25 June Daily market report

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25 June Daily market report

  1. 1. Page 1 of 8 QE Intra-Day Movement Qatar Commentary The QE index declined 1.8% to close at 12,100.9. Losses were led by the Telecoms and Banking & Financial Services indices, declining 3.6% and 2.0%, respectively. Top losers were Qatar Cinema & Film Distribution Co. and Qatar Islamic Bank, falling 10.0% and 5.3%, respectively. Among the top gainers, Salam International Inv. Co. rose 2.3%, while Medicare Group was up 2.0%. GCC Commentary Saudi Arabia: The TASI index rose 0.6% to close at 9,581.0. Gains were led by the Insurance and Tele. & IT indices, rising 2.0% and 1.2%, respectively. Umm Al-Qura Cement gained 9.8%, while Co. for Coop. Ins. was up 8.7%. Dubai: The DFM index gained 6.1% to close at 4,253.0. The Telecom. index gained 7.8%, while the Financial & Investment Services index rose 7.0%. Takaful Emarat Ins. surged 12.5%, while Takaful House was up 12.3%. Abu Dhabi: The ADX benchmark index rose 1.9% to close at 4,639.4. The Real Estate index gained 8.8%, while the Inv. & Financial Services index was up 6.0%. Eshraq Properties rose 10.6%, while Aldar Properties was up 8.7%. Kuwait: The KSE index gained 0.4% to close at 6,965.3. The Oil & Gas and Telecommunication indices rose 1.7% and 1.4%, respectively. Tamdeen Real Estate Co. gained 9.1%, while National Cleaning Co. was up 8.8%. Oman: The MSM index rose marginally to close at 6,922.6. Gains were led by the Financial index rising 0.3%, while the other indices ended in red. Oman Fisheries gained 3.3%, while National Bank Of Oman was up 3.0%. Bahrain: The BHB index gained 0.2% to close at 1,430.8. The Services index rose 0.6%, while the Commercial Banking index was up 0.4%. Ithmaar Bank gained 3.6%, while Al Salam Bank was up 1.8%. Qatar Exchange Top Gainers Close* 1D% Vol. ‘000 YTD% Salam International Investment Co. 17.00 2.3 973.0 30.7 Medicare Group 81.20 2.0 41.5 54.7 Al Meera Consumer Goods Co. 171.00 1.4 39.9 28.3 Al Khaleej Takaful Group 42.80 1.4 113.4 52.4 Qatar Islamic Insurance Co. 76.70 0.5 111.6 32.5 Qatar Exchange Top Vol. Trades Close* 1D% Vol. ‘000 YTD% Masraf Al Rayan 50.40 0.0 2,199.5 61.0 Vodafone Qatar 18.86 (3.5) 1,043.4 76.1 Salam International Investment Co. 17.00 2.3 973.0 30.7 Ezdan Holding Group 19.81 (2.3) 818.5 16.5 Barwa Real Estate Co. 38.20 (1.7) 733.1 28.2 Market Indicators 25 Jun 14 24 Jun 14 %Chg. Value Traded (QR mn) 580.0 458.8 26.4 Exch. Market Cap. (QR mn) 657,100.2 670,722.1 (2.0) Volume (mn) 11.3 8.4 34.4 Number of Transactions 8,011 5,431 47.5 Companies Traded 42 43 (2.3) Market Breadth 8:30 14:28 – Market Indices Close 1D% WTD% YTD% TTM P/E Total Return 18,048.43 (1.8) (2.8) 21.7 N/A All Share Index 3,077.43 (1.7) (2.8) 18.9 14.7 Banks 2,907.88 (2.0) (3.7) 19.0 14.5 Industrials 4,129.10 (1.5) (2.8) 18.0 16.1 Transportation 2,147.53 (1.8) (2.8) 15.6 13.8 Real Estate 2,532.46 (1.3) (2.1) 29.7 12.7 Insurance 3,416.86 (0.4) (0.1) 46.3 8.9 Telecoms 1,588.41 (3.6) (1.1) 9.3 21.9 Consumer 6,680.54 0.2 (1.4) 12.3 26.3 Al Rayan Islamic Index 4,046.54 (1.3) (3.0) 33.3 17.5 GCC Top Gainers## Exchange Close# 1D% Vol. ‘000 YTD% Deyaar Development Dubai 1.07 11.1 74,562.3 5.9 Dubai Investments Dubai 3.05 9.3 40,329.8 31.1 Aldar Properties Abu Dhabi 3.61 8.7 49,289.8 30.8 Co for Coop. Ins. Saudi Arabia 43.00 8.7 1,585.5 22.2 Emirates Int. Telecom. Dubai 5.50 7.8 1,849.0 (17.4) GCC Top Losers## Exchange Close# 1D% Vol. ‘000 YTD% United Arab Bank Abu Dhabi 5.70 (9.5) 0.3 1.6 Qatar Islamic Bank Qatar 85.20 (5.3) 219.2 23.5 Saudi Dairy & Food. Saudi Arabia 108.15 (4.3) 90.8 25.4 DP World Ltd. Dubai 19.00 (3.8) 258.5 7.3 IFA Hotels & Resorts Kuwait 0.21 (3.6) 5.0 (24.9) 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 Cinema & Film Distri. Co. 45.20 (10.0) 8.0 12.7 Qatar Islamic Bank 85.20 (5.3) 219.2 23.5 Zad Holding Co. 78.30 (4.5) 1.9 12.7 Ooredoo 129.70 (3.6) 196.9 (5.5) Vodafone Qatar 18.86 (3.5) 1,043.4 76.1 Qatar Exchange Top Val. Trades Close* 1D% Val. ‘000 YTD% Masraf Al Rayan 50.40 0.0 111,942.0 61.0 QNB Group 166.50 (3.3) 82,079.3 (3.2) Industries Qatar 170.00 (2.6) 40,687.2 0.7 Doha Bank 56.30 (0.5) 29,369.3 (3.3) Barwa Real Estate Co. 38.20 (1.7) 28,206.7 28.2 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* 12,100.93 (1.8) (2.8) (11.6) 16.6 159.31 180,505.4 15.1 2.1 4.1 Dubai 4,253.04 6.1 (7.4) (16.4) 26.2 563.52 84,243.1 17.1 1.7 2.4 Abu Dhabi 4,639.41 1.9 (3.4) (11.7) 8.1 158.62 130,038.5 13.7 1.7 3.6 Saudi Arabia 9,581.03 0.6 (0.7) (2.5) 12.2 1,834.10 521,111.4 19.1 2.3 2.9 Kuwait 6,965.30 0.4 0.4 (4.5) (7.7) 57.40 110,130.7 16.5 1.1 4.0 Oman 6,922.62 0.0 0.1 1.0 1.3 30.23 25,706.7 12.0 1.7 4.0 Bahrain 1,430.82 0.2 (0.3) (2.0) 14.6 1.38 53,477.4 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) 12,000 12,100 12,200 12,300 12,400 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 declined 1.8% to close at 12,100.9. The Telecoms and Banking & Financial Services indices led the losses. The index fell on the back of selling pressure from non-Qatari shareholders despite buying support from Qatari shareholders.  Qatar Cinema & Film Distribution Co. and Qatar Islamic Bank were the top losers, falling 10.0% and 5.3%, respectively. Among the top gainers, Salam International Investment Co. rose 2.3%, while Medicare Group was up 2.0%.  Volume of shares traded on Wednesday rose by 34.4% to 11.3mn from 8.4mn on Tuesday. However, as compared to the 30-day moving average of 23.5mn, volume for the day was 51.9% lower. Masraf Al Rayan and Vodafone Qatar were the most active stocks, contributing 19.5% and 9.2% 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 Banque Saudi Fransi (BSF) CI Saudi Arabia FSR/LT FCR/ST FCR/SR A/A+/A1/2 A/A+/A1/2 – 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 06/25 US MBA MBA Mortgage Applications 20 June -1.00% – -9.20% 06/25 US BEA GDP Annualized QoQ 1Q2014 -2.90% -1.80% -1.00% 06/25 US BEA Personal Consumption 1Q2014 1.00% 2.40% 3.10% 06/25 US BEA GDP Price Index 1Q2014 1.30% 1.30% 1.30% 06/25 US BEA Core PCE QoQ 1Q2014 1.20% 1.20% 1.20% 06/25 US Markit Markit US Composite PMI June 61.1 – 58.4 06/25 US Markit Markit US Services PMI June 61.2 58.0 58.1 06/25 France INSEE Manufacturing Confidence June 98.0 99.0 99.0 06/25 France INSEE Business Confidence June 92.0 94.0 94.0 06/25 France INSEE Production Outlook Indicator June -19.0 – -12.0 06/25 Germany GfK AG GfK Consumer Confidence July 8.9 8.6 8.6 06/25 Spain INE PPI MoM May 0.90% – 0.10% 06/25 Spain INE PPI YoY May -0.40% – -0.20% 06/25 Italy ISTAT Consumer Confidence Index June 105.7 106.4 106.2 06/25 China Deutsche Boerse AG Westpac-MNI Consumer Sentiment June 112.6 – 121.2 06/25 Japan Bank of Japan PPI Services YoY May 3.60% 3.30% 3.40% Source: Bloomberg (s.a. = seasonally adjusted; n.s.a. = non-seasonally adjusted; w.d.a. = working day adjusted) News Qatar  Qatar’s Cabinet issues draft law on investment by non- Qataris – Qatar’s Cabinet has issued a draft law amending some provisions of Law No. (13) of 2000 on regulation of non- Qatari capital investment in economic activities. As per this amendment, non-Qatari investors may have a ratio of not more than 49% of the capital of sharing companies listed on the Qatar Exchange (QE), after the approval of the Ministry of Economy and Commerce on the ratio proposed in the memorandum of association and articles of association. Non-Qatari investors may have a ratio of more than the percentage referred to, with the approval of the Cabinet upon the proposal of the Minister of Economy and Commerce. The citizens of the GCC will be treated like Qatari nationals in owning shares of companies listed on the QE. The Cabinet issued draft laws based on the recommendations of the Advisory (Shura) Council. The Cabinet also issued a draft law on organizing Charitable Works. (Gulf- Times.com)  Panel discusses tax exemption for foreign stock investors – A key committee of the Advisory Committee invited top officials from the Ministry of Finance, Qatar Exchange and its regulator to discuss the draft law that seeks to allow tax exemption for foreign stock investors on capital gains and on income earned from dividend and interest on bonds. The committee was earlier asked by the council to study the draft law and give an opinion. The panel had first given a favorable opinion which the council rejected, saying it was against allowing foreign stocks investors enjoying tax exemption. The council then sent back the draft law to the committee again. (Peninsula Qatar)  CBQK completes $750mn bond issue – The Commercial Bank of Qatar (CBQK) has announced the successful pricing and closing of an issuance of $750mn five-year senior Overall Activity Buy %* Sell %* Net (QR) Qatari 65.86% 44.11% 126,119,114.85 Non-Qatari 34.14% 55.90% (126,119,114.85)
  3. 3. Page 3 of 8 unsecured notes under it its subsidiary, CBQ Finance Limited’s $5bn Euro Medium Term Note Program (EMTN). The Notes were issued at a spread of 117 basis points over mid-swaps and will carry a coupon of 2.875% per annum. Bank of America- Merrill Lynch, HSBC and Morgan Stanley acted as joint lead managers for the bond sale. Investor orders worth more than $3bn have been placed for the issue. CBQK intends to use the proceeds for general funding purposes to support its growth plans. (QE)  Empower settles first installment of Doha Bank loan – Emirates Central Cooling Systems Corporation (Empower) has repaid the first installment of the AED520mn loan to Doha Bank (DHBK). The company secured this loan in August 2013, with tenure of five years, and the repayment of the loan is scheduled to commence from 2014 onward in ten equal semi-annual installments. Empower used the loans to finance its operations in the UAE, which now includes a portfolio of nearly one million refrigeration tons of capacity. This is the largest capacity of any single district cooling services provider in the world. (Bloomberg)  Tanween Retail starts leasing Joud Mall – Tanween, the development management arm of Qatar’s Barwa Real Estate Company (BRES), has announced commencement of leasing its latest project Joud Mall in Barwa Commercial Avenue. The shopping complex comprises over 130 retail units, six-screen cinemas, two large family entertainment areas for children and teenagers, two food courts with nearly 40 outlets for fast food and casual dining restaurants, as well as coffee shops. (AmeInfo.com)  Ashghal to introduce EAMS technology to boost operations – The Public Works Authority (Ashghal) in collaboration with IBM is introducing a new advanced technology – “Enterprise Asset Management Solution” (EAMS) to enhance the efficiency of operations, maintenance and management of road networks & systems. The EAMS will also help in operations and maintenance of drainage networks, pump & treatment stations and surface & groundwater networks. (Peninsula Qatar)  CRA eyes balanced approach to regulations – Qatar’s Communications Regulatory Authority (CRA) has released a policy statement outlining the key principles that would underpin its approach to regulation of the communications sector. The statement is intended to provide transparency and certainty to stakeholders with regard to the focus of regulation while ensuring that the sector thrives and meets the needs of the people. (Peninsula Qatar)  Katara Hospitality acquires five hotel properties in Europe – Qatar-based Katara Hospitality has acquired five prime properties – the InterContinental Carlton Cannes, the InterContinental Amstel Amsterdam, the InterContinental Madrid, the InterContinental Frankfurt, and the leasehold interest in the InterContinental De La Ville Rome, in key European cities from a private investor. The acquisition brings Katara Hospitality’s global portfolio to some 32 hotels operational or under development, topping its long-established goal of 30 properties by 2016. (Gulf-Times.com)  QATI to disclose results on July 13, 2014 – Qatar Insurance Company (QATI) will disclose the financial reports for the period ending June 30, 2014, on July 13, 2014. (QE) International  US economy shrank in first quarter by most in five years – The US economy contracted in the first quarter by the most since the depths of the last recession as consumer spending cooled. The Commerce Department said GDP fell at a 2.9% annualized rate, more than forecast and the worst reading since the same three months in 2009, after a previously reported 1% drop. It marked the biggest downward revision from the agency’s second GDP estimate since records began in 1976. The revision reflected a slowdown in health care spending. Consumers returned to stores and car dealerships, companies placed more orders for equipment and manufacturing picked up as temperatures warmed, indicating that the early-year setback was temporary. Combined with more job gains, such data underscore the view of Federal Reserve policy makers that the economy is improving and in less need of monetary stimulus. Meanwhile, a survey showed the US services sector expanded in June at the fastest pace in at least 4-1/2 years, pushed higher by increasing business activities. Financial data firm Markit said its "flash" services Purchasing Managers Index hit 61.2 in June, the highest reading since the survey began in October 2009, as compared to May's final reading of 58.1. A reading above 50 signals expansion in economic activities. The services sector added employees at the fastest rate on record, matching the 55.4 reading hit in September 2013. Last month it read 52.8. Markit's "flash" composite PMI, a weighted average of its manufacturing and services indexes, hit 61.1 in June, also a record high, versus 58.4 in May. (Bloomberg, Reuters)  Deutsche Bank completes $11.6bn cap hike – Deutsche Bank successfully completed an $11.6bn capital increase aimed at fortifying its regulatory ratios and paying for restructuring at Germany's biggest lender. Deutsche Bank Co-Chief Executives Juergen Fitschen and Anshu Jain said the bank has taken decisive steps to protect it against known capital challenges, sharpen competitive edge, and accelerate investments in growth in all its business divisions. Investors were generally supportive of the capital increase when it was unveiled last month, saying it showed Germany's biggest lender was moving to quell concerns about a capital gap that had dogged it since the financial crisis. But Deutsche Bank still faces worries over performance at the investment bank, its largest division, as well as a host of legal and regulatory threats such as an ongoing global probe into currency price manipulation and a US probe into financial dealings with Iran. (Reuters)  IEA: World saved $3.5tn from emergency oil stocks – The International Energy Agency (IEA) said the world has saved $3.5tn over the last 30 years by maintaining emergency oil stocks to offset supply shocks and curb price surges. The IEA said in a report that emergency oil stocks held by member and non-member states have acted as an "insurance" against oil supply disruptions. Spiraling violence in key oil producer Iraq in recent weeks has pushed global oil prices to nine-month highs, reviving speculation of a release of strategic stocks in case of severe supply disruptions. The IEA said significant economic benefits are derived primarily from offsetting oil supply losses and thereby reducing potentially significant oil price increases. These comprise reduced GDP losses and reduced import costs. Using a model to simulate tens of thousands of possible oil supply disruption scenarios and market outcomes, the report estimated the global net benefits derived from existing emergency stocks to amount to $41 per barrel per year after storage costs. This equates to some $3.5tn over 30 years, it said. (Reuters)  Euro Credit: Draghi gives Hollande’s faltering economy a leg up – French President Francois Hollande has Mario Draghi to thank for near-record-low borrowing costs. With France barely expanding, Hollande had grown dependent on the European Central Bank president’s actions to keep borrowing costs in check. France pays 1.74% to borrow for 10 years, close to its all-time low and 10 basis points less than before Draghi unveiled an unprecedented package of measures to supply liquidity to the
  4. 4. Page 4 of 8 Euroarea and its banks. The drop from May 8, when Draghi promised action, is 20 basis points. Draghi announced on June 5 that the ECB would cut its deposit rate to minus 0.1%, becoming the first major central bank to take one of its main rates negative. In a bid to get credit flowing, the ECB opened a €400bn liquidity channel tied to bank lending and said officials would start work on an asset-purchase plan. (Bloomberg)  China local debt growth slows as economic expansion cools – China’s chief auditor said the growth in local government debt has slowed, a sign that tighter scrutiny on borrowing and an economic slowdown have curbed credit. According to a report delivered by Liu Jiayi, head of the National Audit Office, outstanding debt for nine provinces and nine cities grew 3.79% from the end of June last year through March, 7 percentage points slower than the pace in the first half of 2013. A slower pace of debt growth would help ease financial risks in local borrowings that surged 67% to 17.9tn Yuan as of June 2013 from the end of 2010. The government is trying to protect its 7.5% target for gains in gross domestic product this year without reviving a credit boom that has evoked comparisons to the run-up to Japan’s lost decade. (Bloomberg)  China removes cap on FX deposit rates in Shanghai – China expanded banks’ freedom to set foreign-currency deposit rates to all of Shanghai from the city’s free-trade zone, a step toward easing controls across the nation. According to sources the People’s Bank of China (PBOC) will remove the ceiling on foreign-currency deposit rates in Shanghai effective tomorrow for what it described as small accounts. The trial will start with institutional accounts and individual accounts will be added later based on “market conditions.” The PBOC abolished limits on foreign-currency interest rates on March 1 for deposits of less than $3mn inside the trade zone as part of plans to give markets a greater role in setting prices. Governor Zhou Xiaochuan said the central bank, which removed the floor on most lending rates in July 2013, will liberalize state-set deposit rates within one to two years. (Bloomberg)  PBOC’s Ma urges joining TPP to boost growth – In the view of the central bank’s chief research economist, Ma Jun, China would increase the size of its economy by about 2% by joining a Pacific trade pact. Ma Jun said the country should join negotiations on the Trans-Pacific Partnership as soon as possible to reap the benefits. South Korea and Vietnam would also add more than 2% to their GDP as part of the TPP. While joining the talks may help China counter an economic slowdown without resorting to large-scale stimulus, the 12 nations currently negotiating the TPP are expected to wrap up an initial agreement before new members are admitted. The US and Japan said in April that there is “still much work to be done” on outstanding issues. The pact would link an area with about $28tn in annual economic output, or 39% of the world total, and would be the biggest trade deal in US history. In addition to the US and Japan, nations seeking the deal are Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. (Bloomberg) Regional  Moody's: High-risk assets continue to dominate GCC insurers' investment mix – Moody's Investors Service said in a report that GCC insurers continue to face investment risks given the dominance of high-risk assets in their investment mix. Moody's Analyst Mohammed Ali Londe said equity and real estate account for a material portion of GCC insurers' total invested assets. Because of low interest rates in the GCC region, traditional investment options offer low returns as compared to those of equity and real estate, weakening the appeal of traditional investments. Equities remain the key asset class for GCC insurers, accounting for over 40% of the total investments in 2013. Middle Eastern equities have historically provided volatile returns given the market's relatively small size and the recent turbulence in the global financial markets. Furthermore, the Middle East lacks extensive use of risk mitigation strategies such as hedging, and a significant rise in the use of such techniques is unlikely over the medium-term. Real estate is also a key investment class, accounting for over 20% of the total invested assets in 2013. Moody's expects investment strategies of GCC insurers to shift toward higher allocations to lower-risk assets over a period of time. (Bloomberg)  Alhokair completes SR500mn debut Sukuk issue – Saudi- based Fawaz Abdulaziz Alhokair Company (Alhokair) has completed a debut SR500mn five-year Sukuk issue. The company did not provide the pricing of the Sukuk, which was sold in a private placement to investors in Saudi Arabia. Samba Financial Group's investment banking arm arranged the Sukuk sale. (GulfBase.com)  Egypt-Saudi company to invest $245mn in housing units – A housing development company owned by Egypt and Saudi Arabia said it was increasing its capital by $245mn, a four-fold rise, to build houses in Egypt, in a further sign of support for the country from its key Gulf ally. According to sources, Saudi Arabia would inject $124mn into the Saudi Egyptian Construction Company (SECON), with Egypt contributing 100 feddans (103.8 acres) of land in three cities worth about the same amount. Saudi Arabia and its Gulf Arab neighbors Kuwait and the United Arab Emirates have given more than $20bn to help Egypt since the ouster of Islamist President Mohamed Mursi last July following mass protests, leading to the election of Abdel Fattah al-Sisi as president last month. (Reuters)  Zain Saudi signs SR4.5bn supply deals to upgrade network – Mobile Telecommunications Company Saudi Arabia (Zain Saudi) has signed telecommunications infrastructure supply contracts worth SR4.5bn. The turnkey project is to be delivered over three years, providing Zain Saudi with a state-of-the-art modern network to cope with the ever-growing data communication demand. The deal parties are Huawei, Nokia, NEC Corporation, Cisco Systems International and Alcatel Lucent. The company will use its own financial resources to finance the deals. With this, Zain Saudi’s network coverage will increase to 96% and its network capacity & performance will be significantly improved. The agreement is effective from June 25, 2014 and will be in effect for three years. (Tadawul)  SADAFCO declares SR113.75mn dividends – Saudia Dairy and Foodstuff Company’s (SADAFCO) AGM has approved the distribution of dividends amounting to SR113.75mn i.e. 3.50 riyals per share, which is equivalent to 35% of the capital, for the financial year ended March 31, 2014. (Tadawul)  RCCI: Contracting market to register losses by 2014-end – Riyadh Chamber of Commerce and Industry’s (RCCI) Contractor Committee head, Fahad Al-Hammadi, said that the contracting sector is expected to register losses by the end of 2014 due to rising costs of projects and labor, which are estimated at 13%. The contracting sector has experienced rising costs, which came to various commercial, industrial and service sectors arising from decisions issued by the Ministry of Labor. This has resulted in the high percentage of stalled projects at nearly 40% and increased the rate of contractors quitting the market due to losses. He expects the financial statements of nearly 80% of the contracting firms to register losses by the end of the year as a result of the specified problems. According to
  5. 5. Page 5 of 8 experts, the volume of contracting market is expected to hit SR1.13tn in 2015. (GulfBase.com)  Saudi CMA: Listing of Abdul Mohsen Al-Hokair Group on June 26 – The Saudi Capital Market Authority (CMA) has announced that the listing and trading of Abdul Mohsen Al- Hokair Group for Tourism and Development Company will commence on June 26, 2014 under the Hotel & Tourism sector with the symbol 1820, with a fluctuation limit of 10%. (Tadawul)  SWCC provides 60% of Saudi’s desalinated water – Saline Water Conversion Corporation (SWCC) has produced 1bn cubic meters of desalinated water in 2013 to supply the rising demand from a growing population and the energy industry in Saudi Arabia. The company produced 25mn megawatts of power at 27 desalination plants, which provided electricity to 41 cities and housing centers. The production of 3.6mn cubic meters a day of desalinated water by SWCC represented 60% of the Saudi’s output. SWCC is planning to boost water production to 7mn cubic meters a day by 2014. Saudi Arabia has allocated 16.6bn riyals in 2014 for desalination projects. (Bloomberg)  NTA: Phase one of UAE-wide federal railway network to be operational soon – UAE National Transport Authority’s (NTA) Director of Roads & Transport Department, Nazim Assad Bin Taher, said that the 200-kilometre first phase of the UAE-wide federal railway network will be operational in the near future to link Shah area to Ruwais area in western region and provide freight services. It will be followed by the completion of two other phases by the end of 2018. The entire 1200-kilometre double- track network, handling both freight and passenger services will link the UAE to Oman and Saudi Arabia. The phase two of the project will link the Saudi Arabian border to Dubai and extend to Al Ain, while the final phase will include a line running from the northern emirates to the industrial areas of the country. The wider 2,177 km-long GCC rail project will connect all the six Gulf Arab states and has a completion date of 2018. Each of the GCC states will work on an individual link before the common network is connected. (GulfBase.com)  Guinea approves Emirates global's aluminum project – Guinea's parliament has approved amendments in a deal with Emirates Global Aluminium, which will see the start of bauxite production in 2017 and the construction of a 2mn tons per year alumina refinery from 2018. The adoption of the amendments clears the path for the project after Guinea and Abu Dhabi- based Mubadala signed a $5bn agreement in November 2013 to develop a bauxite mine and an alumina refinery in minerals-rich Guinea. The project was previously owned by a consortium that included Dubai Aluminium (Dubal), Mubadala, BHP Billiton & Global Alumina and had planned to build a 2.8mn tons refinery. The project was delayed after failing to raise funds following the financial crisis. Mubadala and Dubal acquired the stakes of BHP and Global Alumina to form Emirates Global Aluminium. Under the terms of the agreement bauxite will be ready for exports by 2017 and the refinery will be operational by 2022. (GulfBase.com)  MICAD: UAE spends AED1bn on water supply in 61 countries – According to the UAE Ministry of Development and International Co-operation (MICAD), the country has offered more than AED1bn in foreign aid over 2009-2013 to help ensure water supply in 61 countries. AED494mn of the AED1bn were channeled to improve basic water supply to households in the targeted countries, of which Afghanistan emerged as the top recipient with AED231mn, while AED352mn of the UAE's aid contributed to the development of river basins in different countries with Sudan receiving the lion's share of AED152.3mn. (Bloomberg)  Travelex buyer Shetty reportedly seeking $600mn acquisition loan – Bavaguthu Raghuram Shetty, an Indian-born entrepreneur buying a controlling stake in Travelex Holdings is seeking about $600mn to finance his share of the deal. Shetty is reportedly engaged in talks with Qatari banks about the loan and expects to appoint an international bank as lead arranger for the transaction. Earlier, in May 2014 London-based Apax Partners has agreed to sell its majority stake in the chain of retail currency exchanges to Shetty and entities linked to Saeed Bin Butti Al Qubaisi’s Abu Dhabi-based Centurion Investments. (Bloomberg)  UAE auto industry reportedly witnessing record sales in 1H2014 –The UAE automobile market has reportedly been witnessing record sales in 1H2014 and the growth is expected to continue with the current investment momentum that has been indicated by positive economic sentiments. The reason behind the rapid growth in the auto business has been the inflow of investments in the country, as global players are gearing up for the Expo 2020 which will be hosted by Dubai. (GulfBase.Com)  Damac launches sale of Fendi-styled villas at Akoya – Damac Properties has launched sales of the world's first Fendi- styled villas. The 34 properties are located in a private-gated community in the 42mn square feet Akoya by Damac master development off Umm Suqeim Road in Dubai. Each unit comes with interior designs and decor from the Fendi Casa range and offers a unique & stylish interpretation of the iconic Italian fashion brand, all of which is uniquely designed by Fendi’s specialist interior designers, to offer a contemporary home for the most prestigious living experience. The villas, which come with a starting price of AED36mn and will be ready in 1Q2017, vary in size from 7,900 sq ft to 16,767 sq ft. (GulfBase.com)  Nakheel to repay entire AED7.9bn bank debt in August – Dubai developer Nakheel will repay all AED7.9bn owed to bank lenders with an early repayment in August 2014, nearly four years before the final loan installment due in March 2018. Nakheel’s scheduled prepayment of AED5.54bn in August will come just six months after its previous early repayment in February 2014, when it paid off AED2.35bn of its bank loan. Nakheel is able to prepay all of its bank debt ahead of schedule due to savings of around AED23bn on its business plan, achieved through improved cash flows generated from property handovers, sales of new projects, leasing, retail, value engineering of ongoing projects and amicable settlements with the majority of trade creditors. (GulfBase.com)  Aristocrat Star teams up with PAL and Pacific Ventures for AED2.4bn property development – Aristocrat Star Real Estate Development signed a JV agreement with PAL Developments and Pacific Ventures to launch AED2.4bn mixed-use development in Dubai in September 2014. This will feature 2,000 units in all, comprising apartments, villas, boutique retail spaces, an office complex and a luxury hotel. The first phase, which will cost about AED900mn, will be launched later in 2014 and upon its completion about 300 units will be delivered by 2H2016. The second phase will take another two years to complete, while the third phase will mark the completion of the project. (GulfBase.com)  Etihad Esco signs agreement with DIFC to reduce energy consumption – Etihad Energy Services Company (Etihad Esco) has signed an agreement with the Dubai International Financial Center (DIFC) to reduce energy consumption and carbon footprint of the properties owned by the DIFC. (GulfBase.com)  GBI extends network to datamena center in Dubai – GBI, a leader in subsea cable network in the Middle East, has
  6. 6. Page 6 of 8 partnered with UAE-based connectivity platform datamena to extend its network from telecom operator Emirates Integrated Telecommunications Company’s (Du) landing station in Fujairah to the datamena data-center in Dubai. The extension of the GBI network will enable all datamena customers to benefit from seamless end-to-end connectivity within the GBI network in Europe, Asia the Middle East & Africa, and will further enhance their datamena experience. The collaboration is between GBI, providers of carrier neutral network connecting the region to the world, and datamena, serving the Middle East and Africa region. (GulfBase.com)  Arabtec construction projects are on track – Arabtec Holding has confirmed that it is proceeding with the construction projects and developing its work activities in order to achieve the highest return to shareholders and investors, commensurate with its position and reputation as a leading UAE company that executes the most prominent projects in the UAE and the region. (DFM)  ADIB opens 79th branch in UAE – Abu Dhabi Islamic Bank (ADIB) has opened its 79th branch in the UAE, at Jumeirah Lake Towers in Dubai. The new branch takes the total number of ADIB branches in Dubai to 16, five of which are in malls. The bank will offer retail and commercial services to customers. (GulfBase.com)  Zurich Insurance, FGB sign general insurance distribution deal – Zurich Insurance Middle East has entered into a long- term agreement with Abu Dhabi-based First Gulf Bank (FGB) to market and distribute its general insurance products in the UAE. Zurich’s market-leading general insurance products will be offered to FGB’s customers through the bank’s online insurance portal. This will include travel, home and motor insurance, with specialist personal lines propositions to be offered in the future. (GulfBase.com)  Tamouh Investments signs working capital facility agreement with Mashreq – Abu Dhabi-based Tamouh Investments signed a working capital facility agreement with Dubai-based Mashreq Bank. The funding will ensure sufficient cash flow for the company’s working capital requirements. Tamouh is the master developer responsible for developing a ‘city within a city’ over an area of 3.3mn square meters on Reem Island. (GulfBase.com)  Abu Dhabi DoF signs deal with ATCUAE – Abu Dhabi Department of Finance (DoF) / General Administration of Customs has signed an agreement with the Automobile & Touring Club of the UAE (ATCUAE) to work together to introduce a global customs transit system in the emirates, which will reduce the time trucks spend at borders from days to hours. (GulfBase.com)  Etihad agrees to acquire 49% stake in Alitalia – Etihad Airways said it had agreed principal terms and conditions to buy a 49% stake in the loss-making Italian airline, Alitalia. Alitalia's board voted on June 13, 2014 to accept an offer by Etihad to invest in the airline. The transaction is subjected to regulatory approvals, and is expected to finalize as soon as possible. (Reuters)  Samena Capital considers selling off parts of RAK Ceramics – Samena Capital is planning potential divestments in Ras Al Khaimah Ceramic Company (RAK Ceramics). Samena’s Vice-Chairman, Shirish Saraf said RAK Ceramics had a lot of growth potential because of the construction boom in the Gulf and rising consumption in Africa and Asia. (Reuters)  Mobily to provide Intel cloud computing services – US- based Intel Corporation has listed Etihad Etisalat Company (Mobily) on its official internet website as a certified, secure and a highly qualified provider of cloud computing services within an elite group of major international companies providing this service. This is in line with Mobily’s strategy to transform to become a key ICT solutions provider by forging alliances with major international companies, to provide an advanced range of services to the business sector in Kingdom, especially cloud computing and information security services. (GulfBase.com)  Jazeera Airways secures $70.5mn debt facility – Jazeera Airways has secured $70.5mn debt facility through Kuwait's Ahli United Bank (AUB) as part of the its strategic debt restructuring plans to align with future growth plans. (Bloomberg)  HSBC Bank Oman appoints Chief Risk Officer – HSBC Bank Oman has appointed Sulaiman bin Said Al Lamki as Chief Risk Officer. Al Lamki will play a key role leading the bank's risk management function, working closely with regional and global risk practitioners, as well as the senior team in Oman, to provide clear direction and sound judgement on all risk matters. Sulaiman joined HSBC Bank Oman in October 2013 and has been working in the regional risk function in Dubai for the last six months. (GulfBase.com)  EHC may privatize MEDC – Electricity Holding Company’s (EHC) CEO, Omar bin Khalfan Al Wahaibi, said that the company is looking at privatizing Muscat Electricity Distribution Company (MEDC) either through an IPO or by selling ownership to a strategic partner or a combination of both. A consultant will be selected soon to study the privatization proposal. (GulfBase.com)  TRA, Huawei join hands to train Omani graduates – Huawei in association with the Telecommunications Regulatory Authority of Oman (TRA) have announced the launch of a new internship program to support Omani university graduates in pursuing a career within the region's growing telecommunications industry. (GulfBase.com)  India-Oman trade pegged at $5.77bn – According to the latest data, the trade between India and Oman has increased to $5.77bn in 2013-14, registering an impressive growth of 25% over the previous year with exports from Oman growing at a much faster rate of 47%. Indian and Omani firms have undertaken joint ventures in a wide range of sectors including fertilizers, energy, engineering, and IT. At last count, there were over 1,500 Indo-Omani joint ventures in the Sultanate with an investment of $7.5bn of which the Indian investment was estimated at $4.5bn. (GulfBase.com)  CBO: Omani banks’ credit disbursals stands at OMR15.8bn – According to the Central Bank Oman (CBO), commercial banks in the Sultanate disbursed credit amounted to around OMR15.8bn as of April 2014, reflecting a rise of 10.6% as compared to transactions conducted during the year-ago period. Credit to the government declined by 39.8%, while credit to the private sector & public enterprises increased by 10.5% and 11%, respectively. The banking sector in Oman continued its positive growth trend with major accretion to bank deposits and strong growth in loans and advances. Total assets of commercial banks grew by 12% to OMR24.2bn in April 2014 as compared to OMR21.6bn a year ago. According to the report, the gross domestic product at current prices rose by 2.8% to OMR30.6bn in 2013. On the price front, inflation has been well contained with the average annual inflation based on the CPI for the Sultanate at 1.0% in April 2014. On the liabilities side of the balance sheet, total deposits held with commercial banks also witnessed a significant rise of 13.3% to OMR16.8bn in April 2014 from OMR14.8bn in April 2013. Government deposits with commercial banks increased by 17.8% to OMR5.1bn, while
  7. 7. Page 7 of 8 deposits of public enterprises increased by 12.8% to OMR1.1bn over the same period. (GulfBase.com)  Oman ruler suspends decision to scrap price controls after public uproar – Oman's ruler Sultan Qaboos bin Said has put on hold the government's decision to scrap price controls for most products after a public uproar triggered an intervention by his consultative council. Under new rules announced last week, retailers and traders no longer needed to ask the government for permission to raise prices, except for 23 basic items such as rice, tea and fish which remained controlled. (Reuters)  GIC sells 13.24% stake in A'Saffa Foods to Al-Hosn Investment – Gulf Investment Corporation (GIC) has sold 15.890mn shares, representing a 13.24% stake of A'Saffa Foods, to Al-Hosn Investment Company. (MSM)  Oman fund to rescue Corpbank – Oman's sovereign wealth fund held talks with the Bulgarian government and central bank recently about recapitalizing Corporate Commercial Bank (Corpbank). The sovereign wealth fund is Corpbank's second- biggest shareholder, owing a stake of about 30%. (Reuters)  Bahrain Parliament approves new building rule changes – Bahrain Parliament has approved Shura Council's amendments to a new building regulation law that gives Bahrain's municipalities the power to demolish buildings in violation of the regulations without a court order. Higher fines can also be imposed under the law. MPs also approved plans to sign an aviation convention with Pakistan and voted in favor of Shura's amendments to their plans to scrap Manama Municipal Council. (GulfBase.com)  Seef Properties partners Menatelecom to provide free high- speed internet access – Seef Properties has partnered with Menatelecom, a wholly-owned subsidiary of Kuwait FinanceHouse, to use Menatelecom’s 4G LTE network to provide free high-speed internet access to shoppers at Seef Mall. (GulfBase.com)  Petra Solar completes installation of largest smart solar project in Middle East – US-based Petra Systems’ wholly- owned subsidiary, Petra Solar has completed the installation of the largest smart solar power plant in Middle East with the help of partner Caspian Renewable Energy. The five-megawatt (MW) project will be owned by Bahrain Petroleum Company (Bapco) and will deliver in excess of 8,000 MWh of clean renewable energy. This capacity in real terms will present an energy offset of 67,000 Mcf of natural gas and a savings of 6,900 metric tons of carbon dioxide emissions each year. (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 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 QE Index S&P Pan Arab S&P GCC 0.6% (1.8%) 0.4% 0.2% 0.0% 1.9% 6.1% (4.0%) (2.0%) 0.0% 2.0% 4.0% 6.0% 8.0% SaudiArabia Qatar Kuwait Bahrain Oman AbuDhabi Dubai Asset/Currency Performance Close ($) 1D% WTD% YTD% Global Indices Performance Close 1D% WTD% YTD% Gold/Ounce 1,319.19 0.1 0.3 9.4 DJ Industrial 16,867.51 0.3 (0.5) 1.8 Silver/Ounce 21.04 0.5 0.8 8.0 S&P 500 1,959.53 0.5 (0.2) 6.0 Crude Oil (Brent)/Barrel (FM Future) 114.00 (0.4) (0.7) 2.9 NASDAQ 100 4,379.76 0.7 0.3 4.9 Natural Gas (Henry Hub)/MMBtu 4.57 1.6 1.2 5.1 STOXX 600 341.94 (1.1) (1.8) 4.2 LPG Propane (Arab Gulf)/Ton 108.50 0.5 (0.2) (14.2) DAX 9,867.75 (0.7) (1.2) 3.3 LPG Butane (Arab Gulf)/Ton 127.00 (0.4) (1.2) (6.4) FTSE 100 6,733.62 (0.8) (1.3) (0.2) Euro 1.36 0.2 0.2 (0.8) CAC 40 4,460.60 (1.3) (1.8) 3.8 Yen 101.87 (0.1) (0.2) (3.3) Nikkei 15,266.61 (0.7) (0.5) (6.3) GBP 1.70 (0.0) (0.2) 2.6 MSCI EM 1,041.78 (0.6) (0.2) 3.9 CHF 1.12 0.1 0.2 0.0 SHANGHAI SE Composite 2,025.50 (0.4) (0.1) (4.3) AUD 0.94 0.4 0.2 5.5 HANG SENG 22,866.70 (0.1) (1.4) (1.9) USD Index 80.23 (0.1) (0.2) 0.2 BSE SENSEX 25,313.74 (0.2) 0.8 19.6 RUB 33.76 (0.0) (2.1) 2.7 Bovespa 53,425.74 (1.6) (2.2) 3.7 BRL 0.45 0.7 1.0 7.0 RTS 1,383.02 (2.7) 1.8 (4.1) 173.9 148.4 131.7

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