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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 by 233.76 points, or 1.84%, during the trading week, to close at 12,961.40 points. Market capitalization increased by 0.9% to reach QR731.9 billion (bn) as compared to QR725.7bn at the end of the previous week. Of the 43 listed companies, 30 companies ended the week higher, while 12 fell and 1 remained unchanged. Dlala Brokerage and Investment Holding Company (DBIS) was the best performing stock for the week, with a gain of 17.42% on 3.7 million (mn) shares traded. On the other hand, Ezdan Holding Group (ERES) was the worst performing stock with a decline of 7.55% on 4.8mn shares traded. The two biggest market cap stocks, Industries Qatar (IQCD) and QNB Group (QNBK) were the biggest contributors to the weekly index gain. IQCD contributed 57.14 points to the index’s weekly gain. The stock has been a laggard in 2014 year-to-date (YTD) with a price return of 11.6% versus the QE Index which is up 24.9%. QNB Group (QNBK) was the second biggest contributor adding 48.40 points to the index. QNBK is up 14.4% YTD in 2014. On the other hand, Barwa Real Estate Company (BRES) shaved 10.13 points off the index during the week. The stock has had a decent run in 2014 posting a price return of 25.8%. In the last few quarters, BRES has been selling its assets to Qatari Diar. During the week, BRES announced another transaction; it has entered into a share sale and purchase agreement in relation to the sale of the Barwa City project to Labregah Real Estate Company, a wholly-owned subsidiary of Qatari Diar Real Estate Investment for QR7.57bn. Trading value during the week decreased by 3.58% to reach QR4.92bn vs. QR5.10bn in the prior week. The Industrials sector led the trading value during the week, accounting for 22.22% of the total equity trading value. Vodafone Qatar (VFQS) was the top value traded stock during the week with total traded value of QR578.3mn. Trading volume decreased by 5.29% to reach 127.1mn shares vs. 134.2mn shares in the prior week. The number of transactions decreased by 3.93% to reach 52,631 transactions versus 54,785 transactions in the prior week. The Real Estate sector led the trading volume, accounting for 25.86%. VFQS was also the top volume traded stock during the week with total traded volume of 31.3mn shares. Foreign institutions turned bullish for the week with net buying of QR276.9mn vs. net selling of QR75.0mn in the prior week. Qatari institutions turned bullish with net buying of QR79.7mn vs. net selling of QR129.0mn the week before. Foreign retail investors turned bearish for the week with net selling of QR138.2mn vs. net buying of QR30.1mn in the prior week. Qatari retail investors turned bearish with net selling of QR217.9mn vs. net buying of QR174.4mn the week before. Thus far in 2014, the QE has already witnessed net foreign portfolio investment inflow of ~$1.2bn. Market Indicators Week ended May 08, 2014 Week ended May 01, 2014 Chg. % Value Traded (QR mn) 4,917.9 5,100.3 (3.6) Exch. Market Cap. (QR mn) 731,895.9 725,688.2 0.9 Volume (mn) 127.1 134.2 (5.3) Number of Transactions 52,631 54,785 (3.9) Companies Traded 43 43 0.0 Market Breadth 27:13 6:36 – Market Indices Close WTD% MTD% YTD% Total Return 19,328.25 1.8 2.2 30.3 All Share Index 3,302.65 1.5 1.8 27.6 Banks/Financial Svcs. 3,161.72 2.1 2.3 29.4 Industrials 4,427.51 2.7 3.4 26.5 Transportation 2,364.36 (0.2) 0.6 27.2 Real Estate 2,605.89 (0.7) 0.1 33.4 Insurance 3,247.07 0.5 (1.8) 39.0 Telecoms 1,742.62 2.3 2.1 19.9 Consumer 7,133.14 (3.2) (3.7) 19.9 Al Rayan Islamic Index 4,281.97 2.1 2.1 41.0 Market Indices Weekly Index Performance Regional Indices Close WTD% MTD% YTD% Weekly Exchange Traded Value ($ mn) Exchange Mkt. Cap. ($ mn) TTM P/E** P/B** Dividend Yield Qatar (QE)* 12,961.40 1.8 2.2 24.9 1,377.62 201,051.8 16.2 2.2 3.9 Dubai 5,302.09 4.4 4.8 57.3 3,271.83 97,151.2 21.1 2.0 2.0 Abu Dhabi 5,047.39 (0.3) (0.0) 17.5 1,294.42 137,730.0 15.3 1.9 3.4 Saudi Arabia 9,787.03 1.3 2.1 14.7 14,117.34 530,006.6# 19.5 2.4 2.9 Kuwait 7,406.40 (0.3) (0.0) (1.9) 403.13 115,632.1 16.6 1.2 4.1 Oman 6,825.27 1.2 1.5 (0.1) 97.51 24,671.6 12.2 1.7 3.9 Bahrain 1,471.07 3.1 3.1 17.8 37.05 54,084.3 11.7 1.0 4.7 Source: Bloomberg, country exchanges and Zawya (** Trailing Twelve Months; * Value traded ($ mn) do not include special trades, if any) (#Data as of May 07, 2014) 12,854.26 12,987.95 12,933.83 12,894.93 12,961.40 0 17,500,000 35,000,000 12,750 12,875 13,000 4-May 5-May 6-May 7-May 8-May Volume QE Index 4.4% 3.1% 1.8% 1.3% 1.2% (0.3%) (0.3%) (3.5%) 0.0% 3.5% 7.0% Dubai Bahrain Qatar SaudiArabia Oman AbuDhabi Kuwait
  • 2. Page 2 of 5 News Economic News  IMF: Qatar inflation seen benign at 3-4%, growth rate to stay at 6-7% – The International Monetary Fund (IMF) has projected Qatar’s inflation to stay benign at 3-4% going forward. IMF’s Mission Chief for Qatar, Martin Sommer said however, sequencing and prioritization of investment projects will be important and if signs of overheating emerge, policymakers should hold back capital expenditures. The Qatar Central Bank (QCB) could also deploy liquidity withdrawal operations and further macro-prudential measures in case of excessive credit growth or risk-taking. Sommer said that these measures can be supplemented with efforts to remove bottlenecks. Depending on the source of inflationary pressures, these steps could include increasing housing supply, boosting port capacity, and so forth. Inflation increased somewhat in late 2012 and early 2013, but has since then fallen back below 3% despite very rapid population growth, which Sommer said was positive. Meanwhile, IMF added that Qatar’s gas-to-liquids Barzan plant could help push the country’s growth above 7% by 2015. Public investments are expected to keep growth at 6-7% over the medium term, with the non-hydrocarbon growth remaining around 10%. IMF said Qatar’s GDP growth could stay around 6% in 2014 as the pickup in public investments is offset by a modest decline in hydrocarbon output. The public debt ratio is expected to fall, but the headline budget balance could turn into deficit by 2019, while the current account surplus could drop to 6.5% of GDP. (Gulf-Times.com, Peninsula Qatar)  MoJ: 29% rise in Doha property transactions – According to statistics released by the Ministry of Justice (MoJ), the property market in Doha has grown substantially, with a 29% increase QoQ in the number of transactions between 4Q2013 and 1Q2014, with the aggregate value of sales reflecting a 35% rise. According to the latest Asteco Qatar 1Q2014 report, land sales continue to dominate trade in Doha’s real estate sector, representing around 77% of all property transactions over the last three months, with the total value topping QR7.35bn. Qatar’s capital has also seen strong overall performance in the residential rental market, despite a second wave of apartment launches on The Pearl-Qatar easing the pressure on rental rates slightly following stabilization in 4Q2013. (Bloomberg) Market & Corporate News  QE expects 9 firms to be on MSCI EM list – The international index compiler MSCI will announce the names of Qatari companies that have qualified for its Emerging Market list on May 14, 2014. Qatar Exchange’s (QE) CEO Rashid bin Ali Al Mansoori said the Qatari bourse expects at least nine local companies to be eligible for the list. He noted that the MSCI upgrade will help accelerate the inflow of international investors into the Qatari market and will enhance market liquidity and the value of many companies. Al Mansoori said the importance of joining the global index stems from the fact that MSCI is one of the pioneer companies in Global Equity Index. This new reclassification allows Qatar to be in line with Brazil, Russia, India, China and Turkey in attracting foreign investments. (Peninsula Qatar)  MERS set for QR1.5bn expansion – Al Meera Consumer Goods Company (MERS) is set to invest QR1.5bn for the construction of nine malls, which are expected to be completed within 2014. MERS’ CEO Guy Sauvage said that the new branches would be distributed inside and outside of Doha, where market is growing rapidly. Sauvage said MERS has registered stellar growth year after year, which prompted it to embark on an expansion spree to meet the needs of its market base. (Gulf-Times.com)  BRES enters into share sale and purchase agreement in relation to sale of Barwa City project to QDREIC’s unit for QR7.57bn – Barwa Real Estate Company (BRES) has entered into a share sale and purchase agreement in relation to the sale of the Barwa City project to Labregah Real Estate Company, a wholly-owned subsidiary of Qatari Diar Real Estate Investment (QDREIC) for QR7.57bn. The closure of the transaction is subject to customary conditions, while the purchase price is subject to customary price adjustment. (QE)  Barwa Al Baraha construction enters new phase – Barwa Real Estate Company (BRES) announced that the construction work for package two of the second phase of Barwa Al Baraha project will begin in May 2014. Barwa Al Baraha – which is Barwa’s largest development – is being constructed in two phases over 1.8mn square meters with a capacity of 53,000 workers. Package two of the second phase involves the construction of 32 buildings built at a cost of QR691mn, which will be completed within 17 months. These buildings will also have four dining halls, two playgrounds, two mosques, as well as restaurants and utility shops. The already completed phase one provides the largest truck and vehicle parking space in Qatar, with 4,200 parking spaces for trucks of different sizes. (Gulf-Times.com)  Qatar awards Doha Metro contract to five-partner consortium – Qatar has awarded the underground design & construction contract worth $4.4 billion to build the Gold Line section of the Doha Metro to a five-partner consortium. Under the agreement, Turkish contractors STFA and Yap Merkezi will hold a 40% stake in the project, while the remaining stake will be held by India’s Larsen & Toubro, Greece’s Aktor Group and Qatar’s Al-Jaber Engineering. The project, which connects the eastern and western sides of the city, forms part of the Qatar Integrated Rail project and the Gold Line is by far the largest single construction package of the Doha Metro. (Bloomberg)  All MPHC products become regulated – Mesaieed Petrochemical Holding Company (MPHC) has stated that all its products have now come under the "regulated" category and Qatar Chemical & Petrochemical Marketing & Distribution Company (Muntajat) has been entrusted with the marketing of those products to international markets. MPHC said that as per a ministerial directive, high density polyethylene, medium density polyethylene, normal alpha olefins, 1-Hexene, 1- Octane, 1-Butane, ethylene and pygas have now been designated as regulated products. Earlier, the company’s other products namely caustic soda solution, ethylene dichloride, vinyl chloride monomer and hydrochloric acid were designated as regulated products prior to its incorporation on May 29, 2013. (QE)  Al-Ahli Hospital signs national health insurance provider network agreement for Stage-II – Medicare Group (MCGS) announced that Al-Ahli Hospital has signed the national health insurance provider network agreement for Stage-II of the NHIS, which is formed by the Supreme Council of Health (SCH). The second stage of the NHIS has been implemented from May 1, 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) 17.4% 14.8% 9.0% 5.6% 5.5% 0.0% 7.0% 14.0% 21.0% Dlala Holding Mannai Corp. Vodafone Qatar National Leasing Qatari Investors Group -7.6% -5.0% -3.0% -2.5% -1.9% -9.0% -6.0% -3.0% 0.0% Ezdan Real Estate Qatar Fuel Qatar Islamic Insurance Zad Holding Islamic Holding Group 578.3 392.6 389.2 359.6 325.0 0.0 200.0 400.0 600.0 Vodafone Qatar Qatar Gas Transport (Nakilat) Qatar Fuel United Development Qatari Investors Group 31.3 15.5 13.9 7.9 6.4 0.0 15.0 30.0 45.0 Vodafone Qatar Qatar Gas Transport (Nakilat) United Development Mazaya Qatar Barwa Real Estate 0% 20% 40% 60% 80% 100% Buy Sell 42.50% 46.93% 22.91% 21.29% 15.20% 18.01% 19.39% 13.76% Qatari Individuals Qatari Institutions Non-Qatari Individuals Non-Qatari Institutions 3,217 1,701 3,355 1,562 (138) 139 (500) - 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 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 closed last week on a positive note, rallying around 234 points. The index started the week on a bullish note registering strong gains on Sunday and Monday. These gains helped the index breach its important resistances near 12,770.0 and 12,940.0, tagging a new high of 13,019.55. However, the index trimmed its gains on Tuesday and Wednesday, as traders booked profits at a higher level. On Thursday, the index further gained momentum as the bulls were back in action. We believe the index may extend its rally and advance further, recording new highs until it trades above the 12,940.0 level. However, traders should keep a close watch on 12,940.0 for any reversal signs, as a dip below this level may drag the index back into the congestion zone resulting in range bound movement. The index has its interim support near 12,850.0, followed by a strong support seen near 12,770.0. Meanwhile, the RSI is moving strongly toward the overbought territory, but the MACD is not confirming this upmove, since it is diverging away from the signal line in a bearish manner. Thus, we expect the volatility to continue as both the momentum indicators are providing mixed signals. Traders may remain bullish but are advised to exercise caution and follow strict stop losses, since a possibility of correction is not ruled out. 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 (May 08) % Change 5-Day % Change YTD Market Cap. QR Million TTM P/E P/B Div. Yield Qatar National Bank 196.70 2.72 14.36 137,637 14.1 2.7 3.6 Qatar Islamic Bank 87.70 0.57 27.10 20,723 15.1 1.8 4.6 Commercial Bank of Qatar 68.50 0.00 16.10 20,340 12.5 1.3 2.4 Doha Bank 64.90 (0.15) 11.51 16,768 11.8 1.6 6.9 Al Ahli Bank 53.00 0.00 25.27 8,755 16.2 2.3 N/A Qatar International Islamic Bank 86.90 2.96 40.84 13,154 17.1 2.7 4.3 Masraf Al Rayan 48.90 3.06 56.23 36,675 21.1 3.7 3.1 Al Khaliji Bank 23.08 2.12 15.46 8,309 15.7 1.5 4.3 National Leasing 30.35 5.57 0.66 1,502 17.2 1.2 4.9 Dlala Holding 39.10 17.42 76.92 868 N/M 3.9 N/A Qatar & Oman Investment 14.74 (0.07) 17.73 464 21.3 1.4 4.1 Islamic Holding Group 70.60 (1.94) 53.48 282 28.5 4.8 2.4 Banking and Financial Services 265,478 Zad Holding 77.00 (2.53) 10.79 1,007 11.7 0.8 4.5 Qatar German Co. for Medical Devices 14.57 2.68 5.20 168 N/M 0.9 N/A Salam International Investment 14.30 0.35 9.92 1,635 14.4 1.0 7.0 Medicare Group 88.90 (0.11) 69.33 2,502 25.2 3.3 2.0 Qatar Cinema & Film Distribution 41.50 1.22 3.49 237 20.8 1.7 N/A Qatar Fuel 233.50 (5.04) 6.85 19,721 16.4 3.3 3.3 Qatar Meat and Livestock 59.40 (1.82) 14.89 1,069 20.0 4.3 3.5 Al Meera Consumer Goods 188.10 1.24 41.11 3,762 17.1 3.0 4.3 Consumer Goods and Services 30,102 Qatar Industrial Manufacturing 47.45 1.82 12.53 2,255 10.9 1.6 N/A Qatar National Cement 146.00 2.10 22.69 7,169 16.0 2.8 4.1 Industries Qatar 188.50 3.34 11.60 114,043 16.2 4.0 5.8 Qatari Investors Group 69.60 5.45 59.27 8,653 38.3 4.1 1.1 Qatar Electricity and Water 185.40 1.15 12.12 20,394 13.8 3.6 3.7 Mannai Corp. 121.00 14.80 34.59 5,520 10.9 3.1 4.5 Aamal 16.11 (0.68) 7.40 9,666 18.2 1.4 N/A Gulf International Services 92.00 3.02 88.52 17,097 23.5 5.7 1.7 Mesaieed Petrochemical Holding 35.00 1.16 N/A 43,971 N/A 3.2 1.0 Industrials 228,768 Qatar Insurance 75.50 0.13 41.92 12,121 15.1 2.3 2.6 Doha Insurance 25.00 3.01 0.00 644 9.3 1.2 8.0 Qatar General Insurance & Reinsurance 44.00 2.33 10.23 3,044 1.4 0.6 2.8 Al Khaleej Takaful Insurance 38.00 0.00 35.34 844 12.8 1.4 N/A Qatar Islamic Insurance 72.00 (2.96) 24.35 1,080 17.0 3.9 5.2 Insurance 17,732 United Development 25.85 0.78 20.05 9,153 19.7 0.9 3.7 Barw a Real Estate 37.50 (1.70) 25.84 14,592 9.9 1.0 5.3 Ezdan Real Estate 27.55 (7.55) 62.06 73,076 N/M 2.5 1.1 Mazaya Qatar Real Estate Development 20.30 0.35 81.57 2,030 13.2 1.6 3.7 Real Estate 98,852 Qatar Telecom 147.90 0.61 7.80 47,375 18.2 1.9 2.7 Vodafone Qatar 18.30 8.99 70.87 15,471 N/M 2.6 N/A Telecoms 62,846 Qatar Navigation (Milaha) 96.90 (0.10) 16.75 11,097 11.5 0.9 5.2 Gulf Warehousing 55.50 (1.42) 33.73 2,640 24.0 3.5 2.7 Qatar Gas Transport (Nakilat) 24.60 0.04 21.48 13,776 18.0 3.8 4.5 Transportation 27,513 Qatar Exchange 731,289