21 July Daily market report


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21 July Daily market report

  1. 1. Page 1 of 7 QE Intra-Day Movement Qatar Commentary The QE index declined 0.5% to close at 13,090.0. Losses were led by the Transportation and Telecoms indices, declining 2.2% and 1.8%, respectively. Top losers were Qatar Navigation and Gulf Warehousing Co., falling 4.4% and 3.8%, respectively. Among the top gainers, QNB Group rose 1.7%, while Qatar Islamic Insurance Co. was up 1.6%. GCC Commentary Saudi Arabia: The TASI index rose 0.1% to close at 9,750.0. Gains were led by the Real Estate Dev. and Hotel & Tourism indices, rising 1.4% and 1.2%, respectively. Umm Al-Qura Cem. gained 7.6%, while Solidarity was up 5.8%. Dubai: The DFM index gained 2.5% to close at 4,725.0. The Investment & Financial Services index gained 4.2%, while the Services index rose 3.6%. Mashreq Bank surged 15.0%, while Deyaar Development was up 7.6%. Abu Dhabi: The ADX benchmark index rose 1.5% to close at 4,987.8. Inv. & Financial Services index gained 13.2%, while the Real Estate index was up 4.5%. Waha Capital surged 13.2%, while Emirates Driving Co. gained 10.3%. Kuwait: The KSE index fell 0.2% to close at 7,071.4. The Technology index declined 1.9%, while the Telecom. index was down 0.8%. Commercial Bank of Kuwait fell 5.7%, while Noor Financial Investment was down 5.3%. Oman: The MSM index declined 0.1% to close at 7,182.0. Losses were led by the Industrial and Services indices falling 0.4% and 0.2%, respectively. Al Madina Takaful fell 3.1%, while Al Sharqia Invest. Holding was down 2.2%. Bahrain: The BHB index fell marginally to close at 1,481.1. The Services index declined 0.1%, while the Comm. Banking index was down marginally. Khaleeji Comm. Bank fell 2.0%, while Bahrain Duty Free was down 1.9%. Qatar Exchange Top Gainers Close* 1D% Vol. ‘000 YTD% QNB Group 179.00 1.7 154.8 4.1 Qatar Islamic Insurance Co. 84.70 1.6 64.8 46.3 Qatar Industrial Manufacturing Co. 46.60 1.1 4.2 10.5 Qatar Cinema & Film Distri. Co. 51.50 1.0 1.0 28.4 Qatar Fuel Co. 217.40 0.9 57.3 (0.5) Qatar Exchange Top Vol. Trades Close* 1D% Vol. ‘000 YTD% United Development Co. 27.70 (0.5) 1,939.7 28.7 Salam International Investment Co. 19.23 0.2 1,441.7 47.8 Qatar Insurance Co. 89.00 0.6 902.2 67.3 Barwa Real Estate Co. 43.35 (2.0) 827.4 45.5 Qatar Navigation 94.20 (4.4) 738.2 13.5 Market Indicators 21 Jul 14 20 Jul 14 %Chg. Value Traded (QR mn) 583.5 720.1 (19.0) Exch. Market Cap. (QR mn) 705,139.5 706,275.6 (0.2) Volume (mn) 11.6 18.9 (38.5) Number of Transactions 5,872 7,830 (25.0) Companies Traded 43 42 2.4 Market Breadth 13:26 7:34 – Market Indices Close 1D% WTD% YTD% TTM P/E Total Return 19,523.56 (0.5) (1.5) 31.6 N/A All Share Index 3,304.51 (0.3) (1.3) 27.7 16.0 Banks 3,171.50 0.5 (0.6) 29.8 15.6 Industrials 4,332.89 (0.9) (1.6) 23.8 16.9 Transportation 2,266.03 (2.2) (3.0) 21.9 14.5 Real Estate 2,887.26 (1.4) (0.7) 47.8 14.4 Insurance 3,734.36 0.3 (1.0) 59.8 11.9 Telecoms 1,620.07 (1.8) (4.3) 11.4 22.3 Consumer 7,045.36 0.5 (1.3) 18.4 27.1 Al Rayan Islamic Index 4,402.15 (0.5) (1.6) 45.0 18.8 GCC Top Gainers## Exchange Close# 1D% Vol. ‘000 YTD% Deyaar Development Dubai 1.27 7.6 73085.3 3.4 United Real Estate Co. Kuwait 0.11 6.0 191.5 (1.7) Solidarity Saudi Takaful Saudi Arabia 21.29 5.2 3692.3 (3.4) Dubai Financial Market Dubai 3.44 4.9 27804.2 8.1 Sharjah Islamic Bank Abu Dhabi 1.94 4.9 467.8 5.3 GCC Top Losers## Exchange Close# 1D% Vol. ‘000 YTD% Com. Bank Of Kuwait Kuwait 0.66 (5.7) 9.7 0.2 Qatar Navigation Qatar 94.20 (4.4) 738.2 (3.1) Gulf Warehousing Co. Qatar 50.00 (3.8) 14.9 (5.3) Astra Industrial Group Saudi Arabia 47.91 (3.8) 1264.7 2.5 Dallah Healthcare Saudi Arabia 102.63 (3.5) 427.7 (13.3) Source: Bloomberg ( # in Local Currency) ( ## GCC Top gainers/losers derived from the Bloomberg GCC 200 Index comprising of the top 200 regional equities based on market capitalization and liquidity) Qatar Exchange Top Losers Close* 1D% Vol. ‘000 YTD% Qatar Navigation 94.20 (4.4) 738.2 13.5 Gulf Warehousing Co. 50.00 (3.8) 14.9 20.5 Doha Insurance Co. 26.60 (2.4) 48.7 6.4 Ooredoo 131.60 (2.2) 68.2 (4.1) Barwa Real Estate Co. 43.35 (2.0) 827.4 45.5 Qatar Exchange Top Val. Trades Close* 1D% Val. ‘000 YTD% Qatar Insurance Co. 89.00 0.6 80,393.5 67.3 Qatar Navigation 94.20 (4.4) 69,460.9 13.5 Gulf International Services 113.00 (1.7) 59,137.5 131.6 United Development Co. 27.70 (0.5) 54,404.7 28.7 Barwa Real Estate Co. 43.35 (2.0) 36,276.5 45.5 Source: Bloomberg (* in QR) Regional Indices Close 1D% WTD% MTD% YTD% Exch. Val. Traded ($ mn) Exchange Mkt. Cap. ($ mn) P/E** P/B** Dividend Yield Qatar* 13,089.96 (0.5) (1.5) 13.9 26.1 160.28 193,631.3 16.1 2.2 3.8 Dubai 4,724.95 2.5 (3.6) 19.8 40.2 765.89 91,724.6 25.2 1.8 2.2 Abu Dhabi 4,987.83 1.5 (0.9) 9.6 16.3 84.84 137,952.7 14.8 1.8 3.3 Saudi Arabia 9,750.02 0.1 (0.4) 2.5 14.2 1,440.36 531,121.2 19.1 2.4 2.9 Kuwait 7,071.36 (0.2) (0.4) 1.4 (6.3) 40.32 111,260.1 16.8 1.1 3.9 Oman 7,182.02 (0.1) (0.3) 2.5 5.1 17.11 26,459.3 12.2 1.7 3.9 Bahrain 1,481.11 (0.0) (0.0) 3.7 18.6 0.58 54,321.2 11.6 1.0 4.6 Source: Bloomberg, Qatar Exchange, Tadawul, Muscat Securities Exchange, Dubai Financial Market and Zawya (** TTM; * Value traded ($ mn) do not include special trades, if any) 13,000 13,050 13,100 13,150 13,200 9:30 10:00 10:30 11:00 11:30 12:00 12:30 13:00
  2. 2. Page 2 of 7 Qatar Market Commentary  The QE index declined 0.5% to close at 13,090.0. The Transportation and Telecoms indices led the losses. The index fell on the back of selling pressure from Qatari shareholders despite buying support from non-Qatari shareholders.  Qatar Navigation and Gulf Warehousing Co. were the top losers, falling 4.4% and 3.8%, respectively. Among the top gainers, QNB Group rose 1.7%, while Qatar Islamic Insurance Co. was up 1.6%.  Volume of shares traded on Monday fell by 38.5% to 11.6mn from 18.9mn on Sunday. Further, as compared to the 30-day moving average of 14.6mn, volume for the day was 20.5% lower. United Development Co. and Salam International Investment Co. were the most active stocks, contributing 16.7% and 12.4% to the total volume respectively. Source: Qatar Exchange (* as a % of traded value) Ratings, Earnings and Global Economic Data Ratings Updates Company Agency Market Type* Old Rating New Rating Rating Change Outlook Outlook Change Bank Muscat Fitch Oman LT IDR/ST IDR/VR/SR/SRF A-/F2/bbb/1/A- A-/F2/bbb/1/A- – Stable – HSBC Bank Oman Fitch Oman LT IDR/ST IDR/VR/SR A+/F1/bb+/1 A+/F1/bb+/1 – Stable – Bank Dhofar Fitch Oman LT IDR/ST IDR/VR/SR/SRF BBB+/F2/bb/2/BB B+ BBB+/F2/bb+/2 /BBB+  Stable – National Bank of Oman Fitch Oman LT IDR/ST IDR/VR/SR/SRF BBB+/F2/bb+/2/B BB+ BBB+/F2/bbb- /2/BBB+  Stable – Ahli Bank Fitch Oman LT IDR/ST IDR/VR/SR/SRF/LC LT IDR/LC ST IDR BBB+/F2/bb+/2/B BB+/BBB+/F2 BBB+/F2/bbb- /2/BBB+/BBB+/ F2  Stable – Source: News reports (* LT – Long Term, ST – Short Term, FSR- Financial Strength Rating, FCR – Foreign Credit Rating, LCR – Local Currency Rating, IDR – Issuer Default Rating, SR – Support Rating, LC – Local Currency, VR – Viability Rating, SRF – Support Rating Floor, LC – Local Currency) Earnings Releases Company Market Currency Revenue (mn)2Q2014 % Change YoY Operating Profit (mn) 2Q2014 % Change YoY Net Profit (mn) 2Q2014 % Change YoY Saudi Telecom Co. (STC) Saudi SR 0.00 NA 2961.0 14.3% 2803.0 96.2% Saudi Paper Manufacturing Co. (SPMC) Saudi SR 0.00 NA 21.0 -12.5% 12.1 29.2% Saudi Research & Marketing Group (SRMG) Saudi SR 0.00 NA 23.6 -52.6% 6.2 -79.3% Kingdom Holding Co. Saudi SR 0.00 NA 366.0 11.6% 211.7 16.8% Fawaz Abdulaziz Alhokair & Co. Saudi SR 0.00 NA 215.8 23.2% 191.2 15.7% Saudi Electricity Co. (SEC) Saudi SR 0.00 NA 1148.0 75.0% 3658.0 143.5% Saudi Fisheries Co. (Alasmak) Saudi SR 0.00 NA -13.0 NA -13.8 NA Eastern Province Cement Co. (EPCC) Saudi SR 0.00 NA 81.0 19.1% 82.0 6.5% Middle East Specialized Cables Co. (MESC) Saudi SR 0.00 NA 17.9 132.1% 10.2 50850.0% Salama Cooperative Insurance Co. Saudi SR 94.00 48.1% 0.0 NA 3.4 NA Tihama Advertising & Public Relations Co. Saudi SR 0.00 NA -12.8 NA -14.9 NA Al-Ahlia Insurance Co. Saudi SR 51.33 20.2% 0.0 NA -0.5 NA Mohammad Al Mojil Group Co. (MMG) Saudi SR 0.00 NA -193.2 NA -202.1 NA Etihad Etisalat Co. (Mobily) Saudi SR 0.00 NA 1301.8 -20.6% 1311.9 -18.6% Al-Baha Investment & Development Co. Saudi SR 0.00 NA -1.2 NA -1.2 NA Etihad Atheeb Telecom Co. (Go) Saudi SR 0.00 NA -70.0 NA 60.4 NA Emirates Telecom Corp (Etisalat) Abu Dhabi AED 12,579.00 27.3% 0.0 NA 2507.0 26.9% Ras Al Khaimah Cement Co. (RAK Cement) Abu Dhabi AED 65.02 2.6% 0.0 NA 4.2 618.7% Muscat Gases* Oman OMR 5.24 8.1% 0.0 NA 0.8 -2.2% National Hospitality Institute Oman OMR 0.47 71.0% 0.0 NA 0.0 NA Takaful International Co. Bahrain BHD 2.99 9.6% 0.0 NA 0.1 -46.5% Source: Company data, DFM, ADX, MSM (* IH2014 results) Overall Activity Buy %* Sell %* Net (QR) Qatari 72.44% 75.76% (19,425,225.69) Non-Qatari 27.56% 24.24% 19,425,225.69
  3. 3. Page 3 of 7 Global Economic Data Date Market Source Indicator Period Actual Consensus Previous 07/21 Germany Destatis PPI YoY June -0.70% -0.70% -0.80% 07/21 UK Rightmove Rightmove House Prices MoM July -0.80% – 0.10% 07/21 UK Rightmove Rightmove House Prices YoY July 6.50% – 7.70% 07/21 Italy ISTAT Industrial Sales MoM May -1.00% – -0.10% 07/21 Italy ISTAT Industrial Sales WDA YoY May 0.10% – 2.20% 07/21 Italy ISTAT Industrial Orders MoM May -2.10% – 3.60% 07/21 Italy ISTAT Industrial Orders NSA YoY May -2.50% 2.30% 6.20% Source: Bloomberg (s.a. = seasonally adjusted; n.s.a. = non-seasonally adjusted; w.d.a. = working day adjusted) News Qatar  QIIK posts QR198mn 2Q2014 results, net profit down 2.9% QoQ – Qatar International Islamic Bank (QIIK) registered a net profit of QR198mn in 2Q2014, receding by 2.9% QoQ (+10% YoY). Earnings came inline with our estimate of QR203mn. The bank’s total assets stood at QR36.1bn in 1H2014 as compared to QR34.0bn in 1Q2014, indicating a growth rate of 6.2% QoQ (+4.9% YTD). QIIK’s loans portfolio grew robustly by 4.8% QoQ (+10% YTD) to QR20.9bn. The bank’s Capital adequacy under Basel II stood at 17.85%. The bank’s CEO Abdulbasit A al- Shaibei said that QIIK planned to open more branches in 2014, in order to meet the needs of the bank’s growing customer base. (Gulf-Times.com, QNBFS)  MARK 2Q2014 profit rises 9.0% QoQ – Masraf Al Rayan (MARK), reported a 12.1% increase in 2Q2014 net profit beating analysts' expectations. Net profit for the three months to June 30 was QR471.4mn compared to 420.6 million riyals in the same period a year ago, Reuters calculated based on its first-half financial statement. Analysts polled by Reuters had on average forecast a net profit of 442.3 million riyals for the period (Reuters)  GDI inks 5-yr jack-up accommodation barge services contract with Dolphin Energy – Gulf Drilling International (GDI) – a subsidiary of Gulf International Services (GISS) – has signed a Letter of Award (LoA) with Dolphin Energy covering the provision of ‘jack-up accommodation barge’ services for a five- year term. Pursuant to the LoA, GDI will procure a new jack-up accommodation barge for services that are scheduled to commence upon delivery and acceptance of the vessel in 4Q2015. The new vessel will be the 3rd GDI owned jack-up accommodation barge. GDI took delivery of its recent jack-up accommodation barge, ‘Rumailah’ last month, which has since been pressed into service for another client in Qatar. GDI also manages a jack-up accommodation barge for Dolphin Energy. (Gulf-Times.com)  N-KOM secures QR69mn contract to build floating jetty for QPMC – Nakilat-Keppel Offshore & Marine (N-KOM) has bagged a contract worth QR69mn to design and construct a floating jetty for Qatar Primary Materials Company (QPMC) at Ras Laffan. N-KOM is a JV shipyard established by Nakilat (QNNS) and Singapore’s Keppel Offshore & Marine (Keppel O&M). The floating jetty, which is scheduled for completion in early 2015, is the first project that N-KOM will be undertaking for QPMC. The floating jetty at Ras Laffan Industrial City (RLC) will be QPMC’s second floating jetty in Qatar, with another jetty project ongoing in Lusail and Gabbro berths in Mesaieed. Serving as an offloading point for aggregates, the jetty will be in close proximity to the stockpile located within the industrial city. N-KOM has been contracted for the engineering, procurement, installation and construction (EPIC) of the floating jetty. Once completed, the jetty will have an annual aggregates handling capacity of 7.8mn tones. (Gulf-times.com)  QCB to issue new notes during Eid Al-Fitr – The Qatar Central Bank (QCB) announced that it will issue new Qatari Riyal (QR) banknotes of all denominations on the occasion of Eid Al-Fitr. The bank releases new banknotes periodically throughout the year. The amount has reached an estimated QR1.7bn for notes of all denominations. QCB circulates a large amount of banknotes, especially during the holy month of Ramadan each year. (Peninsula Qatar)  EQ, DHBK ink partnership agreement to support SMEs – Small and medium-sized enterprises (SMEs) development company Enterprise Qatar (EQ) and Doha Bank (DHBK) have signed a partnership agreement to further support entrepreneurs and SME owners. This agreement is part of the activation process of the Rating & Accreditation program launched earlier by EQ to help entrepreneurs and SMEs improve commercial and financial processes. Under the terms of the agreement, DHBK will provide a comprehensive package of services and facilities to the companies rated by EQ. The package offered to approved companies includes credit enhancement, discounts for debt arrangement & loans processing fees, preferential handling upon submitting requests for services, reduction of security requirements, and competitive pricing. (Gulf-Times.com)  Ashghal: Work begins on Al Rayyan road upgrade project – The Public Works Authority (Ashghal) said work on the first and second phases of the Al Rayyan Road upgrade project has started with the first phase scheduled to be completed by 4Q2016. The project – part of Ashghal’s Expressway Program – aims to improve traffic flow and reduce congestion in an area vital to the movement of goods and people into Doha. According to Ashghal, the first and second phase of the Al Rayyan upgrade project, which will be built at an estimated cost of QR4.5bn, will provide “an efficient road network, improving travel experience for road users in and around the area. The phase one involves a 2.9 kilometers stretch from west of Khalid bin Abdullah al-Attiyah roundabout (New Rayyan roundabout) to the east of Bani Hajer roundabout. The second phase stretching 5.3 kilometers from west of Sports roundabout to the west of Khalid bin Abdullah Al- Attiyah roundabout (New Rayyan roundabout) is expected to be completed by 3Q2017. (Gulf-times.com)  KCBK appoints acting CEO – Al Khalij Commercial Bank (KCBK) has appointed Mr. Hesham Ezzdine — Group Chief Operating Officer, as its acting Group Chief Executive Officer (GCEO) on an interim basis effective from the close of business of July 22, 2014. (QE)  GWCS re-elects Chairman and Vice Chairman of BoD – Gulf Warehousing Company (GWCS) announced that Sheikh Fahad Hamad J J Al-Thani and Mr. Ahmed Mubarak N A Al-Maadid have voiced their intention to step down from their posts of Chairman and Vice Chairman of the Board of Directors (BoD) for
  4. 4. Page 4 of 7 GWCS. After accepting their decision, the board by a secret ballot has re-elected Sheikh Abdulla Fahad J J Al-Thani and Sheikh Fahad Hamad J J Al-Thani as Chairman and Vice Chairman, respectively. (QE) International  Fed researchers optimistic on long-term unemployment drop – The Federal Reserve researchers said they see a number of reasons to be optimistic about improvement in the US labor market after a “sizable decline” in long-term joblessness this year. The Fed board economists, in a post on the central bank’s website, cited a shrinking proportion of people unemployed for more than six months, greater stability in the labor-force participation rate and an increase in the ratio of employment to population. According to Tomaz Cajner and David Ratner, researchers at the central bank, the fight against unemployment during the recent recovery has been mainly one of bringing down the long-term unemployment rate. Long-term unemployment, which Chairperson Janet Yellen has called a “grave concern,” has fallen at a pace which has improved the job market faster than Fed estimates. The main jobless rate declined to 6.1% last month, the lowest in almost six years and near a level central bank officials did not expect to see until the end of 2014. The Federal Open Market Committee plans to release a monetary policy statement on July 30 after a two-day meeting in Washington. Cajner and Ratner said about two-thirds of the drop in the unemployment rate since the end of 2010 was due to long-term jobless finding employment. The labor Department data showed that the overall rate has fallen from 9.6% at the end of 2010. (Bloomberg)  Fed’s junk loan bubble-busting faces trouble as sales jump – One of the Federal Reserve’s first post-crisis tests of its ability to quash excessive risk-taking using regulatory tools is so far looking like a failure. The Fed’s Board of Governors told Congress last week that it is engaged in “strong supervisory follow-up” to guidance given to banks in 2013 to improve their underwriting standards for high-yield loans. Despite those efforts, Chairman Janet Yellen said she is still seeing a “marked deterioration” in quality. For the first time, more than half of the junk-rated loans arranged in the US this year lack typical lender protections like limits on the amount of debt borrowers can amass relative to earnings. Yellen’s own easy-money policies are boosting demand for such high-yielding products at the same time that she tests her doctrine that financial bubbles should be constrained by supervisory actions, not a general rise in interest rates. (Bloomberg)  Britain’s seven-year famine ends as recovery powers on – The economy probably grew for a sixth consecutive quarter in the three months through June, returning gross domestic product to levels last seen before the financial crisis. The output this year is on course to surpass its 2007 peak, ending an era that Bank of England (BoE) officials used to describe in biblical terms as “seven lean years” following “seven years of plenty.” Britain’s revival may provide a fillip to Prime Minister David Cameron as he seeks re-election next year, and heap pressure on BoE Governor Mark Carney to begin removing emergency stimulus. According to BNP Paribas SA, while policy makers have resisted lifting interest rates from a record low, there is a 40% chance one of them voted for an increase this month. (Bloomberg)  Bundesbank sees second-quarter German stagnation, IMF upbeat on full year – The Bundesbank said that the German economy probably stagnated in the second quarter in the face of political tensions abroad, but its recovery is unlikely to be held up for long by conflicts on the rim of Europe. Highlighting the underlying strength of Europe's largest economy, the International Monetary Fund raised its forecasts for German growth, projecting an expansion of 1.9% this year – up from the 1.7% it had previously projected. The Fund said Germany should give further impetus to its economy, as well as supporting the broader Eurozone, by increasing public investments - something the healthy state of its finances gave it leeway to do. The Bundesbank said Europe's economic locomotive lost traction in the second quarter. Construction activity in April and May was below that of the mild winter months. (Reuters)  Japan government trims economic growth estimate for FY2014-15 – The Cabinet Office estimates showed that the Japanese government has slightly lowered its economic growth forecast for the current fiscal year to March 2015 due to sluggish exports and a larger-than-expected pullback in demand after the April sales-tax hike. The government now sees real GDP growth at 1.2% in fiscal 2014/15, versus 1.4% in its prior forecast issued earlier this year. The growth is expected to accelerate to 1.4% in the following year. The estimates are broadly in line with projections made by the Bank of Japan, which last week cut its economic growth forecast for the current fiscal year. The Cabinet Office estimates also showed that overall consumer prices, including those of fresh food and energy, are seen rising 1.2% YoY in fiscal 2014/15 and increasing 1.8% in the following year. The consumer price estimates exclude the effect of the sales tax hike. (Reuters)  Insiders worry China's stimulus focus delays reform drive – Policy insiders are concerned that China's ambitious reform agenda is being sidelined by a focus on stimulus to meet the government's growth target, delaying the planned overhaul of the world's second-largest economy. The government unveiled plans for some of the most comprehensive reforms in nearly 30 years last November, but since then has only made incremental changes as a rapid slowdown in the economy dominated policy making in the first half of 2014. Sources at government think- tanks involved in policy discussions said enough had been done to support growth and now expected to see some progress on economic reforms. Xu Hongcai, senior economist at China Center for International Economic Exchanges, a well-connected think-tank in Beijing said they do not need to prescribe a strong medicine on policy. (Reuters) Regional  DCCI: Saudi Arabia’s Islamic banking assets reach $285bn in 2013 – According to a report released by the Dubai Chamber of Commerce and Industry (DCCI) based on a recent study by Ernst and Young (EY), global Islamic banking assets have registered a cumulative annual growth of about 16% over 2008- 2012, reflecting the radical shift from conventional financial system in favor of Islamic finance. The report stated that there are 38mn Islamic banking customers around the world with two- thirds of them in Qatar, Indonesia, Saudi Arabia, Malaysia, the UAE and Turkey (QISMUT). Among these six prominent Islamic finance countries, Saudi Arabia is the biggest market in terms of Islamic banking assets with an estimated value of $285bn in 2013 as compared to $245bn in 2012. Saudi Arabia represents about 43% of the total Islamic banking assets in all the six countries. It also accounts for about 53% of Saudi Arabia’s total domestic banking assets. In the region, the UAE is emerging as another serious player in this sector with total Islamic banking assets growing to about $95bn in 2013 as compared to $83bn in 2012. The Dubai Chamber report added that the compound annual growth rate (CAGR) for Islamic banking assets in the UAE is expected to be about 17% over 2013-2018. The group of QISMUT was the fastest-growing market for Islamic banking in
  5. 5. Page 5 of 7 2012, with its total Islamic banking assets reaching about $567bn and registering a CAGR of about 16.4% over 2008- 2012. The Dubai Chamber research also showed that Islamic banking profit pool is globally projected to reach $30.5bn by 2018, driven mainly by higher retail focus. (GulfBase.com)  GCC to launch consumer protection body in 2016 – According to sources, the planned Gulf Cooperation Council (GCC) consumer protection commission will be launched in 2016. The GCC has moved to set up a commission to protect consumers after markets in the six-member council saw a proliferation of imported counterfeit goods and a growing number of sector monopolies. The GCC’s Assistant Secretary- General for Economic Affairs, Abdullah Al-Shibli, said that the commission will bring together points of view on public policy about consumer protection in the GCC countries, facilitate the exchange of information and the conduct of research studies on consumer markets, & provide a channel of communication for GCC member-states to discuss policies to combat counterfeiting and unfair trading practices. (GulfBase.com)  Cash-flush Gulf banks grab top spots in region's loan market – Cash-rich Gulf banks are grabbing a growing share of the region's loan market as they cut fees and ease terms, elbowing aside some of the foreign banks which used to dominate lending. The shift reflects the weakened state of European and US banks in the wake of the global financial crisis; they face cost-cutting and regulatory pressures in their home markets, preventing them from going after business in the Gulf so aggressively. It also reflects a change in the operating environment for Gulf banks. Aided by high oil prices and rapid economic growth in the region, they have been able to rebuild their balance sheets since the crisis and in many cases cut back provisions for bad loans, leaving them flush with cash. The Thomson Reuters league tables show only eight banks from outside the region in 1H2014. HSBC, which headed the list in 1H2013, has moved down to third position and been replaced at the top by Saudi Arabia's Samba. Standard Chartered dropped to 21st place from fourth. Abu Dhabi's First Gulf Bank moved to second place from 23th. (Reuters)  Spicejet denies stake sale talks – India-based low-cost airline, SpiceJet has denied stake sale talks with Qatar Airways (QA) and Eithad Airways. (Bloomberg)  Saudi Arabia to open up $531bn stock market to foreigners – Saudi Arabia will open up its stock market to international investors, giving foreigners greater access to the Arab world’s biggest bourse as the oil-rich kingdom seeks to diversify its economy. According to the official news agency, SPA, the nation’s cabinet authorized the Capital Market Authority to allow overseas financial institutions to trade equities in the Tadawul All Share Index and gave the regulator scope to determine timing. The $531bn market is currently limited to domestic investors and foreigners from the six-nation GCC. Saudi Arabia is removing barriers on one of the world’s most-restricted major stock exchanges as the government pursues a $130bn spending plan to boost non-oil industries. King Abdullah has kept the economy expanding at an average rate of 6.4% in the past four years even as Middle Eastern neighbors from Egypt to Iraq and Dubai grappled with political and financial-market turmoil. (Bloomberg)  Mobily, Almajd TV sign MoU – Etihad Etisalat Company (Mobily) has signed a MoU related to a strategic partnership with Almajd TV Network, with an aim to provide special and exclusive services to Almajd Network subscribers. (GulfBase.com)  STC BoD approves SR1.5bn dividend for 2Q2014 – Saudi Telecom Company’s (STC) board of directors has approved the distribution of 7.5% dividend (SR0.75 per share) amounting to SR1.5bn for 2Q2014. Shareholders, who are registered in the registers of the Securities Depository Center (Tadawul) on July 24, 2014, will be eligible to receive the dividend. The dividend will be distributed on August 21, 2014 through Saudi Fransi Bank branches. (Tadawul)  Zamil Group BoD approves SR60mn dividend for 1H2014 – Zamil Industrial Investment Company’s (Zamil Group) board of directors has approved the distribution of 10% dividend (SR1 per share) amounting to SR60mn for 1H2014. Shareholders, who are registered in the registers of the Securities Depository Center (Tadawul) on July 24, 2014, will be eligible to receive the dividend. The dividend will be distributed on August 21, 2014. (Tadawul)  Mobily BoD recommends SR962.5mn dividend for 2Q2014 – Etihad Etisalat Company’s (Mobily) board of directors has recommended the distribution of 12.5% dividend (SR1.25 per share) amounting to SR962.5mn for 2Q2014. Shareholders, who are registered in the registers of the Securities Depository Center (Tadawul) on July 24, 2014, will be eligible to receive the dividend. The dividend will be distributed on August 11, 2014. (Tadawul)  Bahri concludes first phase of merger process with Vela International Marine Limited – The National Shipping Company of Saudi Arabia (Bahri) has concluded the first phase of the merger process with the Vela International Marine Limited’s fleet and operations as Matar Star. The first of the VLCC vessels in the Vela fleet was transferred to Bahri's ownership on July 21, 2014 and its name was changed to Nisalah. This marks a milestone in the transaction to merge the Vela fleet and operations with Bahri as it signifies the effective date of the long-term contract of affreightment, whereby Bahri becomes the exclusive carrier of all Aramco VLCC sized crude oil cargos sold on a delivered basis. The remaining Vela vessels shall be transferred to Bahri on a staggered basis according to an agreed upon vessel delivery schedule with Vela and is expected to be completed by 2014-end. The financial impact will materialize during 3Q2014. (Tadawul)  UCA BoD recommends capital increase – United Cooperative Assurance Company’s (UCA) board of directors has recommended an increase in the company's capital through a rights issue with a total value of SR210mn, instead of SR140mn as previously announced. The capital increase is subject to meeting the SAMA requirements and approval of the regulatory authorities & the extraordinary general assembly on the capital increase, the price and the number of shares to be issued. The date will be the close of trading on the day of EGM. The reasons for recommendation are to maintain the solvency margin of the business and support the company’s future growth. (Tadawul)  IMF raises Saudi economic growth forecast to 4.6% for 2014 – The International Monetary Fund (IMF) said that Saudi Arabia's economy is likely to grow 4.6% in 2014, more than previously estimated, due to the robust performance of the private sector. The private sector growth is expected to remain strong, while oil production is expected to witness little change from 2013. Large-scale infrastructure projects and spending on housing will continue to support the non-oil sector growth. The IMF said inflation in the country should remain subdued in 2014 despite higher growth expectations. It forecasted inflation to be at 2.9%, slightly lower than 3% it estimated in April 2014. The Fund expects the country's fiscal surplus to more than halve to 2.5% of GDP in 2014, the smallest since 2010, from 5.8% in 2013. But IMF also said that Riyadh's fiscal position is still strong. The IMF said the current monetary policy stance in Saudi Arabia, which pegs its SR to the USD, was appropriate.
  6. 6. Page 6 of 7 But the Fund called for careful monitoring of rising equity prices and a rapid increase in mortgage lending. The IMF also saw scope for refining liquidity management in the banking sector. (Reuters)  Saudi King Appoints Al-Furaih as Central Bank Deputy Governor – Saudi Arabia’s King Abdullah has appointed Abdulaziz al-Furaih as Deputy Governor of the Kingdom’s Central Bank. Al-Furaih is currently serving as Deputy CEO of Riyad Bank (RIBL) and a member of the board of directors at Saudi Electricity Company (SEC). (Bloomberg)  Saudi CMA suspends trading of SANAD shares for one session – The Saudi Capital Market Authority (Saudi CMA) has suspended trading of Sanad Insurance and Reinsurance Cooperative Company (SANAD) shares for one session, after the company’s accumulated losses reached 80% of its capital. Saudi CMA will place an orange flag next to the company’s name on Tadawul. The settlement will occur within two business days (T+2). (Tadawul)  Saudi CMA suspends trading of Al-Ahlia shares for two hours on July 22 – The Saudi Capital Market Authority (Saudi CMA) has suspended trading of Al-Ahlia Insurance Company (Al-Ahlia) shares for two hours from the start of the trading session on July 22, 2014, while orders maintenance will start from 12:30 pm, as the company’s accumulated losses reached 74.38% of its capital. Saudi CMA will place a yellow flag next to the company’s name on Tadawul. (Tadawul)  Saudi CMA to continue suspension of Al-Baha stock – The Saudi Capital Market Authority (Saudi CMA) has announced that the stock of Al-Baha Investment and Development Co. (Al-Baha) continues to be suspended, since the company’s accumulated losses reached 122.4% of its capital. The CMA will place a red flag next to the company’s name on the Saudi Stock Exchange (Tadawul) website. Investors are allowed to trade the stock during the suspension period through authorized persons in accordance with the mechanism pursued by the exchange. (Tadawul)  Saudi CMA suspends trading of SALAMA shares for two hours on July 22 – The Saudi Capital Market Authority (Saudi CMA) has suspended trading of Salama Cooperative Insurance Company (SALAMA) shares for two hours from the start of the trading session on July 22, 2014, while orders maintenance will start from 12:30 pm, as the company’s accumulated losses reached 71.1% of its capital. Saudi CMA will place a yellow flag next to the company’s name on Tadawul. (Tadawul)  Saudi CMA to continue suspension of MMG stock – The Saudi Capital Market Authority (Saudi CMA) has announced that the stock of Mohammad Al Mojil Group Company (MMG) continues to be suspended, since the company’s accumulated losses reached 204.9% of its capital. The CMA will place a red flag next to the company’s name on the Saudi Stock Exchange (Tadawul) website. Investors are allowed to trade the stock during the suspension period through authorized persons in accordance with the mechanism pursued by the exchange. (Tadawul)  Saudi CMA suspends trading of Atheeb Telecom shares for two hours on July 22 – The Saudi Capital Market Authority (Saudi CMA) has suspended trading of Etihad Atheeb Telecommunication Company (Atheeb Telecom) shares for two hours from the start of the trading session on July 22, 2014, while orders maintenance will start from 12:30 pm, as the company’s accumulated losses reached 52.6% of its capital. Saudi CMA will place a yellow flag next to the company’s name on Tadawul. (Tadawul)  Asian, western firms bid for UAE oilfields – According to sources, Asian and western firms have bid to help operate the UAE's biggest oilfields after a deal with oil majors expired in 2014. However, the UAE is yet to decide whether to let Asian oil buyers in for the long haul. A final decision on the winning firms is unlikely before early 2015 as political leaders in Abu Dhabi consider whether to bring in Asian firms or stick with old partners. Chinese, Korean and Japanese firms are vying for a stake in the oilfields. The onshore fields produce 1.6mn bpd, over half of UAE's oil output. (Reuters)  NBF net profit jumps 30.5% to AED239.5mn in 1H2014 – National Bank of Fujairah (NBF) reported a net profit of AED239.5mn in 1H2014 as compared to AED183.5mn in 1H2013, representing an increase of 30.5%. The bank recorded a net profit of AED124mn in 2Q2014 as compared to AED93mn in 2Q2013. Net interest income reached AED160.5mn in 2Q2014 as compared to AED137.6mn in 2Q2013. Total assets stood at AED23.5bn as of June 30, 2014 as compared to AED21.5bn as of December 31, 2013, reflecting an increase of 9.4%. EPS amounted to AED0.20 at the end of 1H2014 as compared to AED0.17 at the end of 1H2013. Loans & advances stood at AED15.3bn as of December 31, 2013 as compared to AED14.3bn, up by 15.1% from June 30, 2013. Customer deposits reached AED16.6bn as compared to AED15bn at December 31, 2013 and up by 33.8% from June 30, 2013. (ADX)  KFH reports net profit of KD28.5mn in 2Q2014 – Kuwait Finance House (KFH) reported a net profit of KD28.5mn in 2Q2014 as compared to KD26.8mn in 2Q2013, reflecting an increase of 6.3%, according to Reuters calculations. The profit for 1H2014 increased by 10% YoY to reach KD54.6mn. Total assets gained 11% YoY to stand at KD16.7bn as of June 30, 2014, while deposits rose 4% over the same period to KD10.7bn. (Reuters)  Majan Glass receives fire insurance claim – Majan Glass Company announced that it has received a fire insurance claim of OMR382,659 (including policy excess OMR10,000) from its insurers as full and final settlement. (MSM)  Bahrain Duty Free shop launches "Shop and Collect" facility for customers – Bahrain Duty Free Shop Complex has announced the launch of an upgraded "Shop and Collect" facility for its customers at Bahrain International Airport. The upgraded system has substantially reduced the time needed to process shipments, and also allows for better communication with the customers during the process. Customers will now receive an SMS within 45 seconds of completing the order at the cash point. They will also receive another message reminding them of their order one hour before the collection time, and a final one within 45 seconds of collecting the item. (GulfBase.com)  Batelco demands full payment from Siva Group – Bahrain Telecommunications Company (Batelco) has demanded full payment of the judgment debt totaling $212mn awarded by the English High Court of Justice against Chinnakannan Sivasankaran and Siva Group. The judgment, made in the Commercial Court of the English High Court of Justice, fully upheld the claim of BMIC, a fully-owned subsidiary of Batelco. The court held that the defendants had failed to honor a settlement agreement signed in November 2011 relating to a commercial venture into which both parties had entered in 2009. The defendants were ordered to pay the judgment debt by June 26, 2014. However, neither Sivasankaran nor Siva Ltd has complied with the court’s order as no payment has yet been made. (Bahrain Bourse)
  7. 7. Contacts Saugata Sarkar Abdullah Amin, CFA Shahan Keushgerian Head of Research Senior Research Analyst Senior Research Analyst Tel: (+974) 4476 6534 Tel: (+974) 4476 6569 Tel: (+974) 4476 6509 saugata.sarkar@qnbfs.com.qa abdullah.amin@qnbfs.com.qa shahan.keushgerian@qnbfs.com.qa Sahbi Kasraoui Ahmed Al-Khoudary QNB Financial Services SPC Manager – HNWI Head of Sales Trading – Institutional Contact Center: (+974) 4476 6666 Tel: (+974) 4476 6544 Tel: (+974) 4476 6548 PO Box 24025 sahbi.alkasraoui@qnbfs.com.qa ahmed.alkhoudary@qnbfs.com.qa 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 or 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 7 of 7 Rebased Performance Daily Index Performance Source: Bloomberg Source: Bloomberg Source: Bloomberg (* Market closed on 21 July 2014) Source: Bloomberg (* Market closed on 21 July 2014) 80.0 90.0 100.0 110.0 120.0 130.0 140.0 150.0 160.0 170.0 180.0 190.0 200.0 210.0 Jul-10 Jul-11 Jul-12 Jul-13 Jul-14 QE Index S&P Pan Arab S&P GCC 0.1% (0.5%) (0.2%) (0.0%) (0.1%) 1.5% 2.5% (1.0%) 0.0% 1.0% 2.0% 3.0% SaudiArabia Qatar Kuwait Bahrain Oman AbuDhabi Dubai Asset/Currency Performance Close ($) 1D% WTD% YTD% Global Indices Performance Close 1D% WTD% YTD% Gold/Ounce 1,312.55 0.1 0.1 8.9 DJ Industrial 17,051.73 (0.3) (0.3) 2.9 Silver/Ounce 20.93 0.3 0.3 7.5 S&P 500 1,973.63 (0.2) (0.2) 6.8 Crude Oil (Brent)/Barrel (FM Future) 107.68 0.4 0.4 (2.8) NASDAQ 100 4,424.70 (0.2) (0.2) 5.9 Natural Gas (Henry Hub)/MMBtu 3.84 (1.6) (1.6) (11.5) STOXX 600 337.95 (0.5) (0.5) 3.0 LPG Propane (Arab Gulf)/Ton 103.63 0.1 0.1 (18.1) DAX 9,612.05 (1.1) (1.1) 0.6 LPG Butane (Arab Gulf)/Ton 122.13 0.1 0.1 (10.0) FTSE 100 6,728.44 (0.3) (0.3) (0.3) Euro* 1.35 0.0 0.0 (1.6) CAC 40 4,304.74 (0.7) (0.7) 0.2 Yen 101.40 0.1 0.1 (3.7) Nikkei* 15,215.71 0.0 0.0 (6.6) GBP 1.71 (0.1) (0.1) 3.1 MSCI EM* 1,063.26 0.0 0.0 6.0 CHF 1.11 0.0 0.0 (0.6) SHANGHAI SE Composite 2,054.48 (0.2) (0.2) (2.9) AUD 0.94 (0.2) (0.2) 5.1 HANG SENG 23,387.14 (0.3) (0.3) 0.3 USD Index 80.56 0.0 0.0 0.7 BSE SENSEX 25,715.17 0.3 0.3 21.5 RUB 35.21 0.2 0.2 7.1 Bovespa 57,633.92 1.1 1.1 11.9 BRL 0.45 0.2 0.2 6.4 RTS 1,239.13 (2.9) (2.9) (14.1) 188.1 152.8 138.5