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Weekly Market Report

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  • 1. 12,000,000 9,915.21 9,850 6,000,000 Close Qatar (QE)* Dubai Abu Dhabi Saudi Arabia Kuwait Oman Bahrain 9,976.21 2,898.43 3,851.81 8,262.79 7,939.51 6,754.27 1,206.19 9,841.30 9,796.66 9,700 0 3-Nov 4-Nov 5-Nov 6-Nov Volume QE Index Week ended Oct 31, 2013 1,452.1 537,220.8 533,105.7 38.0 34.9 8.9 27,159 15,267 77.9 42 41 2.4 25:16 Value Traded (QR mn) 29:11 – Exch. Market Cap. (QR mn) Volume (mn) Number of Transactions Companies Traded Market Breadth Market Indices Close Total Return 14,253.71 All Share Index 2,492.69 Banks/Financial Svcs. 2,360.15 Industrials 3,276.33 Transportation 1,871.95 Real Estate 1,848.22 Insurance 2,333.55 Telecoms 1,426.19 Consumer 5,901.98 Al Rayan Islamic Index 2,846.85 Market Indices Weekly Index Performance WTD% 1.4 1.1 1.0 1.7 2.3 1.4 0.1 (0.9) 0.2 1.2 Chg. % 29.7 0.8 MTD% 1.4 1.1 1.0 1.7 2.3 1.4 0.1 (0.9) 0.2 1.2 YTD% 26.0 23.7 21.1 24.7 39.7 14.7 18.8 33.9 26.4 14.4 2.7% 1.4% 1.5% 1.2% 0.4% 0.2% (1.0%) Dubai Abu Dhabi Bahrain (3.5%) (0.1%) (0.8%) Kuwait 4.0% 7-Nov Week ended Nov 07, 2013 1,883.7 Market Indicators Foreign institutions remained bullish for the week with net buying of QR265.2mn vs. net buying of QR85.4mn in the prior week. Qatari institutions turned bearish with net selling of QR127.5mn vs. net buying of QR46.8mn the week before. Regional Indices 9,976.21 9,952.87 Oman Trading volume increased by 8.86% to reach 38.0mn shares vs. 34.9mn shares in the prior week. The number of transactions rose by 77.89% to reach 27,159 transactions versus 15,267 transactions in the prior week. The Banks and Financial Services sector led the trading volume, accounting for 34.17% of the total. 10,000 Qatar Trading value during the week increased by 29.72% to reach QR1.88bn vs. QR1.45bn in the prior week. The Banks and Financial Services sector led the trading value during the week, accounting for 34.73% of the total equity trading value. QE Index and Volume Saudi Arabia Market Review and Outlook The Qatar Exchange (QE) Index gained 138.72 points, or 1.41%, during the week, to close at 9,976.21 points. Market capitalization increased by 0.77% to reach QR537.2 billion (bn) as compared to QR533.1 at the end of the previous week. Of the 42 listed companies, 25 companies ended the week higher while 16 fell and 1 remained unchanged. Milaha (QNNS) was the best performing stock with a gain of 3.13%; the stock is up 40.89% year-to-date (YTD). Qatar Cinema & Film Distribution Co. (QCFS) was the worst performing stock with a decline of 9.73%; the stock is down 29.88% YTD. The GCC markets were mixed during the week. Saudi Arabia’s benchmark index (SASEIDX) was the top performer, surging by 2.7% week-over-week) WoW. The second best performing market was Qatar, rising by 1.4% MoM followed by Oman, up 1.2% MoM. Other regional indices were mixed with Dubai‟s benchmark index (DFMGI) declining by 0.8% WoW. However, DFMGI is still the best performing index YTD with a gain of 78.6%. QE Index is up 19.3% YTD. After posting a flattish performance in September, the Qatari equity market rebounded in October and the first week of November. We believe the upcoming dividend payouts season (Qatari stocks usually pay annual dividends with full year results; the 2013 results will be announced in early part of 2014) and the relative underperformance versus regional indices are the primary drivers of the market in the last couple of weeks. On the results front, all companies (with the exception of Vodafone Qatar) reported their nine-month results. Despite posting generally weakerthan-expected results, in aggregate, the 41-listed companies reported a 6.67% growth in net profits against 1.88% in the comparable period of 2012. On the banking sector front, deposits have increased by 14.8% YTD while loan book has grown by 9.0% YTD (as of September 2013). The banking sector‟s loan-to-deposit ratio (LDR) stood at 106% at the end of September 2013 vs. 111% at the end of 2012. WTD% MTD% YTD% Weekly Exchange Traded Value ($ mn) Exchange Mkt. Cap. ($ mn) TTM P/E** P/B** Dividend Yield 1.4 (0.8) 0.2 2.7 (0.1) 1.2 0.4 1.4 (0.8) 0.2 2.7 (0.1) 1.2 0.4 19.3 78.6 46.4 21.5 33.8 17.2 13.2 799.32 540.42 471.38 6,423.46 482.46 150.94 3.06 147,574.5 69,701.25 111,017.6 441,697.1# 110,205.1 23,954.2# 16,795.7 12.8 15.7 10.7 16.9 18.5 10.9 8.1 1.7 1.1 1.3 2.1 1.3 1.6 0.8 4.6 3.1 4.7 3.6 3.5 3.8 4.0 # Source: Bloomberg, country exchanges and Zawya (** Trailing Twelve Months; * Value traded ($ mn) do not include special trades, if any) ( Data as of November 06, 2013) Page 1 of 5
  • 2. News Economic News  EIU: Qatar to keep riyal pegged to dollar – According to the Economist Intelligence Unit (EIU), the Qatari riyal will remain pegged to the US dollar and a revaluation is not expected in the next financial year as well. EIU said the currency is well supported by Qatar‟s hydrocarbons revenue and foreign assets. Plans to create a single currency for the Gulf region are unlikely to be realized over the next five years. Qatar‟s real economic growth would remain robust, averaging 4.5% during 2012-30 on a slowing trend. Qatar‟s population will steadily grow to reach 3.4mn by 2030, largely due to immigration. As a result, growth in real GDP per head will be much slower than headline growth. Qatar has also moved to 20th position from 21st in the EIU global ranking on business environment, driven by the rapid development of its infrastructure, increased availability of financing, as well as strong policies on tax and trade. Qatar tops the group of 17 countries in business environment rankings for EIU‟s forecast period of 2013-17. EIU said Qatar has the lowest non-performing loan ratio in the region, at around 2%. Substantial surpluses will enable Qatar to meet its debt-obligations easily, despite having borrowed heavily to finance the development of new gas and petrochemical facilities. (Gulf-Times.com)  Doha Metro progressing on fast track – Qatar Rail‟s CEO Saad Ahmed al-Mohannadi said the three vital projects that Qatar Rail is implementing in coming years will enormously boost public transport across the country and even beyond its borders. He said the Doha Metro, the Long Distance Passengers & Freight Rail, and Lusail Light Rail Transport will give speedy connectivity to the public to access places like Lusail City, Hamad International Airport, Education City and West Bay locations in about six years from now. Meanwhile, the Transport Ministry has begun developing the old Doha port to increase its capacity to around 700,000-800,000 containers a year, with a possibility to increase it to 1mn containers eventually. (Gulf-Times.com)  QCB issues QR4bn T-bills – The Qatar Central Bank (QCB) has issued three treasury bills worth QR4bn on November 5, 2013. Total bids stood at QR7.73bn for all three maturities. Yield on 91-day T-bills stood at 1.28% rising from 0.97% for 93days, while yield for 182-day T-bills fell to 1.30% from 1.36% and for 273-day notes yield declined to 1.40% from 1.57%. (QCB)  QNB Group: Qatar’s foreign reserves up $39.3bn in September – According to a report by the QNB Group, Qatar‟s international reserves have edged higher, totaling $39.3bn in September, indicating 16% rise on 2012 driven by high hydrocarbon prices. According to the QNB report, the import cover stood at 16.7 months, which is well above the IMF recommended level of three months for pegged exchange rates. Qatar‟s international reserves have been steadily rising over the years as foreign exchange receipts from exports grew. The pullback in reserves in 2011 was largely due to capital outflows for purchasing foreign assets and international reserves are forecasted to increase gradually until 2014. Strong fiscal and economic fundamentals have reduced Qatar‟s Credit Default Swap (CDS) spreads to historic lows in October. Four major Asian countries, Japan, South Korea, India and China, remained the top export destinations for Qatar. (GulfTimes.com) Market & Corporate News  S&P Dow Jones indices to upgrade Qatar, UAE to emerging market status – S&P Dow Jones Indices has decided to promote both Qatar and the UAE to emerging market status from frontier market category with effect from September 2014. The company cited Qatar's efforts to raise foreign ownership limits for stocks, though the limits were still below the levels of most emerging markets, as well as reforms to settlement systems and trading facilities. S&P Dow Jones Indices further stated the UAE‟s current foreign ownership limit of 49% is satisfactory and it expects that this limit will be relaxed over the coming years. (GulfBase.com, Reuters)  S&P: Qatar may introduce rules for financial services – According to S&P, Qatar along with Kuwait, may soon introduce new rules for the financial services sector including capital charges for bank lending to projects. Further, S&P noted that the proposed Basel III capital norms could lead to drying up of long-term finance from European lending institutions for Gulf projects, thus paving way for project bonds in the region. (GulfTimes.com)  Centrica signs $7bn LNG deal with Qatar – UK-based Centrica entered into a deal worth $7bn with Qatar to import LNG over four & half years, as the UK‟s domestic production dwindles. Under this contract, Centrica will purchase 3mn tons of LNG per year from Qatar, which is equivalent to approximately 13% of Britain's annual residential gas demand. This deal is an extension of a three-year LNG supply agreement that was signed in 2011, which expires in June 2014. (Reuters)  GDI, Oxy Qatar sign QR865mn rig deal for 5 years – Gulf Drilling International (GDI) has signed a QR865mn five-year contract with Occidental Petroleum of Qatar (Oxy Qatar) to bring a newly acquired rig into service. This will mark the third rig that GDI has under contract for Oxy Qatar, having already successfully deployed the Al Rayyan and Al Wajba jack-up rigs to support Oxy Qatar‟s extensive development program. The cumulative value of the three GDI rigs stands at QR1.3bn. (Gulf-Times.com)  7 new malls to be built for Al Meera – Al Meera Consumer Goods Company has signed a blanket agreement with Al-Aliaa Trading & Contracting Company (Al-Aliaa) and Al-Muftah Trading & Contracting Company (Al-Muftah) to build seven new malls. According to the agreement, Al-Muftah will build three new stores for Al Meera at Rawdat Ekdeem, Al Azizia, and Zakhira, while Al-Aliaa will handle the construction of the other four malls at Al Wajba, Muaither, Al Wakrah, and Al Thumama. (Gulf-Times.com)  Qatari state firms require MoF approval for borrowing – Qatar is requiring state companies to obtain approval from the Ministry of Finance before borrowing from banks as the country seeks to rein in debt. A Finance Ministry official said the central bank had informed lenders last month about the new rule for government bodies and state-owned businesses. However, the new rule excludes state-run Qatar Petroleum and its subsidiaries. (Gulf-Times.com)  QIC expects $1bn premium for Q-Re by 2017 – The Qatar Insurance Company‟s (QIC) President & CEO Khalifa Abdulla al-Subaey said the company will focus on the reinsurance segment and achieve a premium of $1bn for its subsidiary QRe in the five-year plan period until 2017. (Gulf-Times.com) Page 2 of 5
  • 3. Qatar Exchange Top 5 Gainers Top 5 Decliners 0.0% 6.0% -1.7% -4.0% 4.0% -4.2% -4.3% 3.1% 2.7% 2.7% 2.6% 2.4% 2.0% -7.4% -8.0% -9.7% 0.0% Milaha Doha Bank United Commercial Development Bank of Qatar Masraf Al Rayan Source: Qatar Exchange (QE) -12.0% Qatar Cinema Qatar General Al Ahli Bank & Film Insurance & Distribution Reinsurance Mannai Corp. Gulf Warehousing Source: Qatar Exchange (QE) Most Active Shares by Value (QR Million) Most Active Shares by Volume (Million) 420.0 7.8 369.1 6.1 280.0 5.1 5.2 178.6 150.6 145.8 140.0 136.0 2.3 2.6 0.0 2.2 2.2 Industries Qatar Commercial Bank of Qatar Barwa Real Estate 0.0 Industries Qatar QNB Group Masraf Al Rayan Commercial United Bank of Qatar Development Source: Qatar Exchange (QE) United Development Masraf Al Rayan Source: Qatar Exchange (QE) Investor Trading Percentage to Total Value Traded Net Traded Value by Nationality (QR Million) 221 19.69% 100% 33.77% Non-Qatari 553 9.68% 80% 775 7.35% 34.40% 60% 27.63% 40% 20% (221) 31.25% 36.23% Qatari 1,330 1,109 0% Buy Sell Qatari Individuals Qatari Institutions Non-Qatari Individuals Non-Qatari Institutions Source: Qatar Exchange (QE) (400) (200) - 200 Net Investment 400 600 800 Total Sold 1,000 1,200 1,400 1,600 Total Bought Source: Qatar Exchange (QE) Page 3 of 5
  • 4. TECHNICAL ANALYSIS OF THE QE INDEX Source: Bloomberg The QE Index continued its uptrend for the second consecutive week and gained around 139 points to close above the 9,950.0 mark for the first time since August, thus signifying strength. The bulls were in full control last week and pushed the index closer to the 10,000.0 psychological level. The index paused just for a single day on Sunday and registered gains on each day thereafter to surpass the 9,900.0 level on the back of strong buying interest. We believe the index is currently in uptrend mode and may continue to move higher to test and clear the 10,000.0 level, targeting the 10,100.0 mark as it has strong momentum going in. Moreover, the RSI is moving up strongly and has enough room before getting overbought, while the MACD is diverging further away from the signal line in a bullish manner, indicating that this rally may not fizzle out soon. On the downside, the 9,900.0 level may act as a support area for the index. If the index penetrates below this level, it would present a good opportunity for the buyers to step in near the 9,850.0-9800.0 band. Thus, traders could adopt a bullish approach and may continue to buy on every possible dip. 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. Page 4 of 5
  • 5. Price % Change 5(Nov 7) Day Company Name 165.90 Qatar National Bank % Change Monthly (0.06) (0.06) Market Cap. QR Million TTM P/E P/B Div. Yield 116,085 12.6 2.3 3.6 Qatar Islamic Bank 69.00 1.92 1.92 16,304 15.1 1.4 5.4 Commercial Bank of Qatar 68.00 2.56 2.56 16,826 9.6 1.2 8.8 Doha Bank 56.50 2.73 2.73 14,598 9.9 1.6 7.3 Al Ahli Bank 53.10 (4.32) (4.32) 6,748 13.0 2.0 5.5 Qatar International Islamic Bank 58.20 1.57 1.57 8,810 12.3 1.8 6.0 Masraf Al Rayan 30.05 2.39 2.39 22,538 13.5 2.2 3.3 Al Khaliji Bank 19.08 1.33 1.33 6,869 12.9 1.3 5.2 National Leasing 30.10 (1.31) (1.31) 1,489 12.7 1.2 6.6 Dlala Holding 20.22 (1.17) (1.17) 449 N/M 2.1 N/A Qatar & Oman Investment 12.27 (0.65) (0.65) 387 25.7 1.2 4.1 Islamic Holding Group 41.65 (1.19) (1.19) 167 22.4 2.9 2.7 211,269 Banking and Financial Services Zad Holding 68.50 0.59 0.59 896 9.1 0.7 5.8 Qatar German Co. for Medical Devices 15.00 (0.66) (0.66) 173 N/M 0.9 N/A Salam International Investment 12.20 0.00 0.00 1,395 10.8 0.8 5.7 Medicare Group 49.50 0.92 0.92 1,393 22.7 1.8 3.6 Qatar Cinema & Film Distribution 39.90 (9.73) (9.73) 228 30.5 1.7 5.0 0.46 0.46 18,523 15.5 3.1 3.5 47.50 (1.55) (1.55) 855 14.2 3.5 8.4 134.90 (0.44) (0.44) 2,698 18.5 2.1 5.9 285.10 Qatar Fuel Qatar Meat and Livestock Al Meera Consumer Goods 26,160 Consumer Goods and Services 50.90 1.19 1.19 2,016 9.6 1.5 5.9 Qatar National Cement 103.10 0.78 0.78 5,062 11.9 2.1 5.8 Industries Qatar 163.30 2.38 2.38 98,797 12.2 3.1 4.7 31.95 1.43 1.43 3,972 17.0 1.9 2.3 160.30 0.82 0.82 16,030 10.6 2.8 4.6 Qatar Industrial Manufacturing Qatari Investors Group Qatar Electricity and Water Mannai Corp. 85.20 (4.16) (4.16) 3,887 8.5 1.7 5.6 Aamal 14.43 1.26 1.26 8,658 13.7 1.3 N/A Gulf International Services 58.90 0.51 0.51 8,757 14.5 3.0 2.5 147,178 Industrials Qatar Insurance 65.00 2.36 2.36 8,348 10.2 1.7 3.1 Doha Insurance 25.15 0.60 0.60 647 11.5 1.3 3.6 Qatar General Insurance & Reinsurance 50.20 (7.38) (7.38) 2,894 3.3 0.9 1.7 Al Khaleej Takaful Insurance 39.65 2.19 2.19 677 14.1 1.2 2.1 Qatar Islamic Insurance 58.00 1.93 1.93 870 13.7 3.2 6.0 13,436 Insurance United Development 22.60 2.73 2.73 7,621 9.3 0.7 4.4 Barwa Real Estate 27.00 0.75 0.75 10,506 15.4 0.8 5.6 Ezdan Real Estate 17.00 (0.64) (0.64) 45,092 N/M 1.6 0.8 Mazaya Qatar Real Estate Development 11.20 (1.58) (1.58) 1,120 16.9 1.0 5.4 44,012 16.7 1.8 3.6 7,795 N/M 1.3 N/A 10,181 10.4 0.8 4.2 1,879 18.9 2.4 N/A 10,970 14.4 3.1 5.1 64,340 Real Estate 137.40 (1.15) (1.15) 9.22 1.21 1.21 Qatar Navigation (Milaha) 88.90 3.13 3.13 Gulf Warehousing 39.50 (1.74) (1.74) Qatar Gas Transport (Nakilat) Transportation 19.59 2.30 2.30 Qatar Telecom Vodafone Qatar 51,807 Telecoms 23,030 Qatar Exchange 537,221 Source: Bloomberg Contacts Saugata Sarkar Ahmed M. Shehada Keith Whitney Sahbi Kasraoui Head of Research Head of Trading Head of Sales Manager - HNWI Tel: (+974) 4476 6534 Tel: (+974) 4476 6535 Tel: (+974) 4476 6533 Tel: (+974) 4476 6544 saugata.sarkar@qnbfs.com.qa ahmed.shehada@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

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