Page 1 of 5
Market Review and Outlook QE Index and Volume
The Qatar Exchange (QE) Index gained 403.95 points, or 3.22%,
du...
Page 2 of 5
News
Market & Corporate News
 DHBK posts QR399.3mn net profit in 1Q2014 – DHBK
reported a net profit of QR399...
Page 3 of 5
Qatar Exchange
Top 5 Gainers Top 5 Decliners
Source: Qatar Exchange (QE) Source: Qatar Exchange (QE)
Most Acti...
Page 4 of 5
TECHNICAL ANALYSIS OF THE QE INDEX
Source: Bloomberg
The QE Index extended its phenomenal run for the sixth st...
Contacts
Saugata Sarkar Keith Whitney Sahbi Kasraoui
Head of Research Head of Sales Manager - HNWI
Tel: (+974) 4476 6534 T...
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Weekly market report

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  1. 1. Page 1 of 5 Market Review and Outlook QE Index and Volume The Qatar Exchange (QE) Index gained 403.95 points, or 3.22%, during the trading week, to close at 12,954.93 points. Market capitalization increased by 9.28% to reach QR796.2 billion (bn) as compared to QR728.6bn at the end of the previous week. Of the 43 listed companies, 34 companies ended the week higher, while 8 fell and 1 remained unchanged. Ezdan Holding Group (ERES) was the best performing stock for the week, with a gain of 60.45% on 4.9 million (mn) shares traded. On the other hand, Zad Holding (ZHCD) was the worst performing stock with a decline of 6.02% on only 0.5 million (mn) shares traded. During the week, Doha Bank (DHBK), Al Khalij Commercial Bank (KCBK, Masraf Al Rayan (MARK and Qatar Electricity & Water Co. (QEWS) reported their first quarter 2014 (1Q2014) results. DHBK posted a net profit of QR399.3mn. Net profit expanded by 69.5% quarter-over-quarter (QoQ) due to a drop in provisions (down 45.8%), gains from investment income (QR74.4mn vs. 5.7mn in 4Q2013) and a softening in operating expenses (down 18.3%). MARK reported an 8% year-over-year (YoY) growth in net profit reaching QR432.3mn in 1Q2014. Net income from financing and investments was up a marginal 0.59% to QR618.96mn, but net fees and commissions significantly grew by 97% to QR62.8mn. KCBK reported a net profit of QR109.2mn in 1Q2014, dropping by 28.5% and 16.9% QoQ and YoY, respectively. Profitability was dampened due to muted investment income (QR9.1mn vs. QR43.4mn in 4Q2013). The bank’s net interest income grew by 12.4% QoQ (+6.7% YoY) to QR165.9mn Trading value during the week increased by 34.84% to reach QR7.34bn vs. QR5.44bn in the prior week. The Banks & Financial Services sector led the trading value during the week, accounting for 27.35% of the total equity trading value. Barwa Real Estate Company (BRES) was the top value traded stock during the week with total traded value of QR675.3mn. Trading volume increased by 26.22% to reach 212.8mn shares vs. 168.6mn shares in the prior week. The number of transactions increased by 18.24% to reach 77,279 transactions versus 65,359 transactions in the prior week. The Real Estate sector led the trading volume, accounting for 27.65%. Vodafone Qatar (VFQS) was still the top volume traded stock during the week with total traded volume of 32.6mn shares. Foreign institutions remained bullish for the week with net buying of QR347.3mn vs. net buying of QR246.1mn in the prior week. Qatari institutions remained bearish with net selling of QR204.1mn vs. net selling of QR206.4mn the week before. Foreign retail investors turned bullish for the week with net buying of QR40.4mn vs. net selling of QR34.3mn in the prior week. Qatari retail investors remained bearish with net selling of QR183.5mn vs. QR4.9mn the week before. Market Indicators Week ended Apr 24, 2014 Week ended Apr 17, 2014 Chg. % Value Traded (QR mn) 7,341.7 5,444.8 34.8 Exch. Market Cap. (QR mn) 796,220.0 728,590.7 9.3 Volume (mn) 212.8 168.6 26.2 Number of Transactions 77,279 65,359 18.2 Companies Traded 43 43 0.0 Market Breadth 34:8 27:13 – Market Indices Close WTD% MTD% YTD% Total Return 19,318.59 3.2 11.6 30.3 All Share Index 3,334.21 3.0 11.4 28.9 Banks/Financial Svcs. 3,182.36 3.2 11.4 30.2 Industrials 4,454.69 2.3 8.0 27.3 Transportation 2,366.25 5.1 17.1 27.3 Real Estate 2,617.31 6.2 16.7 34.0 Insurance 3,373.41 3.6 19.8 44.4 Telecoms 1,736.67 1.4 13.9 19.5 Consumer 7,528.54 0.1 8.4 26.6 Al Rayan Islamic Index 4,275.61 4.3 19.5 40.8 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)* 12,954.93 3.2 11.3 24.8 2,016.55 218,721.6 16.3 2.1 3.9 Dubai 5,088.48 6.9 14.3 51.0 3,893.82 98,334.2 21.5 1.9 2.0 Abu Dhabi 5,171.20 0.3 5.7 20.5 1,448.56 134,736.2 15.4 1.9 3.4 Saudi Arabia 9,556.64 0.3 0.9 12.0 14,727.02 516,811.4# 19.8 2.5 3.0 Kuwait 7,448.44 (0.0) (1.6) (1.3) 484.95 116,324.8 16.8 1.2 4.0 Oman 6,772.63 (1.0) (1.2) (0.9) 106.04 24,379.5 11.7 1.6 3.9 Bahrain 1,418.84 2.1 4.6 13.6 9.13 53,304.0 9.9 1.0 4.8 Source: Bloomberg, country exchanges and Zawya (** Trailing Twelve Months; * Value traded ($ mn) do not include special trades, if any) (#Data as of April 23, 2014) 12,578.58 12,768.17 12,939.80 12,961.56 12,954.93 0 35,000,000 70,000,000 12,300 12,650 13,000 20-Apr 21-Apr 22-Apr 23-Apr 24-Apr Volume QE Index 6.9% 3.2% 2.1% 0.3% 0.3% 0.0% (1.0%)(3.5%) 0.0% 3.5% 7.0% 10.5% Dubai Qatar Bahrain AbuDhabi SaudiArabia Kuwait Oman
  2. 2. Page 2 of 5 News Market & Corporate News  DHBK posts QR399.3mn net profit in 1Q2014 – DHBK reported a net profit of QR399.3mn vs. our estimate of QR379.2mn (BBG consensus: QR362.6mn). Net profit expanded by 69.5% QoQ due to a drop in provisions (down 45.8%), gains from investment income (QR74.4mn vs. 5.7mn in 4Q2013) and a softening in operating expenses (down 18.3%). On a YoY basis, net income was marginally up by 1.0%. This was mainly driven by net interest income, which was expanded by 14.0%. Net loans and deposits grew by 5.6% and 2.2% YTD, respectively. Thus the LDR rested at 100% vs. 97% at the end of 2013. (QNBFS Research, Gulf-Times.com)  MARK posts 8% gain in 1Q2014 profit to QR432.27mn – Masraf Al Rayan (MARK) has reported an 8% growth in net profit to QR432.3mn in 1Q2014 vs. our estimate of QR418.6mn. Total expenses grew much faster than total income. Net income from financing and investments was up a mere 0.59% to QR618.96mn, but that from net fees and commissions jumped 97% to QR62.77mn. Net foreign exchange gains grew 41% to QR18.2mn and other income more than doubled to QR3.07mn; even as share of results of associate and joint venture dropped by 54% to QR4.94mn. MARK’ CEO Adel Mustafawi said total assets grew 11% to QR69.36bn with loans and advances at QR45.64bn, which was up 10% YoY. Customers’ deposits increased 15% to QR52.34bn. (Gulf-Times.com)  QIIK's 1Q2014 net profit jumps 10.2% to QR204mn – Qatar International Islamic Bank (QIIK) posted 1Q2014 net profit of QR204mn (inline with our estimate of QR201.1mn), up 10.2% on the same period last year. QIIK’s CEO Abdulbasit A. al- Shaibei said the bank's total income in the first quarter of 2014 reached QR362.2mn compared with QR335.9mn in the corresponding period last year. Total assets reached QR34bn in the first quarter compared with QR29.3bn in 1Q2013. Financing assets grew by 27.5 YoY, reaching QR19.9bn . Deposits totaled QR24.7bn in 1Q2014, a growth of 21% over the corresponding period in 2013. (Gulf-Times.com)  KCBK 1Q2014 net profit drops QoQ and YoY – Al Khalij Commercial Bank (KCBK) reported a net profit of QR109.2mn in 1Q2014 (vs. our estimate of QR125.4mn), dropping by 28.5% and 16.9% QoQ and YoY, respectively. Weak QoQ results were due to muted investment income (QR9.1mn vs. QR43.4mn in 4Q2013). The bank’s net interest income grew by 12.4% QoQ (+6.7% YoY) to QR165.9mn. Fees and commissions grew by 11.3% QoQ (down 20.0% YoY) to QR37.8mn. On the other hand, operating expenses increased by 5.0% and 7.3% QoQ and YoY, respectively to QR104.5mn. As such, the cost-to-income ratio deteriorated to 48.9% in 1Q2014 vs. 40.7% in 4Q2013 (42.1% in 1Q2013). The YoY drop in profitability was mainly due to a sharp drop in fees and commissions (down 20.0%) and muted investment income. KCBK’s loans and deposits expanded by 10.9% and 8.8% YTD, respectively. Thus the LDR rested at 106% vs. 104% at the end of 2013. (QNBFS Research, QE)  GISS posted a net income of QR188.6mn, growing by 38.9% YoY – The growth was primarily driven by share of income from JVs (+81.5% YoY) and other income (QR20.8mn vs. QR7.8mn in 1Q2013). Growth in revenue (+11.6% YoY) was dampened by growth in COGS (+14.3% YoY). GDI posted a revenue QR261.6mn, an increase of 51.1% YoY. Net profit from the Drilling segment grew by 82.4% YoY reaching QR33.6mn. Profitability was driven primarily by the commencement of Al-Jassra and Leshat operations, and higher daily rates received for the three extended offshore rig contracts. Revenue from the aviation segment increased by a moderate QR3.8mn, or 2.5% YoY reaching QR153.0mn. Aviation segment earnings increased in line with the muted revenue growth, as the subsidiary registered a modest QR2.2mn net profit improvement reaching QR56.2mn. The insurance subsidiary registered gross insurance revenue of QR191.6mn, implying growth of 18.4% YoY. The main contributor to this growth was the medical line of business, as additional 7,500 members joined the Al Koot Global Care Medical Insurance Scheme. Profit from the Insurance segment reached QR32.0mn, an increase of 10.7% YoY, as an increase in major insurance claims were largely offset by the release of deferred revenue and strong gains on the company’s investment portfolio. (GISS Press Release, QNBFS Research)  QEWS posts net profit of QR299mn in 1Q2013; earnings exceed our estimate marginally – Qatar Electricity and Water Company (QEWS) posted a net profit of QR299mn in comparison to QR201mn for 1Q2013. Reported net profit beat our estimate of QR287mn by around 4% and handily exceeded Bloomberg consensus of QR262.5mn (there was only one other estimate of QR238mn). The Earnings per Share (EPS) amounted to QR2.72 in 1Q2014 Vs. QR1.83 in 1Q2013. We continue to retain our bullish stance on the company but change our rating to Market Perform given the stock’s price appreciation. Our price target remains QR200.21. (QNBFS Research, QE)  QGTS expands LNG fleet with 3 new joint venture vessels; deal falls in line with our thesis – Qatar Gas Transport Company (QGTS) has added three new LNG vessels to its fleet through Maran Nakilat Co. Ltd., its joint venture with Greek shipping company Maran Ventures Inc. These vessels, which would be used in international trade, will take Maran Nakilat's total fleet from 8 vessels to 11. Due to this, QGTS’ LNG fleet will increase from 58 vessels to 61. Maran Nakilat closed $807.4mn worth of refinancing provided by Qatar Islamic Bank and Barwa Bank in order to complete this deal. This deal is in line with our view on Nakilat. We have previously stated, “We note Nakilat retains the ability to further expand its fleet targeting international customers without expending substantial capex (much like the Maran Nakilat deal, which allows QGTS to double JV fleet size to 8 LNG tankers, while upping its stake to 40% through a $1.33bn refinancing). We view this recent deal positively and it falls in line with our thesis. (QNBFS Research, QGTS Press Release)  Ezdan Holding buys 20.16% of Widam shares – Ezdan Holding Group announced the acquisition of 20.16% shares of Widam Food Co (previously Mawashi), in a step to promote the group’s investments and diversification strategy. Sheikh Abdullah bin Thani bin Abdullah Al Thani, Deputy Chairman of the Board of Directors, said that the group’s strategy in the coming years will be to gradually dissociate from the real estate sector and allocate the group’s returns in other sectors through the purchase of shares of companies listed on Qatar Exchange. (Peninsula Qatar)
  3. 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) 60.5% 19.8% 18.4% 13.3% 12.5% 0.0% 31.0% 62.0% Ezdan Real Estate Dlala Holding Mannai Corp. Al Khaleej Takaful Insurance Qatar Islamic Insurance -6.0% -4.2% -4.2% -4.1% -2.7% -8.0% -4.0% 0.0% Zad Holding Qatar General Insurance & Reinsurance Widam Food Co. Gulf Warehousing Gulf International Services 675.3 577.1 533.6 501.3 342.3 0.0 400.0 800.0 Barwa Real Estate Vodafone Qatar Masraf Al Rayan United Development Mazaya Qatar 32.6 20.5 17.5 17.3 15.9 0.0 20.0 40.0 Vodafone Qatar United Development Barwa Real Estate Qatar Gas Transport (Nakilat) Mazaya Qatar 0% 20% 40% 60% 80% 100% Buy Sell 52.06% 54.56% 19.04% 21.82% 17.95% 17.40% 10.95% 6.22% Qatari Individuals Qatari Institutions Non-Qatari Individuals Non-Qatari Institutions 5,220 2,122 5,608 1,734 (388) 388 (1,000) - 1,000 2,000 3,000 4,000 5,000 6,000 Qatari Non-Qatari Net Investment Total Sold Total Bought
  4. 4. Page 4 of 5 TECHNICAL ANALYSIS OF THE QE INDEX Source: Bloomberg The QE Index extended its phenomenal run for the sixth straight week, recording a new all-time high of 12,961.56 surpassing its previous September 2005 all-time high of 12,892.76. The strong gains on Monday and Tuesday were largely responsible for the index rallying more than 400 points. The index witnessed gains on every single trading session apart from Thursday, which witnessed profit-booking. The index is experiencing a bull market rally, making higher tops & higher bottoms and is currently trading in unchartered territory with no resistance level. We believe the index has strong momentum going in and may continue to extend its rally tagging new highs. On the downside, the index has support near 12,900.0, below which 12,770.0 may provide a good buying opportunity. Meanwhile, both momentum indicators support the index for a further higher move by remaining in the bullish zone with no immediate trend reversal signs. Thus, traders may adopt a buy-on-dip strategy and continue to remain bullish. 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. 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 24) % Change 5-Day % Change YTD Market Cap. QR Million TTM P/E P/B Div. Yield Qatar National Bank 197.50 2.86 14.83 138,197 14.1 2.7 3.5 Qatar Islamic Bank 88.50 5.48 28.26 20,912 15.2 1.9 4.5 Commercial Bank of Qatar 70.30 2.33 19.15 20,875 13.0 1.3 2.4 Doha Bank 67.60 7.30 16.15 17,466 12.3 1.5 6.7 Al Ahli Bank 53.00 1.53 25.27 8,755 16.2 2.3 N/A Qatar International Islamic Bank 85.80 1.54 39.06 12,987 16.9 2.4 4.4 Masraf Al Rayan 48.65 3.07 55.43 36,488 21.0 3.7 3.1 Al Khaliji Bank 23.20 0.04 16.06 8,352 15.8 1.5 4.3 National Leasing 32.70 1.24 8.46 1,618 18.6 1.2 4.6 Dlala Holding 35.35 19.83 59.95 785 N/M 3.5 a Qatar & Oman Investment 15.15 9.15 21.01 477 24.1 1.5 4.0 Islamic Holding Group 70.50 4.14 53.26 282 28.5 4.8 2.4 Banking and Financial Services 267,193 Zad Holding 76.50 (6.02) 10.07 1,001 10.1 0.7 4.6 Qatar German Co. for Medical Devices 15.40 11.19 11.19 178 N/M 1.0 N/A Salam International Investment 14.70 5.23 12.99 1,680 14.8 1.0 6.8 Medicare Group 85.00 4.29 61.90 2,392 24.1 3.0 2.1 Qatar Cinema & Film Distribution 42.50 4.68 5.99 243 21.3 1.7 4.7 Qatar Fuel 253.90 (1.24) 16.18 21,444 17.6 3.4 3.0 Qatar Meat and Livestock 62.00 (4.17) 19.92 1,116 20.9 4.5 3.4 Al Meera Consumer Goods 188.90 3.79 41.71 3,778 17.2 3.0 4.2 Consumer Goods and Services 31,832 Qatar Industrial Manufacturing 48.55 3.96 15.14 2,307 11.4 1.6 5.1 Qatar National Cement 144.00 0.00 21.01 7,070 15.8 2.7 4.2 Industries Qatar 185.00 2.78 9.53 111,925 14.0 3.3 5.9 Qatari Investors Group 67.10 8.58 53.55 8,342 36.9 4.0 1.1 Qatar Electricity and Water 186.00 1.09 12.48 20,460 13.8 3.6 3.7 Mannai Corp. 121.90 18.35 35.60 5,561 11.0 2.5 4.5 Aamal 20.02 5.37 33.47 12,012 23.8 1.7 N/A Gulf International Services 90.00 (2.70) 84.43 16,726 23.0 5.6 1.8 Mesaieed Petrochemical Holding 35.75 (0.69) N/A 44,913 N/A 3.3 1.0 Industrials 229,317 Qatar Insurance 78.00 4.00 46.62 12,522 15.6 2.4 2.6 Doha Insurance 26.20 9.17 4.80 674 9.8 1.2 7.6 Qatar General Insurance & Reinsurance 45.50 (4.21) 13.99 3,147 1.5 0.7 2.7 Al Khaleej Takaful Insurance 40.00 13.31 42.47 888 13.4 1.4 1.6 Qatar Islamic Insurance 78.60 12.45 35.75 1,179 18.5 4.3 4.8 Insurance 18,411 United Development 24.40 7.96 13.31 8,640 26.8 0.8 3.9 Barw a Real Estate 38.80 4.86 30.20 15,098 12.8 1.1 5.2 Ezdan Real Estate 50.30 60.45 195.88 133,421 N/M 4.7 0.6 Mazaya Qatar Real Estate Development 21.50 4.62 92.31 2,150 16.1 1.8 2.8 Real Estate 159,308 Qatar Telecom 148.00 (0.67) 7.87 47,407 18.4 1.9 2.7 Vodafone Qatar 17.96 10.32 67.69 15,183 N/M 2.5 N/A Telecoms 62,591 Qatar Navigation (Milaha) 101.00 4.12 21.69 11,567 12.1 0.9 5.0 Gulf Warehousing 55.60 (4.14) 33.98 2,644 24.0 3.5 2.7 Qatar Gas Transport (Nakilat) 23.85 7.92 17.78 13,356 18.1 3.0 4.6 Transportation 27,567 Qatar Exchange 796,220

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