 43.5% of stocks traded during the period. The value of stocks bought by institutional investors during the week reached AED732.1mn, comprising 29.5% of the total value of stocks traded during the period. The value of stocks sold by institutional investors during the period reached AED605.7mn, representing 24.4% of the total value of stocks traded during the period. Net institutional investment on the market stood at AED126.4mn during the period, as an aggregate buy. (Bloomberg)  Dubai boosts investment opportunities to businesses in US – Dubai is boosting investment opportunities to businesses in the US in infrastructure, energy, and technology sectors arising after the Expo 2020 win. Dubai Electricity and Water Authority (Dewa), in partnership with the National US-Arab Chamber of Commerce (NUSACC) and the US-UAE Business Council, participated in roadshows in New York City, San Francisco, Los Angeles, Houston and Austin, and met close to 300 business leaders and executives. (  NBAD fund distributes 2.4% dividend – The National Bank of Abu Dhabi (NBAD) distributed 2.4% dividend to NBAD MENA Income & Growth Fund investors with the option to reinvest the dividend in lieu of a cash payout. The distribution equals 2.4% of the fund’s net asset value as of August 7, 2014. All those investors who subscribed to the fund prior to August 5, 2014 would be eligible for dividend distribution. NBAD’s Asset Management Group manages assets in excess of AED10.4bn. (  DHA launches BBM channel – The Dubai Health Authority (DHA) has launched its official DHA BBM Channel on BlackBerry BBM, a leading mobile messaging platform, in a move to enhance social interaction with its customers. Every day, the DHA BBM Channel will publish the most important DHA-related news and events for BBM users across BlackBerry, Android and iPhone smartphones in real time. (Bloomberg)  Abu Dhabi’s Al Hilal Bank raises $500mn from Islamic Bonds – According to source, Al Hilal Bank raised $500mn from the sale of perpetual bonds as it seeks funds to boost capital. As per the source, the Shari’ah-compliant securities, which don’t mature, will pay a coupon of 5.5%. Pricing was tightened from an original guidance of about 6% as bids of about $5bn were received. Banks in the UAE, of which Abu Dhabi is the capital, are selling perpetual bonds to boost core capital as they seek to
  6. 6. Page 6 of 8 expand lending. Emirates NBD (EMIRATES) and Dubai Islamic Bank (DIB) are among lenders that sold perpetual securities last year. According to JPMorgan Chase & Co. indexes, Bond sales from the six-nation GCC, which includes the UAE and Qatar, have surged in June as average yields in the region neared their lowest. (Bloomberg)  NBK: Kuwait real estate subdued in July – According to a report by The National Bank of Kuwait (NBK), Kuwait's real estate sector saw a modest performance in July as sales totaled KD268mn. Sales dropped by 37% YoY and by 49% from June 2014, which was a record month. Sales across all sectors were down, however, with the drop attributed to seasonality and the fact that July only had 18 short working days when factoring in the Holy month of Ramadan and the Eid Al-Fitr holiday. Sales in the residential sector totaled KD132mn in July, a 31% YoY decrease. The report noted that the number of transactions in July dropped to 429, down 30% YoY. The overall outlook for the sector, however, remains stable. Sales in the investment sector stood at KD133mn in July, down 24% YoY. The sector experienced a larger decline of 49% YoY in the number of transactions, which led to an increase in the average transaction size to KD1.2mn. Apartments accounted for 48% of all transactions in the investment sector. Sales in the commercial sector witnessed a sharp decline to KD3.4mn in July from KD114.4mn in June. (  Kuwait plans $7,565mn petrochemical projects – Anticipating increase in demand, Kuwait has planned to expand its petrochemical capacity from 3.4 MTPA in 2012 to 7.9 MTPA by 2015 at a CAGR of 32%. Kuwait Financial Centre (Markaz) in its recent report said, petrochemical projects worth $7,565mn are expected to be executed in Kuwait between 2011 and 2017. Kuwait has implemented 100% FDI law in 2010, which is expected to bring in foreign investors and encourage private players in the petrochemicals sector, which, till now, has been mainly funded by the Government of Kuwait. Major Petrochemical projects under construction by the Petrochemicals Industries Company (PIC) are the Olefins – III plant at the Shauiba Complex of Kuwait worth $7,000mn which is expected to be operational from 2015. (  OOC appoints CEO – Oman Oil Company’s (OOC) board of directors has appointed Isam bin Saud al Zadjali as new the company’s CEO. OOC is a commercial investment company wholly owned by the government of the Sultanate of Oman. (  $75mn strategic fuel storage depot coming up at Salalah Port – Mina Petroleum is investing around $75mn in the construction of a 230,000 cubic meter storage depot in line with a contract award secured from the US government to supply fuel to its vessels calling at Salalah Port. Construction work on the facility is under way on a site adjoining the fuel depot owned by Oman Oil Refineries & Petroleum Industries Company. The strategic fuel storage facility further reinforced Salalah Port’s growing importance as a logistics hub on the Indian Ocean. (  WSP wins contracts for Omani airports – UK-based design firm, WSP has been appointed by J&P Overseas to work on two major airport facilities in Oman and extensive highway works in Qatar. WSP is hired to design maintenance & cargo facilities at Muscat airport and a cargo facility at Salalah airport in Oman. These developments consist of 150,000 square meters of facilities and the maintenance hangar at Muscat will accommodate an Airbus A380 and two Code C aircrafts simultaneously. Additionally, the company said it is also working on the new Orbital Highway in Qatar. The works consist of 45 kilometers of dual five-lane highway along with a two-lane truck highway and four major grade separated junctions. WSP will provide full highway design services including bridges and civil engineering structures. (Bloomberg)  OOCEP plans to start Block 42 exploratory drilling in 3Q2014 – Oman Oil Company Exploration & Production (OOCEP) is expected to commence exploratory drilling in Block 42 during the 3Q2014. Block 42, located in the eastern part of the Sultanate, is a key part of OOCEP’s substantial portfolio of operated and non-operated hydrocarbon assets in Oman. The company also has interests in oil & gas fields in Kazakhstan. Acquired in March 2012 under an Exploration and Production Sharing Agreement (EPSA) signed with the Ministry of Oil and Gas, Block 42 represents something of a ‘launchpad’ for OOCEP’s efforts to venture into hydrocarbon exploration operations in the Sultanate. Covering an area of approximately 25,600 square kilometers, Block 42 encompasses the northeast coastal range of the Oman Mountains and the basin immediately to the south (under Ramlat Sharqiyah). (  Omantel to invest $31mn in submarine cable project – Oman Telecommunications Company (Omantel) said that it is investing $31mn in the construction of a landing station for the Asia-Africa-Europe submarine cable network (AAE-1) in Marseilles, France, which is going to be the first such station operated by Omantel outside Oman. The landing station, which is part of the transnational submarine cable network which traverses South East Asia to Europe and across Egypt, while connecting several countries, will be ready in 2015. (Gulf-  Oman Air launches flights to Manila, Jakarta – OMAN Air is launching new services from Muscat to Manila, in the Philippines, and Jakarta, In Indonesia, from December 2014. Starting on December 2, 2014, Oman Air will be offering two flights a week to Manila, with a third frequency being operated from December 13, 2014. Beginning December 12, 2014, three flights per week will be offered to Jakarta, with a fourth frequency being operated from January 2, 2015. Both the new routes will meet strong demand from air travelers in Oman, the Philippines and Indonesia. (  Oman’s banking sector continues to be strong – The performance of commercial banks in Oman continued to remain favorable during 2014 so far. The total assets of commercial banks increased by 12.4% to OMR24.6bn in June 2014 from OMR21.9bn a year ago. Of the total assets, credit disbursement accounted for 66.5% and increased by 11.2% as at end June 2014 to OMR16.4bn. While credit to the Government declined by 28.5%, credits to the private sector and public enterprises increased by 11.3% and 9.3%, respectively. The commercial banks’ overall investments in securities increased by 32.0% to OMR4.0bn as at the end of June 2014 from OMR3.0bn a year ago. The aggregate deposits held with commercial banks registered a significant increase of 16.0% to OMR17.3bn in June 2014 from OMR14.9bn a year ago. (Bloomberg)  Kalaam Telecom signs deal with Datamena – Bahrain-based Kalaam Telecom has signed an agreement with Datamena to establish a point of presence (PoP) that will enable Kalaam to leverage Datamena’s strategic location and expand Kalaam’s reach into the Middle East, Europe and beyond. Datamena’s carrier-neutral platform will enable Kalaam to carry all synchronous digital hierarchy, Ethernet and Ethernet over synchronous digital hierarchy (EoSDH) traffic from existing carriers at Datamena to Bahrain and the rest of the Middle East through its extensive network of NNIs and own PoPs. (
  7. 7. Page 7 of 8  Bahrain banks 'are ready for Basel III' – Bahrain banks rank among leading global banking institutions in terms of readiness to implement Basel III international standards as they enjoy the highest capital adequacy levels worldwide. (Bloomberg)
  8. 8. 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 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 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 0.2% 0.7% 0.1% 0.4% 0.3% (0.1%) 1.1% (0.4%) 0.0% 0.4% 0.8% 1.2% SaudiArabia Qatar Kuwait Bahrain Oman AbuDhabi Dubai Asset/Currency Performance Close ($) 1D% WTD% YTD% Global Indices Performance Close 1D% WTD% YTD% Gold/Ounce 1,280.08 0.3 (1.9) 6.2 DJ Industrial 17,001.22 (0.2) 2.0 2.6 Silver/Ounce 19.43 (0.1) (0.7) (0.2) S&P 500 1,988.40 (0.2) 1.7 7.6 Crude Oil (Brent)/Barrel (FM Future) 102.29 (0.3) (1.2) (7.7) NASDAQ 100 4,538.55 0.1 1.6 8.7 Natural Gas (Henry Hub)/MMBtu 3.86 (0.3) 2.5 (11.2) STOXX 600 336.75 (0.2) 2.1 2.6 LPG Propane (Arab Gulf)/Ton 101.50 (0.6) (1.2) (19.6) DAX 9,339.17 (0.7) 2.7 (2.2) LPG Butane (Arab Gulf)/Ton 117.75 (1.0) (2.0) (13.7) FTSE 100 6,775.25 (0.0) 1.3 0.4 Euro 1.32 (0.3) (1.2) (3.6) CAC 40 4,252.80 (0.9) 1.9 (1.0) Yen 103.95 0.1 1.6 (1.3) Nikkei 15,539.19 (0.3) 1.4 (4.6) GBP 1.66 (0.0) (0.7) 0.1 MSCI EM 1,083.07 0.1 0.8 8.0 CHF 1.09 (0.2) (1.2) (2.3) SHANGHAI SE Composite 2,240.81 0.5 0.6 5.9 AUD 0.93 0.2 (0.1) 4.5 HANG SENG 25,112.23 0.5 0.6 7.7 USD Index 82.34 0.2 1.1 2.9 BSE SENSEX 26,419.55 0.2 1.2 24.8 RUB 36.11 0.1 (0.2) 9.9 Bovespa 58,407.32 (1.0) 2.5 13.4 BRL 0.44 (0.4) (0.8) 3.7 RTS 1,260.07 (1.2) 2.3 (12.7) 198.0 164.7 148.2