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Weekly market report

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  • 1. Page 1 of 5 Market Review and Outlook QE Index and Volume The Qatar Exchange (QE) Index gained 413.34 points, or 3.45%, during the trading week, to close at 12,397.21 points. Market capitalization increased by 6.09% to reach QR709.2 billion (bn) as compared to QR668.5bn at the end of the previous week. Of the 43 listed companies, 38 companies ended the week higher, while 5 fell. Ezdan Holding Group (ERES) was the best performing stock for the week, with a gain of 48.24% on 3.8 million (mn) shares traded. On the other hand, Islamic Holding Group (IHGS) was the worst performing stock with a decline of 14.95% on only 2.5mn shares traded. QNB Group kick-started the earnings season and posted a net profit of QR2.4bn in first quarter of 2014 (1Q2014), up by 13.7% year-over-year (YoY). Net interest income increased by 25.7% YoY to reach QR3.0bn, with net fee and commission income and net gain from foreign exchange reaching QR0.5bn and QR0.2bn. Moreover, QNB Group maintained its cost-to-income ratio at 21.7%. Total assets increased by 20.6% YoY to reach QR458bn. This was due to a strong growth rate of 22.5% YoY in loans and advances, which reached QR317bn. At the same time, QNB Group increased customer funding by 23.4% to QR346bn. The Group was able to maintain the ratio of non-performing loans to gross loans at 1.6% while the coverage ratio reached 126%. The Group started implementing updated Qatar Central Bank (QCB) and Basel III requirements for the calculation of the Capital Adequacy Ratio (CAR) from 1Q2014. The ratio stood at 16.3% as at 31 March 2014, higher than the regulatory minimum requirements of the QCB. Trading value during the week increased by 59.28% to reach QR6.31bn vs. QR3.96bn in the prior week. The Banks & Financial Services sector led the trading value during the week, accounting for 25.9% of the total equity trading value. Barwa Real Estate (BRES) was the top value traded stock during the week with total traded value of QR586.3mn. Trading volume increased by 88.77% to reach 176.6mn shares vs. 93.6mn shares in the prior week. The number of transactions rose by 48.4% to reach 69,084 transactions versus 46,542 transactions in the prior week. The Real Estate sector led the trading volume, accounting for 37.3%. Mazaya Qatar Real Estate Development (MRDS) was the top volume traded stock during the week with total traded volume of 28.9mn shares. Foreign institutions remained bullish for the week with net buying of QR264.9mn vs. net buying of QR340.9mn in the prior week. Qatari institutions remained bearish with net selling of QR209.4mn vs. net selling of QR95.0mn the week before. Foreign retail investors remained bearish for the week with net selling of QR30.3mn vs. net selling of QR53.5mn in the prior week. Qatari retail investors remained bearish with net selling of QR25.9mn vs. QR191.6mn the week before. Market Indicators Week ended Apr 10, 2014 Week ended Apr 03, 2014 Chg. % Value Traded (QR mn) 6,306.4 3,959.3 59.3 Exch. Market Cap. (QR mn) 709,196.8 668,463.0 6.1 Volume (mn) 176.6 93.6 88.8 Number of Transactions 69,084 46,542 48.4 Companies Traded 43 43 0.0 Market Breadth 38:5 38:5 – Market Indices Close WTD% MTD% YTD% Total Return 18,486.91 3.7 6.8 24.7 All Share Index 3,198.27 4.0 6.9 23.6 Banks/Financial Svcs. 3,042.81 3.4 6.5 24.5 Industrials 4,306.85 2.0 4.4 23.0 Transportation 2,237.95 7.1 10.7 20.4 Real Estate 2,472.88 7.3 10.3 26.6 Insurance 3,159.85 8.9 12.2 35.3 Telecoms 1,651.58 4.6 8.3 13.6 Consumer 7,529.51 6.6 8.4 26.6 Al Rayan Islamic Index 4,007.19 8.2 12.0 32.0 Market Indices Weekly Index Performance Regional Indices Close WTD% MTD% YTD% Weekly Exchange Traded Value ($ mn) Exchange Mkt. Cap. ($ mn) TTM P/E** P/B** Dividend Yield Qatar (QE)* 12,397.21 3.4 6.5 19.4 1,731.91 194,745.5 15.7 2.0 4.0 Dubai 4,839.39 4.8 8.7 43.6 3,007.27 96,232.0 20.8 1.8 2.1 Abu Dhabi 5,177.71 5.1 5.8 20.6 1,752.11 135,853.2 15.6 1.9 3.5 Saudi Arabia 9,508.57 (0.6) 0.3 11.4 15,055.59 516,987.0# 19.5 2.4 3.1 Kuwait 7,573.84 0.0 0.0 0.3 579.81 117,727.0 17.3 1.2 3.9 Oman 6,809.37 0.5 (0.7) (0.4) 135.94 24,545.9 11.3 1.6 3.9 Bahrain 1,382.19 1.1 1.9 10.7 17.36 52,752.6 9.7 0.9 5.0 Source: Bloomberg, country exchanges and Zawya (** Trailing Twelve Months; * Value traded ($ mn) do not include special trades, if any) (#Data as of April 09, 2014) 12,098.46 12,216.75 12,189.69 12,375.03 12,397.21 0 25,000,000 50,000,000 11,900 12,175 12,450 6-Apr 7-Apr 8-Apr 9-Apr 10-Apr Volume QE Index 5.1% 4.8% 3.4% 1.1% 0.5% 0.0% (0.6%) (3.5%) 0.0% 3.5% 7.0% AbuDhabi Dubai Qatar Bahrain Oman Kuwait SaudiArabia
  • 2. Page 2 of 5 News Economic News  Fitch: Qatar’s non-oil growth to pick up in 2014 – According to Fitch Ratings, Qatar‟s non-oil economic growth is forecast to pick up in 2014. The rating agency added that Qatar‟s high government capital spending and population growth should sustain double-digit non-hydrocarbon growth. The country‟s planned huge project spending brings management challenges and overcapacity risks. However, benign external environment is keeping its inflation under control despite rising rents. Fitch said the average sovereign ratings of energy exporters and importers in the Middle East & North Africa region (MENA) have further diverged in 2014. Credit fundamentals across all energy exporters are expected to remain strong, driven by triple digit oil prices. Fitch forecasts that Brent crude will average $105 per barrel in 2014 and $100 per barrel in 2015. As a result, all energy exporters are expected to record external surpluses and all (except Bahrain – „BBB‟) are forecast to post fiscal surpluses in 2014 and 2015. Fitch assumes that economic performance would improve in most energy importers as well in 2014 due to greater external financial support, a recovery in the Eurozone and improved political stability in some cases. We note QNB Group expects Qatar‟s real GDP to grow by 6.8% in 2014. (Peninsula Qatar) Market & Corporate News  QNBK reports QR2.4bn net profit in 1Q2014 – QNB Group (QNBK) reported a net profit of QR2.4bn in 1Q2014, up by 13.7% YoY. This was driven by operating income, including the share of results from associates, which increased to QR3.7bn, up by 26.2% YoY. Net interest income increased by 25.7% YoY to reach QR3.0bn, with net fee and commission income and net gain from foreign exchange reaching QR0.5bn and QR0.2bn. Moreover, QNB Group maintained its cost-to-income ratio at 21.7%. Total assets increased by 20.6% YoY to reach QR458bn, the highest ever achieved by the Group. This was due to a strong growth rate of 22.5% (YoY) in loans and advances which reached QR317bn. At the same time, QNB Group increased customer funding by 23.4% to QR346bn. This led to a loans to deposits ratio of 92%. The Group was able to maintain the ratio of non-performing loans to gross loans at 1.6% while the coverage ratio reached 126%. The Group started implementing updated QCB and Basel III requirements for the calculation of the Capital Adequacy Ratio (CAR) from 1Q2014. The ratio stood at 16.3% as at 31 March 2014, higher than the regulatory minimum requirements of the QCB. The Group is keen to maintain a strong capitalization in order to support future strategic plans. (QNB Group Press Release)  IHGS reports net profit of QR3mn in 1Q2014 – Islamic Holding Group (IHGS) has reported a net profit of QR3mn in 1Q2014, indicating a growth of 46.6% QoQ. On YoY basis, the net profit rose by 40.8%. Earnings per share stood at QR0.74 in 1Q2014 versus QR0.53 in 1Q2013. Further, brokerage & commission income (net) rose by 13.5% QoQ (118.9% YoY) to QR5.1mn. The jump in profits was supported by a jump in net brokerage and commission income and lower impairment losses on available for sale investments. (QE)  QIGD 1Q2014 net profit up by 10.4% YoY – Qatari Investors Group (QIGD) reported a net profit of QR58.6mn in 1Q2014 vs. QR53.1mn in 1Q2013. EPS amounted to QR0.47 as of March 31, 2014 versus QR0.43 during the same period last year. (QE)  DHBK to inject $25mn to expand in India – Doha Bank (DHBK) will initially invest $25mn into its India operations and is set to invest heavily into trade finance, corporate banking and treasury services. DHBK‟s CEO R Seetharaman said the lender would initially operate as a branch for which it got a license. After opening its first branch in Mumbai, the bank will further expand into South India, probably in the state of Kerala to start with, where most of the expatriates from the Gulf are stationed. In addition, the lender would like to be present in cities with trade links with GCC countries such as the states of Tamil Nadu, Gujarat and others. DHBK has an exposure of around $1bn in India and expects to take it to around $5bn over the next two to three years. (Bloomberg)  Barwa eyes global expansion, but focus remains on Qatar – Barwa Real Estate Group (BRES) has plans to expand its operations internationally in 2014, although its top priority is to focus on its investments in Qatar. BRES‟ board of director Mohamad Abdulaziz Saad al-Saad said the majority of its investments will be made in Qatar, although there are other international projects in the pipeline. Al-Saad said the second part is dedicated for international expansion, although it is going to be much smaller in size as compared to its local plans. However, international expansion is still an important tool in the company‟s continued operations, particularly from a diversification perspective. Al-Saad added that the company will not compete with smaller industry players. BRES elected a new set of board of directors. The new board members are Sheikh Khalid bin Khalifa al-Thani, representing Milaha (QNNS), Mohamed Ibrahim Mohamed Yaqoub al-Sulaiti, Mohamed Abdulaziz Saad al-Saad, and Abdullah Abdulaziz Nasir al- Atiyya, representing Aludaid Real Estate Investment Company (Gulf-Times.com, Gulf-Base.com)  QATI to publish 1Q2014 results on April 15 – The Qatar Insurance Company (QATI) has announced its intent to disclose the company‟s 1Q2014 results on April 15, 2014. (QE)  QGRI signs a leasing contract with QP for WTCT – Qatar General Insurance & Reinsurance Company (QGRI) has signed a leasing contract with Qatar Petroleum (QP), allowing QP to lease the entire World Trade Centre Tower (WTCT) owned by QGRI located at the Cornish of Doha. (QE)  QEWS to disclose 1Q2014 financials on April 21 – Qatar Electricity & Water Company (QEWS) has announced its intent to disclose the company‟s 1Q2014 results on April 21, 2014. (QE)  MPHC to disclose 1Q2014 results on April 22 – Mesaieed Petrochemical Holding Company (MPHC) has announced that it will disclose its 1Q2014 financial results on April 22, 2014. (QE)  KCBK to disclose 1Q2014 financials on April 22 – Al Khalij Commercial Bank (KCBK) will disclose its 1Q2014 financial results on April 22, 2014. (QE)  MCCS to disclose 1Q2014 financials on April 23 – Mannai Corporation Company (MCCS) has announced its intent to disclose its 1Q2014 financial results on April 23, 2014. (QE)  IQCD to disclose 1Q2014 results on April 27 – Industries Qatar (IQCD) has announced that it will disclose its 1Q2014 financial results on April 27, 2014. (QE)  QNNS to disclose 1Q2014 results on April 28 – Milaha (QNNS) has announced that it will disclose its 1Q2014 financial results on April 28, 2014. (QE)  NLCS to disclose 1Q2014 results on April 30 – Alijarah Holding Company (NLCS) has announced that it will disclose its 1Q2014 financial results on April 30, 2014. (QE)
  • 3. Page 3 of 5 Qatar Exchange Top 5 Gainers Top 5 Decliners Source: Qatar Exchange (QE) Source: Qatar Exchange (QE) Most Active Shares by Value (QR Million) Most Active Shares by Volume (Million) Source: Qatar Exchange (QE) Source: Qatar Exchange (QE) Investor Trading Percentage to Total Value Traded Net Traded Value by Nationality (QR Million) Source: Qatar Exchange (QE) Source: Qatar Exchange (QE) 48.2% 44.7% 40.7% 24.7% 18.1% 0.0% 20.0% 40.0% 60.0% Ezdan Real Estate Mazaya Qatar Gulf Warehousing Widam Food Co. Dlala Holding -15.0% -2.0% -1.0% -1.0% -0.5% -18.0% -12.0% -6.0% 0.0% Islamic Holding Group Barwa Real Estate Industries Qatar Qatar National Cement Al Khaliji 586.3 564.4 433.5 385.9 322.9 0.0 200.0 400.0 600.0 Barwa Real Estate Mazaya Qatar Qatari Investors Group United Development Vodafone Qatar 28.9 23.3 17.5 15.7 7.6 0.0 10.0 20.0 30.0 Mazaya Qatar Vodafone Qatar United Development Barwa Real Estate Qatar & Oman Investment 0% 20% 40% 60% 80% 100% Buy Sell 53.12% 53.53% 17.43% 20.75% 15.78% 16.26% 13.67% 9.47% Qatari Individuals Qatari Institutions Non-Qatari Individuals Non-Qatari Institutions 4,449 1,857 4,684 1,623 (235) 235 (1,000) - 1,000 2,000 3,000 4,000 5,000 Qatari Non-Qatari Net Investment Total Sold Total Bought
  • 4. Page 4 of 5 TECHNICAL ANALYSIS OF THE QE INDEX Source: Bloomberg The QE Index extended its phenomenal run for the fourth consecutive week rallying more than 400 points. However, it later trimmed its gains on Thursday after reaching a 52-week high of 12,465.50 to finally close last week at 12,397.21. The index after pausing for just a single day on Tuesday registered gains on every single trading session indicating sustained buying interest. Moreover, the index breached the important 12,000.0 mark and recorded strong gains reaching its highest level since 2008, which is a positive development. We believe the index has been in strong bull-run mode tagging higher highs and higher lows. Meanwhile, the index may continue to proceed ahead as it has strong momentum going in and advance toward the 12,450.0-12,513.65 levels. This is a crucial level which the index needs to surpass in order to move closer to its all-time highs. However, any failure to clear the 12,450.0-12,513.65 levels may result in consolidation. The index has support near 12,300.0 below which there would be a buying opportunity near the 12,220.0 level. Further, both the indicators favor a further upside by remaining in bullish zone. Thus, traders may continue to adopt a bullish approach, but must also exercise caution following strict stop losses. DEFINITIONS OF KEY TERMS USED IN TECHNICAL ANALYSIS RSI (Relative Strength Index) indicator – RSI is a momentum oscillator that measures the speed and change of price movements. The RSI oscillates between 0 to 100. The index is deemed to be overbought once the RSI approaches the 70 level, indicating that a correction is likely. On the other hand, if the RSI approaches 30, it is an indication that the index may be getting oversold and therefore likely to bounce back. MACD (Moving Average Convergence Divergence) indicator – The indicator consists of the MACD line and a signal line. The divergence or the convergence of the MACD line with the signal line indicates the strength in the momentum during the uptrend or downtrend, as the case may be. When the MACD crosses the signal line from below and trades above it, it gives a positive indication. The reverse is the situation for a bearish trend. Candlestick chart – A candlestick chart is a price chart that displays the high, low, open, and close for a security. The „body‟ of the chart is portion between the open and close price, while the high and low intraday movements form the „shadow‟. The candlestick may represent any time frame. We use a one-day candlestick chart (every candlestick represents one trading day) in our analysis. Doji candlestick pattern – A Doji candlestick is formed when a security's open and close are practically equal. The pattern indicates indecisiveness, and based on preceding price actions and future confirmation, may indicate a bullish or bearish trend reversal. Shooting Star/Inverted Hammer candlestick patterns – These candlestick patterns have a small real body (open price and close price are near to each other), and a long upper shadow (large intraday movement on the upside). The Shooting Star is a bearish reversal pattern that forms after a rally. The Inverted Hammer looks exactly like a Shooting Star, but forms after a downtrend. Inverted Hammers represent a potential bullish trend reversal.
  • 5. Contacts Saugata Sarkar Keith Whitney Sahbi Kasraoui Head of Research Head of Sales Manager - HNWI Tel: (+974) 4476 6534 Tel: (+974) 4476 6533 Tel: (+974) 4476 6544 saugata.sarkar@qnbfs.com.qa keith.whitney@qnbfs.com.qa sahbi.alkasraoui@qnbfs.com.qa QNB Financial Services SPC Contact Center: (+974) 4476 6666 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 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 5 of 5 Source: Bloomberg Company Name Price (April 10) % Change 5- Day % Change YTD Market Cap. QR Million TTM P/E P/B Div. Yield Qatar National Bank 195.90 0.72 13.90 137,077 14.0 2.7 3.6 Qatar Islamic Bank 79.70 5.56 15.51 18,833 14.1 1.6 5.0 Commercial Bank of Qatar 69.70 6.09 18.14 20,696 12.9 1.3 2.4 Doha Bank 62.10 3.85 6.70 16,045 10.8 1.4 7.2 Al Ahli Bank 52.00 1.36 22.91 8,590 16.3 2.4 N/A Qatar International Islamic Bank 83.50 10.89 35.33 12,639 16.8 2.4 4.5 Masraf Al Rayan 43.80 5.93 39.94 32,850 19.3 3.1 3.4 Al Khaliji Bank 22.64 (0.53) 13.26 8,150 14.8 1.4 4.4 National Leasing 32.90 8.40 9.12 1,628 18.7 1.3 4.6 Dlala Holding 28.00 18.09 26.70 622 N/M 2.8 N/A Qatar & Oman Investment 13.50 0.30 7.83 425 21.4 1.3 4.4 Islamic Holding Group 66.00 (14.95) 43.48 264 26.7 4.5 2.6 Banking and Financial Services 257,820 Zad Holding 80.20 11.54 15.40 1,049 10.6 0.8 5.0 Qatar German Co. for Medical Devices 14.00 7.69 1.08 162 N/M 0.9 N/A Salam International Investment 13.29 8.05 2.15 1,519 13.4 0.9 7.5 Medicare Group 78.90 5.91 50.29 2,221 24.8 2.7 2.3 Qatar Cinema & Film Distribution 43.00 2.38 7.23 246 21.5 1.7 4.7 Qatar Fuel 260.40 4.58 19.16 21,993 18.1 3.5 3.0 Qatar Meat and Livestock 63.10 24.70 22.05 1,136 20.7 4.5 3.3 Al Meera Consumer Goods 181.00 11.59 35.78 3,620 17.6 2.7 4.4 Consumer Goods and Services 31,945 Qatar Industrial Manufacturing 45.10 2.97 6.96 2,143 10.6 1.5 5.5 Qatar National Cement 128.70 (1.00) 8.15 6,319 14.5 2.5 4.6 Industries Qatar 184.50 (1.02) 9.24 111,623 13.9 3.3 6.0 Qatari Investors Group 59.00 5.73 35.01 7,335 32.4 3.4 1.3 Qatar Electricity and Water 185.20 4.34 12.00 20,372 14.7 3.3 3.7 Mannai Corp. 103.30 12.28 14.91 4,712 10.7 2.1 5.3 Aamal 16.77 11.80 11.80 10,062 20.0 1.5 N/A Gulf International Services 91.00 4.48 86.48 16,912 25.0 5.5 1.8 Mesaieed Petrochemical Holding 36.80 2.08 N/A 46,232 N/A N/A 1.0 Industrials 225,711 Qatar Insurance 74.40 11.04 39.85 11,944 14.6 2.3 2.7 Doha Insurance 24.30 3.85 (2.80) 625 9.3 1.1 8.2 Qatar General Insurance & Reinsurance 41.00 2.50 2.71 2,836 1.3 0.6 3.0 Al Khaleej Takaful Insurance 35.30 4.13 25.73 784 11.9 1.3 1.8 Qatar Islamic Insurance 69.50 8.76 20.03 1,043 16.4 3.8 5.4 Insurance 17,232 United Development 22.40 6.92 4.02 7,932 24.6 0.8 4.3 Barwa Real Estate 37.00 (1.99) 24.16 14,398 12.2 1.0 5.4 Ezdan Real Estate 25.20 48.24 48.24 66,843 N/M 2.3 1.2 Mazaya Qatar Real Estate Development 22.00 44.74 96.78 2,200 16.4 1.8 2.7 Real Estate 91,372 Qatar Telecom 147.90 4.23 7.80 47,375 18.4 1.9 2.7 Vodafone Qatar 13.80 6.65 28.85 11,667 N/M 2.0 N/A Telecoms 59,042 Qatar Navigation (Milaha) 97.00 3.85 16.87 11,109 11.6 0.9 5.2 Gulf Warehousing 63.30 40.67 52.53 3,011 29.6 3.7 2.4 Qatar Gas Transport (Nakilat) 21.35 3.54 5.43 11,956 16.2 2.7 5.2 Transportation 26,076 Qatar Exchange 709,197

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