Weekly market report

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Weekly market report

  1. 1. Market Review and Outlook QE Index and Volume The Qatar Exchange (QE) Index gained 232.28 points, or 2.09%, during the trading week, to close at 11,338.41 points. Market capitalization increased by 2.07% to reach QR598.5 billion (bn) as compared to QR586.3bn at the end of the previous week. Of the 42 listed companies, 21 companies ended the week higher while 17 fell and 4 remained unchanged. Doha Insurance Company (DOHI) was the best performing stock with a gain of 11.13% on 0.5 million (mn) shares traded. The stock gained on announcement of 2013 results and the company‟s proposal of QR2.00 per share in cash dividends (versus QR1.00 in cash and 10% bonus shares in 2012). On the other hand, Qatar Cinema & Film Distribution Company (QCFS) was the worst performing stock with a decline of 6.09% on only 670 shares traded. 11,400 14,000,000 11,338.41 11,179.61 11,150 11,072.13 10,900 0 19-Jan 20-Jan 21-Jan 598,492.4 586,346.0 2.1 48.4 64.1 (24.4) 25,492 29,428 (13.4) 42 42 0.0 21:17 28:13 – Ooredoo (ORDS) was the biggest contributor to the QE Index’s gain. The stock contributed 90.60 points to the index‟s weekly gain. ORDS is up 15.09% year-to-date (YTD). QNB Group (QNBK) was the second biggest contributor adding 69.13 points to the index; QNBK is up 9.3% YTD. On the other hand, Commercial Bank of Qatar (CBQK) shaved 6.75 points off the index during the week. Market Indices Close Total Return 16,199.99 All Share Index 2,799.36 Banks/Financial Svcs. 2,684.39 Industrials 3,729.12 Transportation 1,962.99 Real Estate 2,066.97 Insurance 2,530.81 Telecoms 1,657.82 Consumer 6,066.34 Al Rayan Islamic Index 3,247.38 Market Indices Weekly Index Performance Regional Indices Qatar (QE)* Dubai Abu Dhabi Saudi Arabia Kuwait Oman Bahrain Close 11,338.41 3,819.02 4,655.32 8,771.99 7,778.56 7,200.52 1,276.98 WTD% MTD% YTD% 2.1 5.8 3.0 0.1 1.5 0.8 0.7 9.2 13.3 8.5 2.8 3.0 5.4 2.3 9.2 13.3 8.5 2.8 3.0 5.4 2.3 QE Index Week ended Jan 16, 2014 3,079.2 Exch. Market Cap. (QR mn) Volume (mn) Number of Transactions Companies Traded Market Breadth WTD% 2.1 1.9 2.2 0.8 0.1 0.9 1.6 8.5 (0.3) 0.6 Chg. % (25.0) MTD% 9.2 8.2 9.8 6.5 5.6 5.8 8.3 14.0 2.0 7.0 YTD% 9.2 8.2 9.8 6.5 5.6 5.8 8.3 14.0 2.0 7.0 3.0% 3.5% 2.1% 1.5% 0.8% 0.7% Bahrain 5.8% Oman 7.0% 23-Jan Week ended Jan 23, 2014 2,309.0 Market Indicators Value Traded (QR mn) 0.1% Weekly Exchange Traded Value ($ mn) 675.59 3,187.84 1,822.37 8,334.71 833.89 199.96 15.20 Exchange Mkt. Cap. ($ mn) 164,405.9 77,095.77 131,268.5 481,067.1# 109,526.6 25,645.1 50,178.8 Saudi Arabia Kuwait Abu Dhabi Qatar 0.0% Dubai Foreign institutions remained bullish for the week with net buying of QR400.4mn (including t-bonds) vs. net buying of QR820.3mn (including t-bonds) in the prior week. Qatari institutions remained bearish with net selling of QR42.9mn vs. net selling of QR83.4mn the week before. Foreign retail investors remained bearish for the week with net selling of QR21.5mn vs. net selling of QR108.7mn in the prior week. Qatari retailer investors remained bearish with net selling of QR336.0mn vs. QR628.2mn the week before. Thus far in 2014, the Qatar Exchange has witnessed net foreign portfolio investment inflow of ~$490.4mn vs. ~$1,057mn for the full year of 2013. 22-Jan Volume During the week, Doha Bank (DHBK) and Qatar Islamic Bank (QIBK) reported 2013 results. Despite a weak set of fourth quarter operating metrics, DHBK stock benefited from the positive surprise on the dividend front; the bank paid QR4.50 in cash dividends per share (89% payout ratio) versus QR3.60 (adjusted for its 25% rights issue; 71% payout) in 2012. QIBK‟s results generally met expectations with the bank proposing QR4.00 in cash dividends per share. Trading value during the week decreased by 25.01% to reach QR2.3bn vs. QR3.1bn in the prior week. The Banks & Financial Services sector led the trading value during the week, accounting for 40.1% of the total equity trading value. Trading volume also decreased by 24.44% to reach 48.4mn shares vs. 64.1mn shares in the prior week. The number of transaction fell by 13.4% to reach 25,492 transactions versus 29,428 transactions in the prior week. The Real Estate sector led the trading volume, accounting for 29.3% of the total. 7,000,000 11,147.39 11,093.01 TTM P/E** P/B** Dividend Yield 14.3 22.5 13.0 17.3 17.2 11.4 8.3 2.0 1.5 1.6 2.2 1.2 1.7 0.9 4.0 2.3 3.9 3.4 3.6 3.6 3.8 # Source: Bloomberg, country exchanges and Zawya (** Trailing Twelve Months; * Value traded ($ mn) do not include special trades, if any) ( Data as of January 22, 2014) Page 1 of 5
  2. 2. News Economic News  Qatar PPI falls 0.3% in October 2013 on lower crude, LNG prices – According to data released by the Ministry of Development Planning & Statistics (MDPS), lower prices for crude, natural gas, basic metals and refined petroleum goods resulted in Qatar‟s producer price index (PPI) to fall 0.3% in October from the previous month. The PPI for mining, which carries the maximum weight of 77% in the basket, was down 0.4% in October, mainly due to a 0.4% fall in the price of crude petroleum and gas. However, the manufacturing sector, with a weight of 21% in the PPI basket, reported 0.3% gain in October over September 2013 due to a 2.5% rise in the price of basic chemicals. However, basic metals prices were lower by 1%; refined petroleum products, beverages, dairy products and grain mill products by 0.3% each, and glass and glass products by 0.1%. The electricity and water group, which has a 2% weight in the PPI basket, saw its index fall 0.4% in October against September 2013. Electricity prices decreased 1.6%, while water prices rose 1.7%. (Gulf-Times.com)  Qatar plans to complete New Doha Port soon – Qatar is planning to advance the completion of its mammoth QR27bn New Doha Port coming up near Mesaieed by 2020 rather than the original deadline of 2030, as the country prepares to host the FIFA World Cup in 2022. HE the Transport Minister Jassim Seif Ahmed al-Sulaiti stated that attempt is being made to merge the first and second phases of the project with an aim to complete the third phase of a total container capacity of 6mn twenty-foot equivalent units (TEUs) containers by 2020 itself. As per the original plan, the first phase was slated to become operational by 1Q2016 with a capacity of 2mn TEUs, 2mn TEUs expected to be operational by 2022 and another 2mn TEUs by 2030. (Gulf-Times.com) Market & Corporate News  MPHC raises QR3.2bn in Qatar’s first IPO since 2010 – Qatar Petroleum‟s (QP) unit Mesaieed Petrochemical Holding Company (MPHC) has raised QR3.2bn in the first IPO in Qatar since 2010. All the 323.19mn shares offered, representing 25.7%, have been successfully sold. QP said the stock would start trading on the market next month. (Reuters)  DHBK reports net profit of QR236.0mn vs. QR327.2mn (BBG consensus estimate) in 4Q2013 – Doha Bank (DHBK) reported a net profit of QR236.0mn in 4Q2013, dropping by 28.2% QoQ. Earnings per share for 2013 stood at QR5.29. Total assets rose to QR67bn in 2013, representing a 21.3% YoY growth. Loans & advances rose by 21.8% from QR33.8bn in 2012 to QR41.1bn in 2013, while customer deposits expanded 23.6% to QR42.5bn in 2013. Meanwhile, the bank has declared a 45% (QR4.5/share) cash dividend (dividend yield of 6.9%), which will have to be approved by the Qatar Central Bank and its shareholders. DHBK‟s Chairman Sheikh Fahad bin Mohamad bin Jabor al-Thani said the bank is aiming for 15-20% asset growth over the next four to five years. (QNBFS Research, Gulf-Times.com, Qatar Tribune)  QIBK 4Q2013 net profit broadly in line with our expectations – QIBK posted a net profit (to equity) of QR360.3mn in 4Q2013 vs. our estimate of QR365.3mn (BBG consensus, ex-QNBFS: QR340mn). Net income increased by 4.4% QoQ. Profitability was driven by net financing income (+6.4% QoQ). However, income from investing activities (QR180.6mn) declined by 20.3% QoQ. Cash dividend increased to QR4/share. QIBK upped its DPS to QR4.00 from QR3.75 in 2012. For 2014, we expect a DPS of QR4.25. 2013 analysis: QIBK‟s loan book expanded by 9.3% YoY to QR47.1bn in 2013. Equity of unrestricted investment account holders (URIA) also increased by 11.2% YoY to QR37.9bn. Furthermore, customers deposits in current accounts increased by 37.3% YoY to QR12.5bn. Hence, the loan-to-deposit ratio declined to 93.6% vs. 100.0% at the end of 2012. In terms of the investment book, total investments increased by 11.2% YoY. Growth was driven by fixed income securities while equity investments declined YoY. (QNBFS Research, QE)  GWCS’ 4Q2013 bottom-line up by 18.2% QoQ – Gulf Warehousing reported a net profit of QR26.83mn vs. QR22.71mn in 3Q2013. The firm booked other income of QR1mn in 4Q2013 vs. QR0.08mn in 2012, which was the primary difference vs. our bottom-line estimate of QR25.3mn. For the full year (2013), profit to equity holders stood at QR101.6mn vs. QR84.9mn in 2012, up 19.7% YoY. The company announced a cash DPS of QR1.50 vs. a 20% stock dividend in 2012. For FY2013, overall revenue increased to QR527.3mn in 2013 vs. QR479.7mn in 2012, a growth of 9.9% YoY. In our view, the growth primarily came from LVQ Phase 3 coming online in 2013. Direct costs increased 4.0% YoY. Furthermore, G&A expenses increased by 3.7% YoY. On the Imdad front, GWCS booked a provision of QR6.3mn (51% share leads to a hit of QR3.2mn). (QNBFS Research, QE)  IQCD announces shutdown schedule of its production facilities in 1Q2014 – Industries Qatar (IQCD) has confirmed its planned shutdown timetable for 1Q2014 for all its Qatarbased production facilities. The planned shutdown schedule, with prior year comparatives, is as follows: Ethylene: 35 days (1Q2013: 0 days); LDPE: 34 days (1Q2013: 11 days); LLDPE: 11days (1Q2013: 0 days); Methanol: 10 days (1Q2013: 0 days); MTBE: 8 days (1Q2013: 0 days); Ammonia: 40 days (1Q2013: 1 day); Urea: 40 days (1Q2013: 7 days); and Steel ( DR, EF/CC & RM): 22 days (1Q2013: 40 days). This shut-down schedule is indicative of current plans only, and actual down-time may vary from the latest plan. The announced shutdowns are somewhat different from previously detailed maintenance-related shutdowns stated in IQCD‟s 5-year business plan. We do not expect material changes to our estimates as a result of these announced shutdowns. (QNBFS Research, QE)  BRES selling its Barwa Bank stake for QR2.4bn – Barwa Real Estate Group (BRES) is selling its 37.34% stake in Barwa Bank for QR2.4bn. This deal is part of an existing agreement between Qatari Diar and BRES, according to which Barwa sells some of its assets to Qatari Diar and uses the profit of those transactions to pay off some credit facilities. The deal is expected to reflect on the company‟s financial results in 4Q2013. BRES has sold all its shares in Barwa Bank after using its rights to buy back 40.746.660 million shares, about 14% of the bank‟s shares in December 2013. The group is currently obtaining the necessary regulatory approvals to complete the transaction. (QE)  DOHI reports net profit of QR28mn in 4Q2013 – Doha Insurance Company (DOHI) reported a net profit of QR28mn in 4Q2013, reflecting an increase of 854.8% QoQ. Net profit for 2013 amounted to QR67mn, rising 11.2% YoY. Net premiums rose by 14.6% QoQ to QR21.9mn in 4Q2013, while it was up marginally YoY to QR106.3mn in 2013. EPS amounted to QR2.60 in 2013 as compared to QR2.34 in 2012. Meanwhile, DOHI‟s board of directors has proposed dividend distribution of 20% from the share par value i.e. QR2.00 for each share to its shareholders. (QE) Page 2 of 5
  3. 3. Qatar Exchange Top 5 Gainers Top 5 Decliners 0.0% 12.0% 11.1% 9.7% -1.9% -2.1% -2.6% -3.0% 8.0% -3.2% 4.4% 4.0% 3.5% 3.4% Al Ahli Bank -6.0% Gulf International Services 0.0% -6.1% -9.0% Doha Insurance Ooredoo QNB Group Source: Qatar Exchange (QE) Qatar Cinema Qatar German Mazaya Qatar Qatar General Qatar Islamic & Film Co. for Insurance & Insurance Distribution Medical Reinsurance Devices Source: Qatar Exchange (QE) Most Active Shares by Value (QR Million) Most Active Shares by Volume (Million) 600.0 9.0 6.5 400.0 6.3 6.0 340.4 4.6 221.5 3.5 209.0 200.0 3.0 3.0 166.8 117.5 0.0 0.0 QNB Group Industries Qatar Barwa Real Estate Qatari Investors Group Source: Qatar Exchange (QE) Vodafone Qatar Mazaya Qatar United Development Net Traded Value by Nationality (QR Million) 379 18.08% 100% Qatari Investors Group Source: Qatar Exchange (QE) Investor Trading Percentage to Total Value Traded 35.42% Non-Qatari 714 12.84% 80% 60% Barwa Real Estate Qatar Islamic Bank 1,093 11.91% 20.51% 18.65% 40% 48.57% 20% (379) 34.02% Qatari 1,595 1,216 0% Buy Sell Qatari Individuals Qatari Institutions Non-Qatari Individuals Non-Qatari Institutions Source: Qatar Exchange (QE) (500) Net Investment 500 1,000 Total Sold 1,500 2,000 Total Bought Source: Qatar Exchange (QE) Page 3 of 5
  4. 4. TECHNICAL ANALYSIS OF THE QE INDEX Source: Bloomberg The QE Index extended its remarkable rally for the third consecutive session, tagging a new 52-week high. The index after consolidating on Sunday & Monday gained momentum on Tuesday and continued its uptrend registering strong gains on Thursday. Bulls once again dominated the bears as rising buying demand pushed the index to its weekly high, clearing the 11,200.0 and 11,300.0 psychological levels for the first time since 2008. We believe the index is currently in bull run mode and may continue to advance higher targeting the 11,400.0-11,500.0 levels. Moreover, the bullishness in the RSI is intact, while the MACD is diverging away from the signal line on the upside suggesting this rally may continue for a longer period of time. On the flip side, traders may need to keep a close watch on the ascending trendline support near the 11,170.0 levels for any reversal signs. Any pullback toward these levels may provide buying opportunities for traders. However, a dip below these levels may drag the index toward 11,100.0. Thus, we expect a bullish week ahead. Investors may continue to remain positive, but must closely follow the support levels 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. 5. Price (Jan 23) Com pany Nam e % Change 5-Day % Change YTD Mark e t Cap. QR Million TTM P/E P/B Div. Yie ld 188.00 4.44 9.30 131,549 13.9 2.5 3.2 Qatar Islamic Bank 75.60 2.44 9.57 17,864 13.4 1.5 5.0 Commercial Bank of Qatar 74.20 (1.07) 4.80 18,361 10.5 1.3 8.1 Doha Bank 65.20 1.72 12.03 16,846 9.9 1.5 6.4 Al Ahli Bank 65.60 3.47 19.27 8,336 15.9 2.3 4.6 Qatar International Islamic Bank 70.80 0.00 14.75 10,717 15.0 2.1 4.9 Masraf Al Rayan 35.05 (0.28) 11.98 26,288 15.7 2.6 2.9 Al Khaliji Bank 21.15 0.71 5.80 7,614 14.3 1.4 4.7 National Leasing 30.40 (0.33) 0.83 1,504 17.3 1.2 6.6 Dlala Holding 22.86 (0.04) 3.44 507 N/M 2.3 N/A Qatar & Oman Investment 12.80 (0.54) 2.24 403 26.8 1.2 3.9 Islamic Holding Group 46.30 (1.49) 0.65 185 20.5 3.1 2.4 Qatar National Bank 240,174 Bank ing and Financial Se rvice s Zad Holding 70.10 0.57 0.86 917 9.3 0.7 5.7 Qatar German Co. f or Medical Devices 14.05 (3.17) 1.44 162 N/M 0.9 N/A Salam International Investment 13.15 (0.75) 1.08 1,503 11.6 0.9 5.3 Medicare Group 53.10 0.00 1.14 1,494 24.3 1.9 3.4 Qatar Cinema & Film Distribution 40.10 (6.09) 0.00 229 30.6 1.7 5.0 287.90 (0.69) 1.34 18,705 15.6 3.1 3.5 53.30 2.30 3.09 959 15.9 3.9 7.5 144.50 1.76 8.40 2,890 19.8 2.3 5.5 Qatar Fuel Qatar Meat and Livestock Al Meera Consumer Goods 26,860 Cons um e r Goods and Se rvice s 0.57 4.94 2,103 10.0 1.6 5.6 Qatar National Cement 119.00 53.10 (0.34) 0.00 5,843 13.7 2.4 5.0 Industries Qatar 181.40 0.89 7.40 109,747 13.5 3.4 4.3 48.45 1.68 10.87 6,024 25.8 2.9 1.5 183.00 0.00 0.60 18,300 12.1 3.2 4.0 Mannai Corp. 91.00 0.00 1.22 4,151 9.0 1.8 5.2 Aamal 14.72 (1.74) (1.87) 8,832 14.0 1.3 N/A Gulf International Services 73.80 3.36 10,972 18.1 3.8 2.0 Qatar Industrial Manuf acturing Qatari Investors Group Qatar Electricity and Water 20.98 165,972 Indus trials Qatar Insurance 74.50 2.34 12.03 9,568 11.7 1.8 2.7 Doha Insurance 29.95 11.13 19.80 771 11.5 1.5 3.0 Qatar General Insurance & Reinsurance 44.50 (2.09) (7.10) 2,565 3.0 0.8 2.0 Al Khaleej Takaf ul Insurance 39.50 0.51 8.22 674 14.1 1.1 2.1 Qatar Islamic Insurance 63.30 (1.86) 9.33 950 14.9 3.4 5.5 14,528 Ins urance United Development 23.24 0.04 2.79 7,837 9.6 0.7 4.3 Barw a Real Estate 32.05 1.75 7.55 12,471 18.3 1.0 4.7 Ezdan Real Estate 16.95 (0.99) (0.29) 44,960 N/M 1.6 0.8 Mazaya Qatar Real Estate Development 12.16 (2.56) 8.77 1,216 18.4 1.1 4.9 66,484 Re al Es tate 157.90 9.65 15.09 50,579 19.2 2.1 3.2 11.55 1.76 7.84 9,764 N/M 1.6 N/A Qatar Navigation (Milaha) 90.80 0.33 9.40 10,399 10.7 0.9 4.1 Gulf Warehousing 41.00 (1.32) (1.20) 1,950 19.2 2.4 N/A Qatar Gas Transport (Nakilat) Trans portation 21.04 0.19 3.90 11,782 15.4 3.3 4.8 Qatar Telecom Vodaf one Qatar 60,343 Te le com s 24,131 Qatar Exchange 598,492 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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