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Daily market report (28)

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The QSE Index rose marginally to close at 10,153.4

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Daily market report (28)

  1. 1. Page 1 of 9 QSE Intra-Day Movement Qatar Commentary The QSE Index rose marginally to close at 10,153.4. Gains were led by the Real Estate and Banks & Financial Services indices, gaining 0.6% and 0.2%, respectively. Top gainers were Alijarah Holding and The Commercial Bank, rising 1.8% and 1.4%, respectively. Among the top losers, Qatar National Cement Company fell 4.5%, while Mannai Corporation was down 2.8%. GCC Commentary Saudi Arabia: The TASI Index rose 4.3% to close at 7,835.6. Gains were led by the Pharma, Biotech. and Retailing indices, rising 8.7% and 5.9%, respectively. Mouwasat Medical Services and Saudi Enaya Cooperative Ins. were up 10.0% each. Dubai: The DFM General Index declined 0.1% to close at 2,736.4. Invest. & Fin. Services and Banks indices fell 0.4% each. International Financial Advisors fell 9.1%, while Almadina for Finance and Investment Company was down 4.8%. Abu Dhabi: The ADX General Index fell 0.9% to close at 4,882.3. The Services index declined 2.0%, while the Banks index fell 1.7%. Union Insurance Co. declined 9.8%, while Methaq Takaful Insurance was down 4.6%. Kuwait: The Kuwait Main Market Index declined 0.4% to close at 4,697.0. The Consumer Services index fell 0.6%, while the Consumer Goods index declined 0.3%. Al-Massaleh Real Estate fell 9.8%, while Sultan Center Food Prod. was down 8.5%. Oman: The MSM 30 Index fell 0.2% to close at 4,452.9. Losses were led by the Industrial and Financial indices, falling 0.3% and 0.2%, respectively. Al Madina Investment fell 2.5%, while Almaha Petroleum Products Mar. was down 2.2%. Bahrain: The BHB Index fell 0.1% to close at 1,315.5. The Investment index declined 0.3%, while the other indices ended flat or in green. Khaleeji Commercial Bank declined 5.6%, while GFH Financial Group was down 1.5%. QSE Top Gainers Close* 1D% Vol. ‘000 YTD% Alijarah Holding 8.60 1.8 16.9 (19.7) The Commercial Bank 41.55 1.4 100.4 43.8 Salam International Inv. Ltd. 4.99 1.2 15.7 (27.6) Islamic Holding Group 24.55 1.0 6.0 (34.5) Masraf Al Rayan 37.45 0.9 224.2 (0.8) QSE Top Volume Trades Close* 1D% Vol. ‘000 YTD% Mazaya Qatar Real Estate Dev. 7.60 (1.3) 1,342.4 (15.6) Vodafone Qatar 8.40 0.0 648.1 4.7 Qatar Gas Transport Company Ltd. 17.70 (1.6) 523.7 9.9 Qatar First Bank 4.39 (1.3) 473.6 (32.8) Ezdan Holding Group 10.72 0.7 386.2 (11.3) Market Indicators 25 Oct 18 24 Oct 18 %Chg. Value Traded (QR mn) 163.1 215.9 (24.4) Exch. Market Cap. (QR mn) 570,123.5 570,376.2 (0.0) Volume (mn) 5.4 6.6 (18.5) Number of Transactions 3,163 3,667 (13.7) Companies Traded 42 41 2.4 Market Breadth 17:21 9:31 – Market Indices Close 1D% WTD% YTD% TTM P/E Total Return 17,889.08 0.0 (0.4) 25.2 15.0 All Share Index 2,996.27 (0.0) 0.1 22.2 15.0 Banks 3,664.49 0.2 1.5 36.6 13.8 Industrials 3,372.21 (0.1) (1.7) 28.7 16.0 Transportation 2,163.01 (0.8) 2.0 22.3 12.8 Real Estate 1,897.88 0.6 1.0 (0.9) 15.7 Insurance 3,069.78 (0.3) (1.8) (11.8) 18.7 Telecoms 947.67 (0.8) (3.3) (13.8) 36.2 Consumer 6,952.96 (1.0) (2.9) 40.1 14.1 Al Rayan Islamic Index 3,867.60 0.0 (1.0) 13.0 15.2 GCC Top Gainers ## Exchange Close # 1D% Vol. ‘000 YTD% Mouwasat Medical Serv. Saudi Arabia 77.10 10.0 1,634.7 1.8 Almarai Co. Saudi Arabia 49.40 8.5 1,232.1 (8.1) Yanbu National Petro. Co. Saudi Arabia 69.70 8.1 2,418.7 18.5 Arab National Bank Saudi Arabia 34.10 7.2 3,561.1 38.1 Bank Al Bilad Saudi Arabia 24.66 7.2 3,345.6 20.4 GCC Top Losers ## Exchange Close # 1D% Vol. ‘000 YTD% Nat. Shipping Company. Saudi Arabia 31.70 (5.8) 8,325.8 0.7 Al Ahli Bank of Kuwait Kuwait 0.29 (2.4) 0.1 (0.3) First Abu Dhabi Bank Abu Dhabi 14.10 (2.4) 5,770.8 37.6 Yanbu Cement Co. Saudi Arabia 19.54 (2.3) 363.3 (42.2) DAMAC Properties Dubai 1.99 (2.0) 345.6 (39.7) Source: Bloomberg (# in Local Currency) (## GCC Top gainers/losers derived from the S&P GCC Composite Large Mid Cap Index) QSE Top Losers Close* 1D% Vol. ‘000 YTD% Qatar National Cement Company 60.55 (4.5) 24.8 (3.7) Mannai Corporation 58.30 (2.8) 5.2 (2.0) Widam Food Company 68.43 (2.2) 32.5 9.5 Qatar Gas Transport Company Ltd 17.70 (1.6) 523.7 9.9 Ooredoo 67.00 (1.4) 131.0 (26.2) QSE Top Value Trades Close* 1D% Val. ‘000 YTD% Industries Qatar 139.50 0.4 27,407.2 43.8 QNB Group 188.02 0.0 25,840.2 49.2 Qatar Islamic Bank 144.00 (0.3) 16,290.8 48.5 Mazaya Qatar Real Estate Dev. 7.60 (1.3) 10,184.2 (15.6) Qatar Fuel Company 171.52 (1.0) 10,057.5 68.1 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* 10,153.36 0.0 (0.4) 3.5 19.1 44.58 156,612.9 15.0 1.5 4.3 Dubai 2,736.40 (0.1) (0.8) (3.5) (18.8) 35.34 98,173.0 7.3 1.0 6.4 Abu Dhabi 4,882.26 (0.9) (2.1) (1.1) 11.0 43.22 132,633.3 13.0 1.4 4.9 Saudi Arabia 7,835.55 4.3 2.5 (2.0) 8.4 2,571.96 499,802.7 16.2 1.8 3.6 Kuwait 4,696.96 (0.4) (0.0) (0.8) (2.7) 62.68 32,139.0 14.8 0.9 4.4 Oman 4,452.91 (0.2) 0.2 (2.0) (12.7) 5.12 19,221.8 10.2 0.8 6.1 Bahrain 1,315.53 (0.1) (0.6) (1.7) (1.2) 14.52 20,359.6 8.8 0.8 6.2 Source: Bloomberg, Qatar Stock Exchange, Tadawul, Muscat Securities Market and Dubai Financial Market (** TTM; * Value traded ($ mn) do not include special trades, if any) 10,080 10,100 10,120 10,140 10,160 10,180 10,200 9:30 10:00 10:30 11:00 11:30 12:00 12:30 13:00
  2. 2. Page 2 of 9 Qatar Market Commentary  The QSE Index rose marginally to close at 10,153.4. The Real Estate and Banks & Financial Services indices led the gains. The index rose on the back of buying support from GCC and non-Qatari shareholders despite selling pressure from Qatari shareholders.  Alijarah Holding and The Commercial Bank were the top gainers, rising 1.8% and 1.4%, respectively. Among the top losers, Qatar National Cement Company fell 4.5%, while Mannai Corporation was down 2.8%.  Volume of shares traded on Thursday fell by 18.5% to 5.4mn from 6.6mn on Wednesday. Further, as compared to the 30-day moving average of 6.1mn, volume for the day was 11.2% lower. Mazaya Qatar Real Estate Development and Vodafone Qatar were the most active stocks, contributing 24.8% and 12.0% to the total volume, respectively. Source: Qatar Stock Exchange (* as a % of traded value) Earnings Releases, Global Economic Data and Earnings Calendar Earnings Releases Company Market Currency Revenue (mn) 3Q2018 % Change YoY Operating Profit (mn) 3Q2018 % Change YoY Net Profit (mn) 3Q2018 % Change YoY Sahara Petrochemical Co. Saudi Arabia SR – – – – 168.5 2.1% The National Company for Glass Industries Saudi Arabia SR 24.6 -22.4% 3.2 128.6% 8.7 -41.2% Saudi Arabian Mining Co. Saudi Arabia SR 3,396.0 8.2% 973.3 58.4% 518.8 97.5% Saudi Industrial Development Co. Saudi Arabia SR 48.7 -25.3% -4.9 N/A -8.7 N/A Emirates Telecom. Group Company Abu Dhabi AED 13,150.5 2.0% 3,031.8 -3.1% 2,282.0 -4.0% BMMI Bahrain BHD 26.9 3.5% 1.8 1.9% 2.0 -4.6% Esterad Investment Company Bahrain BHD 0.8 52.8% – – 0.4 95.6% Source: Company data, DFM, ADX, MSM, TASI, BHB. Global Economic Data Date Market Source Indicator Period Actual Consensus Previous 10/25 US Department of Labor Initial Jobless Claims 20-October 215k 215k 210k 10/25 US Department of Labor Continuing Claims 13-October 1,636k 1,644k 1,641k 10/25 Germany IFO Institute - Institut fuer IFO Business Climate October 102.8 103.2 103.7 10/26 Germany GfK AG GfK Consumer Confidence November 10.6 10.5 10.6 10/25 France French Labor Office Total Jobseekers 3Q2018 3,456.8k – 3,440.5k 10/26 France INSEE National Statistics Office Consumer Confidence October 95 95 94 10/26 France INSEE National Statistics Office PPI MoM September 0.3% – 0.4% 10/26 France INSEE National Statistics Office PPI YoY September 3.6% – 3.7% 10/25 Japan Bank of Japan PPI Services YoY September 1.2% 1.2% 1.3% 10/27 China National Bureau of Statistics Industrial Profits YoY September 4.1% – 9.2% Source: Bloomberg (s.a. = seasonally adjusted; n.s.a. = non-seasonally adjusted; w.d.a. = working day adjusted) Earnings Calendar Tickers Company Name Date of reporting 3Q2018 results No. of days remaining Status QGTS Qatar Gas Transport Company Limited (Nakilat) 28-Oct-18 0 Due IGRD Investment Holding Group 28-Oct-18 0 Due BRES Barwa Real Estate Company 28-Oct-18 0 Due GISS Gulf International Services 28-Oct-18 0 Due QOIS Qatar Oman Investment Company 28-Oct-18 0 Due MERS Al Meera Consumer Goods Company 28-Oct-18 0 Due QGMD Qatari German Company for Medical Devices 28-Oct-18 0 Due AKHI Al Khaleej Takaful Insurance Company 28-Oct-18 0 Due MPHC Mesaieed Petrochemical Holding Company 29-Oct-18 1 Due AHCS Aamal Company 29-Oct-18 1 Due QFBQ Qatar First Bank 29-Oct-18 1 Due Overall Activity Buy %* Sell %* Net (QR) Qatari Individuals 26.19% 30.55% (7,104,859.37) Qatari Institutions 9.19% 20.35% (18,201,200.80) Qatari 35.38% 50.90% (25,306,060.17) GCC Individuals 1.31% 1.00% 508,621.12 GCC Institutions 13.28% 5.29% 13,029,083.49 GCC 14.59% 6.29% 13,537,704.61 Non-Qatari Individuals 11.76% 7.74% 6,542,832.14 Non-Qatari Institutions 38.27% 35.07% 5,225,523.42 Non-Qatari 50.03% 42.81% 11,768,355.56
  3. 3. Page 3 of 9 SIIS Salam International Investment Limited 29-Oct-18 1 Due QGRI Qatar General Insurance & Reinsurance Company 29-Oct-18 1 Due DOHI Doha Insurance Group 29-Oct-18 1 Due ERES Ezdan Holding Group 29-Oct-18 1 Due ZHCD Zad Holding Company 30-Oct-18 2 Due QNNS Qatar Navigation (Milaha) 30-Oct-18 2 Due MCCS Mannai Corporation 30-Oct-18 2 Due Source: QSE News Qatar  QIMD's bottom line rises 24.2% YoY and 8.4% QoQ in 3Q2018 – Qatar Industrial Manufacturing Company's (QIMD) net profit rose 24.2% YoY (+8.4% QoQ) to QR62.3mn in 3Q2018. The company's sales came in at QR72.8mn in 3Q2018, which represents a decrease of 16.2% YoY (-19% QoQ). In 9M2018, QIMD reported net profit of QR170.5mn as compared to QR163.5mn in 9M2017. EPS rose to QR1.31 in 3Q2018 from QR1.05 in 3Q2017. (QSE)  QFLS' bottom line rises ~19% YoY and ~59% QoQ in 3Q2018 – Qatar Fuel Company’s (QFLS) net profit rose ~19% YoY (+~59% QoQ) to ~QR322mn in 3Q2018. EPS amounted to QR8.30 in 9M2018 as compared to QR6.47 in 9M2017. In 9M2018, QFLS announced net profit attributable to shareholders, increased to QR825mn as compared to QR643mn for the same period in 2017, representing an increase of 28% YoY. QFLS’ CEO, Saad Rashid Al Muhannadi attributed the good results achieved in terms of profit level to the efforts exerted toward enhancing efficiency and capability in the company’s business operations and cost optimization in line with the study duly conducted and implemented since the year 2017. He further attributed the increase achieved in profit levels to the increase of the volume of quantities distributed through the various distribution networks, which had been enhanced and optimized both quantitatively and qualitatively to meet the persistent increase of demand for petroleum products and gas, along with accompanying services. He also attributed the increase to the prudent management of cash and investment activities. He stated that the board of directors has approved annual budget for the year 2019, pointing out that the budget comprised the anticipated key performance indicators for QFLS in relation to the distribution and marketing of petroleum products and gas and other activities of QFLS and subsidiary companies during the year 2019, and the requisite operational and capital costs and expenses. In this regard, the company has allocated about QR1.175bn to be spent on new projects intended for implementation in the year 2019. The company will also spend on the requirements for maintenance, security and safety. (QSE, Peninsula Qatar)  Qatar’s non-oil exports jump 36.5% to reach QR18.3bn in 9M2018 – Qatar's non-oil exports jumped 36.5% to reach QR18.3bn in the first nine months of 2018 compared to the QR13.02bn recorded in the same period in 2017, according to a Qatar Chamber report. According to the Qatar Chamber’s Research & Studies Department and Member Affairs Department, which collated data from the 3,015 certificates of origin issued last month, non-oil exports in September stood at QR1.64bn, or a 4.6% increase over the QR1.57bn recorded in September 2017. The Qatar Chamber report noted that the 3,015 certificates included 2,718 general model certificates, 130 unified certificates for the GCC countries (industrial), 148 unified Arab certificates of origin, 18 certificates of origin for preferences, and one unified certificate to Singapore. Qatar Chamber’s Director General, Saleh bin Hamad Al-Sharqi said Qatar Chamber supports locally-manufactured products and is exerting great efforts to find new international export outlets. He pointed to the facilities and incentives offered by the country to boost investments in all productive sectors with the aim of achieving self-sufficiency and increasing Qatar’s exports. The facilities, he said, helped increase non-oil exports rapidly. (Gulf-Times.com)  Qatar’s trade balance jumps 25.6% to QR15.5bn in September – Qatar's commodity trade balance rose to QR15.5bn in September, up by QR3.1bn, or 25.6%, compared to the same month last year, and a decrease of 11.8% compared to August 2017. In its preliminary report on foreign trade statistics for September, the Ministry of Development Planning and Statistics (MDPS) indicated that the value of total Qatari exports (including those of local origin and re-exports) amounted to QR26.8bn, an increase of 30.2% compared to the same month of last year, and up 1.5% from August this year. The increase in the value of commodity imports reached about QR11.4bn compared to the same period last year, and by 27.7% compared to August this year, according to MDPS data. In comparison to September last year, exports of gases and other hydrocarbons increased to QR16.8bn, an increase of 47.4%. Exports of oils and oils obtained from non-ferrous mineral raw materials increased by 55.3%, recording about QR2.6bn, while the value of oils and oils of raw materials of the continental crude decreased by 6.4% to QR4.2bn. Japan was the top exports destination country for Qatar last September, accounting for about QR4.7bn, or 17.5% of the total value, followed by South Korea at about QR4.2bn, or 15.7%, and India at QR4bn, or 15.1%. (Gulf-Times.com)  QCB: Qatar’s banking assets rise over 4% YoY to hit QR1.4tn in September – Total assets of commercial banks in Qatar registered more than a 4% YoY increase to QR1.4tn in September this year, according to Qatar Central Bank (QCB) figures. Of the total assets, as much as 68% was credit portfolio that amounted to QR948.19bn, which witnessed about a 6% growth YoY in September 2018, according to QCB data. Much of the credit went to the private sector, which accounted for about 61% of the total, or QR574.39bn in September this year. Credit to the private sector grew more than 9% on a yearly basis. The higher growth in credit to the private sector shows the resiliency in the overall economy outside hydrocarbons, even amidst the economic blockade and the increasing cost of credit,
  4. 4. Page 4 of 9 market sources said. With the market hinting towards hardening US interest rates, there could be a reflection in the Qatari monetary landscape amid the fixed exchange parity with the Dollar, they said. Given the reserves and buffers, Qatar’s interest rate may not exactly reflect the changes in the US benchmark rates, they said. Credit to the public sector stood at QR357.19bn, or about 38% of the total, in September 2018, witnessing about 3% YoY rise. Of the QR948.19bn total credit, domestic credit stood at QR865.47bn, or 91%, whereas overseas credit amounted to QR82.73bn or 9%. (Gulf-Times.com)  Exit permit reform comes into force from today – The end of exit permit for migrant workers covered by the Labor Law will come into force from today, according to the Law No. 13 of 2018, which amended certain provisions of the Law No. 21 of 2015 regulating the entry, exit and residency of expatriates. The amended law ensures the right of the expatriate workers that come under the provisions of the Labor Law to leave the country without exit permit, while the new law is not applicable on employees of government entities, semi- governmental organizations and also on domestic help. After amendments in the said law, the Ministry of Administrative Development, Labor and Social Affairs (MADLSA) had asked all companies and employers to prepare lists of the names of employees, who required prior approval of exit permit and to send them electronically to the Ministry through a special platform set up by the MADLSA, the Ministry of Interior stated. (Peninsula Qatar)  International Bank of Qatar’s net profit jumps 13% to QR487.5mn in 9M2018 – International Bank of Qatar has posted a net profit of QR487.5mn in nine months up to September, up 13% on the same period last year. The bank’s total assets stood at QR30.6bn, while customer loans and advances increased by 3% to QR22.5bn at the end of September 30, 2018. Customer deposits increased by 8% to QR21.4bn at the end of September 30, 2018 as compared to the same period last year. Net operating income came in at QR711.4mn in the nine months up to September, up 8% on the same period last year. “These strong results are driven by core underlying business flows emanating from a strong client franchise. All business segments generated a positive YoY total income performance, which contributed to the overall net profit increase and a significant improvement in cost income ratios. Should we include one off items, of an exceptional nature, the net profit growth was actually much higher, reaching 28%,” International Bank of Qatar stated. (Gulf-Times.com)  QFC, QSE, FTSE Russell roundtable focuses on global benchmarks – The Qatar Financial Centre (QFC), the Qatar Stock Exchange (QSE) and FTSE Russell, a world-leading provider of benchmarking, analytics and data solutions, hosted a roundtable titled ‘Outlook for 2019 and the GCC’s Growing Influence in Global Benchmarks’. The roundtable discussion focused on key issues that are expected to confront investors in 2019, the relevance of the Qatari market in global indices, and increasing investor interest. The event was attended by Philip Lawlor, Global Head of Markets Research, FTSE Russell; Kate MacPherson, Manager, Middle East & Africa, FTSE Russell; Mohsin Mujtaba, Director, Product and Market Development, QSE; and Henk Jan Hoogendoorn, Managing Director, Financial Sector Office, QFC Authority. Hoogendoorn said, “We are honored to partner with the Qatar Stock Exchange and FTSE Russell to host this key event that focuses on Qatar’s importance in the global indices and increasing investor appetite. This growing investor interest is clearly evident in the 27% increase in foreign direct investment inflows to Qatar between 2016 and 2017, which has been highlighted in the 2018 World Invest Report by the UN Conference on Trade and Development.” He added, “The event provided a platform for valuable discussions and the exchange of market insight and views on a number of critical issues. We look forward to hosting additional engaging and thought provoking roundtables in the future to further facilitate discussions on key areas.” (Gulf- Times.com)  Entrepreneur eyes European market for local handicraft – Many micro businesses in Qatar have benefited from public sector initiatives that promote and develop home-based companies, supporting them to penetrate new markets both locally and abroad. One of such companies is Doha-based Brush 221, a micro business specializing in decor, furniture, and home accessories, which received much-needed exposure during the second edition of ‘Made at Home’, organized recently by Qatar Development Bank (QDB). Brush 221, according to Qatari entrepreneur Moza Al-Mansoori, not only supplies home decor and accessories to local restaurants and coffee shops, but also exports its products to Italy. The company plans to expand to other European countries in the future. (Gulf-Times.com)  Ministry to open more markets for Qatari farmers – The Ministry of Municipality and Environment will open more markets to support Qatari farmers. “Promoting local produce will support Qatari farmers by lowering the marketing costs and encouraging them to increase production,” HE the Minister of Municipality and Environment, Mohamed bin Abdullah Al- Rumaihi said. Speaking to reporters after inaugurating a new vegetable yard at Al Shamal, he explained that the ministry aims to facilitate the supply of local produce from the farms to the consumers. “Such efforts ease the burden on farmers in terms of marketing their products, as all they have to do is bring their products to these markets. “The markets for local produce must be located in easily accessible areas as the products may not be suitable for long-distance transport.” HE Al-Rumaihi was of the view that Al Shamal town deserves the interest given to it as it has a large number of farmers, some of whom are yet to commence production. (Gulf-Times.com)  MoI, Kahramaa sign security agreement – Ministry of Interior’s (MoI) Director-General of Industrial Security, Khalifa Mohamed Al-Attiyah and Qatar General Electricity & Water Corporation’s (Kahramaa) Director of Shared Services, Nasser Ali Al- Mohannadi signed a Memorandum of Understanding (MoU), the MoI stated. The MoU envisages coordination and cooperation between the two entities with regard to the protection of Kahramaa facilities in the best interests of the state as well as both parties. Al-Attiyah and Al-Mohannadi signed the MoU representing the two organizations. “The MoU aims to provide technical and security support and exchange of expertise in the field of training and protection of facilities, in the interest of both parties,” the ministry added. (Gulf- Times.com)
  5. 5. Page 5 of 9 International  US economic growth slows slightly in third quarter; outlook less upbeat – The US economy slowed less than expected in the third quarter as a tariff-related drop in soybean exports was partially offset by the strongest consumer spending in nearly four years, keeping growth on track to hit the Trump administration’s 3% target this year. GDP increased at a 3.5% annualized rate also supported by a rise in inventory investment and solid government spending, the Commerce Department stated in its first estimate of third-quarter GDP growth. While that was a slowdown from a 4.2% pace in the second quarter, it still exceeded the economy’s growth potential, which economists put at about 2%. But there were red flags to the economic expansion that is now in its ninth year and the second longest on record. Business spending stalled and residential investment declined for a third straight quarter, signs that the boost from a $1.5tn tax cut was fading and higher interest rates were hurting the housing market. (Reuters)  US business spending on equipment cooling; goods trade deficit rises – US business spending on equipment appeared to have remained slow in September and the goods trade deficit widened further as rising imports outpaced a rebound in exports, suggesting economic growth moderated in the third quarter. But the growth pace in the last quarter was probably solid, with other data on October 25 showing gains in both wholesale and retail inventories last month. A tightening labor market, which is steadily lifting wage growth, is also supporting the economy. The Commerce Department stated orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, dipped 0.1% last month amid weakening demand for fabricated metals and electrical equipment, appliances and components. That followed a 0.2% decrease in the core capital goods orders in August. Economists polled by Reuters had forecasted core capital goods orders rising 0.5% last month. Shipments of core capital goods were unchanged in September for a second straight month. Core capital goods shipments are used to calculate equipment spending in the government’s GDP measurement. (Reuters)  ONS: UK’s wages pick up but still below pre-2008 crisis levels – British households enjoyed faster wage growth in the year to April, but when adjusted for inflation, earnings are still below their levels before the financial crisis a decade ago, an annual survey showed. Median full-time weekly earnings increased 3.5% in the year to April 2018, the strongest growth in nominal terms for 10 years, the Office for National Statistics (ONS) stated in its Annual Survey of Hours and Earnings. Bank of England’s (BoE) Chief Economist, Andy Haldane said this month there were finally signs of a “new dawn” for pay increases as the steep fall in unemployment prompts many employers to offer more to keep and hire staff. The BoE believes rising wages will create inflationary pressure and require further, gradual increases in interest rates, even as Britain’s economy grows only slowly because of its impending departure from the European Union. But October 25 figures looked less positive, when taking into account the rise in inflation caused in large part by the Pound’s plunge after the 2016 vote in favor of Brexit. Real-terms median earnings rose by 1.2% in the 12 months to April 2018, the ONS stated. Although that was a rebound from the 0.5% drop seen last year, growth was faster in 2016 and 2015. (Reuters)  Germany's tax revenues to continue rising until 2022 – The German government’s tax revenues this year should be €2.5bn ($2.86bn) higher than previously thought, estimates released by Finance Minister, Olaf Scholz showed. The estimates showed the federal government expects tax revenues of €321.3bn this year, which will rise gradually in each of the next four years to reach almost €368bn in 2022. (Reuters)  French consumer confidence improved slightly in October – French consumer confidence levels increased slightly in October from the previous month, when it had fallen to its lowest level since April 2016, according to data from the official INSEE statistics agency. INSEE stated its October consumer confidence level had come in at 95 points, up from 94 points in September, which had marked the lowest reading since April 2016. A Reuters poll of 13 economists had given an average forecast of 94 points for the October consumer confidence level. Concerns over an increase in inflation, with oil prices rising, have impacted consumer spending, while Italy’s economic and political turmoil also risks impacting the Eurozone. Earlier this month, INSEE trimmed its 2018 economic growth forecast for France to 1.6% from 1.7%, although INSEE stated growth could still reach 1.7%, if tax cuts this year led to an increase in household spending. (Reuters)  Japan’s September factory output seen falling, suggesting weak third-quarter GDP growth – Japan’s factory output likely slipped in September for the first time in two months due to natural disasters, a Reuters poll showed, which would boost views that the economy weakened in the third quarter. Industrial production was seen down 0.3% in September from the previous month, the poll of 16 economists showed. The August figure has been revised to a 0.2% gain from the 0.7% initially reported. Analysts said that typhoons and earthquakes, which halted operations at some factories, affected production. The trade dispute between China and the US may have a more clear impact on Japan’s economy in the coming months, they added. Japan will release GDP data for July-September on November 14. Retail sales, another key data for gauging third quarter GDP growth, are projected to rise 1.6% in September from a year earlier, slowing from August’s 2.7% increase, the poll found. Crimping spending were the natural disasters that hit Japan, analysts said. (Reuters)  China's industrial profits growth slows for fifth month as orders wane – Profit growth at China’s industrial firms slowed for the fifth consecutive month in September, as sales of raw materials and manufactured goods further ebbed, pointing to cooling domestic demand in the world’s second-biggest economy. The slowdown was in line with data last week that showed September’s factory output grew at the weakest pace since February 2016. Slowing corporate profits will put pressure on jobs, ultimately tapping the brakes on household consumption and hurting China’s overall growth. Industrial profits rose 4.1% in September from a year earlier to ¥545.5bn ($78.57bn), the National Statistics Bureau (NBS) stated. That was less than half of the pace in August, and the slowest since March. Earnings in September were mainly pressured by a greater
  6. 6. Page 6 of 9 slowdown in production and sales, declining price growth, as well as a high statistical base a year earlier, He Ping of the statistics bureau said in a statement accompanying the data. An escalating trade war with the US has also added to the pressure on overall output, and threatens to chill business investments and earnings growth in the months ahead. (Reuters) Regional  Russian Energy Minister: No need to freeze or cut oil output levels – Russian Energy Minister, Alexander Novak said that there was no reason for Russia to freeze or cut its oil production levels, noting that there were risks that global oil markets could be facing a deficit. OPEC and its partners, led by Saudi Arabia and non-OPEC member Russia agreed in June to lift oil supplies, but OPEC then signaled last week that it may have to reimpose output cuts as global inventories rise. (Reuters)  Saudi Arabia’s declares $56bn deals as conference ends amid partial boycott – Saudi Arabia stated that it has signed $56bn worth of deals at an investment conference last week and expected the US to remain a key business partner despite a partial boycott of the event over the killing of Saudi Arabian journalist Jamal Khashoggi. (Reuters)  Finance Minister: Saudi Arabia’s 3Q2018 non-oil revenue up 48% – Saudi Arabia’s 3Q2018 non-oil revenue jumped 48% from 3Q2017, to SR211bn, its Finance Minister, Mohammed al- Jadaan said. The Kingdom, which is working on a number of economic reforms to diversify its oil-reliant economy, had non- oil revenues of SR89.4bn in 2Q2018, up 42% YoY. Speaking at an investment conference in Riyadh, the minister said that spending in 3Q2018 went up by 25%. Saudi Arabia’s government expects to run a budget deficit of SR128bn next year, compared with SR195bn projected for 2018 in the original budget for this year, Al-Jadaan said last month. The deficit narrowed to SR7.36bn in 2Q2018, with revenue of SR273.59bn and spending of SR280.95bn. (Reuters)  ARNB posts 14.8% YoY increase but 3.2% QoQ decline in net profit to SR890.1mn in 3Q2018 – Arab National Bank (ARNB) recorded net profit of SR890.1mn in 3Q2018, an increase of 14.8% YoY. However, on QoQ basis, net profit declined 3.2%. Total operating income rose 0.4% YoY to SR1,683.9mn in 3Q2018. Total revenue for special commissions/investments rose 19.5% YoY to SR1,779.1mn in 3Q2018. Total assets stood at SR170.0bn at the end of September 30, 2018 as compared to SR163.6bn at the end of September 30, 2017. Loans and advances stood at SR120.5bn (+3.9% YoY), while customer deposits stood at SR130.8bn (+1.8% YoY) at the end of September 30, 2018. EPS came in at SR2.63 in 9M2018 as compared to SR2.39 in 9M2017. (Tadawul)  Saudi Arabia stated to offer series of privatization deals by March – Saudi Arabia will offer international investors the chance to invest in a raft of privatization deals from grains to healthcare and water desalination over the next six months, Economy Minister Mohammed al-Tuwaijri said. “From now until 1Q2019, we have four opportunities in silos and grains,” Al-Tuwaijri said, adding that deals in the education, healthcare and water desalinization sectors would also be offered in this period. He did not give details of the deals, but said that the government had received many expressions of interest from Asian and European companies. Saudi Arabian officials include public-private partnerships to build and operate infrastructure as well as asset sales in their definition of privatization. In an interview with Reuters last year, Al-Tuwaijri estimated the privatization program could raise about $200bn in coming years, in addition to $100bn which authorities aimed to raise by selling a stake in Saudi Aramco. (Reuters)  Maharah Human Resources said to consider local IPO – Saudi Arabia’s Maharah Human Resources is exploring an initial public offering (IPO) that would give the human resources services provider a valuation of about SR3bn, according to sources. The company is seeking to raise about SR800mn from the share sale on the local Tadawul stock exchange, which could take place as soon as 1Q2019. Samba Financial Group is underwriting and advising on the IPO, while Himmah Capital is acting as the independent adviser. No final decisions have been made and the ultimate timing of the IPO will depend on market conditions, sources added. If the share sale goes ahead as planned, a SR800mn deal could be the largest IPO for a company from the Kingdom in at least four years, according to Bloomberg. Saudi Arabian companies have raised about $990mn from IPOs in the last 12 months, the data showed. (Bloomberg)  ACWA Power to invest $658mn in South Africa – Saudi Arabian company, ACWA Power will invest $658mn in South Africa, it stated. The announcement was made at a conference to drum up investment in Africa’s most industrialized economy. (Reuters)  Al-Falih: Saudi Arabia to spend $44bn on industrialization plan – Saudi Arabia will spend $44bn on an industrialization plan, which is part of some $56bn in deals signed last week in Riyadh, Saudi Arabia’s Energy Minister, Khalid Al-Falih said in an interview with state-owned Alekhbariya TV. Development plan is focused on energy, mining, logistics, manufacturing and is part of Saudi Arabia’s economic transformation plan, Al-Falih said in another interview with Saudi-owned Al Arabiya TV. The Kingdom has established an export bank with capital of SR30bn, and SR5bn has been deposited to finance companies working in the industrialization plan. (Bloomberg)  Saudi Arabia's Red Sea tourism project to break ground in 2019 – Saudi Arabia’s Red Sea tourism project will break ground in 2019 and open the first phase of its development in 2022, the Red Sea Development Company’s CEO, John Pagano, said. Saudi Arabia plans to develop resorts on 50 islands off the Red Sea coast backed by Saudi Arabia’s sovereign wealth fund, the Public Investment Fund. The Red Sea Project, to be built between the cities of Amlaj and Al-Jawh, will offer a nature reserve, diving in coral reefs and heritage sites. (Reuters)  Saudi Arabia hopes to attract more than $427bn in investments by 2030 – Saudi Arabia expects to attract investments of more than $427bn by 2030 in its push to boost industry, Energy Minister Khalid Al-Falih said, according to state TV al- Ekhbariya. “The program to develop national industries and logistics services is the largest and most important, and has a huge impact on the Saudi Arabian economy,” Al-Falih said. The minister estimated that the country’s mineral wealth was worth more than SR1.3tn. (Reuters)
  7. 7. Page 7 of 9  Saudi Arabia announces $4.4bn of construction and housing deals – Saudi Arabia’s government has signed deals worth $4.4bn to develop its housing and construction sectors, the state investment promotion agency stated. The deals, reached on the sidelines of a major business conference in Riyadh, include an agreement by US based construction company Katerra to help a Saudi Arabian housing aid program to use modern building methods. China’s PowerChina International Group signed a $2.7bn memorandum with the Saudi Ministry of Housing to build 17,000 homes over the next six years, the investment agency stated. A Saudi-Chinese partnership named Sany has also agreed to cooperate with the government in real estate development. (Reuters)  Saudi Arabia still moves ahead with three major development projects – Saudi Arabia is still moving ahead with three major development projects, NEOM, the Red Sea tourism project, and an entertainment development that will include a Six Flags theme park. The global outrage over the killing of journalist Jamal Khashoggi has prompted some Western companies to put partnerships on hold, or hold off from taking funds from Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), which is chaired by Crown Prince Mohammed bin Salman. British billionaire Richard Branson earlier this month said he would suspend his directorship in two Saudi tourism projects around the Red Sea, citing Khashoggi’s disappearance. Saudi Arabia’s mega business zone called NEOM is still proceeding with prospective partners, despite the fallout over Khashoggi, NEOM’s CEO, Nadhmi al-Nasr said. (Reuters)  Russian sovereign wealth fund attracts Saudi Arabian partner to its fund with China – Russian sovereign wealth fund RDIF stated that Saudi Arabia’s sovereign wealth fund Public Investment Fund (PIF) would become a new partner in the joint Russia-China Investment Fund. As part of the agreement, Saudi Arabia’s PIF will contribute $500mn to the investment fund, raising its total capital under management to $2.5bn, Russia’s RDIF stated. (Reuters)  Norway’s fund plans to more than double investments in Saudi Arabia – Norway’s sovereign wealth fund, the world’s largest, plans to more than double its investments in Saudi Arabia after it is included in the fund’s reference index soon, CEO Yngve Slyngstad said. The fund currently has Saudi Arabian assets worth $825mn spread over 42 companies including banks, petrochemicals and healthcare firms. The fund’s reference index, the FTSE, will include Saudi Arabia in the coming year. “We invest in companies, not countries. Our investments in companies based in Saudi Arabia will not be changed based on political developments,” Slyngstad told Reuters. (Reuters)  Dutch-Saudi December Trade Mission will not take place – A government trade mission to Saudi Arabia in December has been cancelled amid questions about the death of Jamal Khashoggi, Netherland’s Prime Minister, Mark Rutte said. “We believe there needs to be full clarity about what happened to him. We have decided that our finance minister, Wopke Hoekstra, will not take part in the future investment initiative in Riyadh and also the planned trade mission in December at the governmental level will not take place. There needs to be clarity and also justice on the total issue.” (Bloomberg)  Saudi Arabia says oil market could shift to oversupply in 4Q2018 – Saudi Arabia stated that the oil market could be shifting towards oversupply in 4Q2018 as oil inventories rise and demand slows, and the top oil exporter will mirror such changes in its production. “We are of the view that the market in 4Q2018 could be shifting towards an oversupply situation as evidenced by rising inventories over the past few weeks,” Saudi Arabia’s OPEC Governor, Adeeb Al-Aama said. “So we want to be watchful not to over-correct and cause a substantial inventory build,” Al-Aama, who heads a joint OPEC and non- OPEC committee which monitors compliance and market fundamentals, said after a recent meeting of the panel, known as the JTC, in Vienna. (Reuters)  Saudi Arabia's Energy Minister says market intervention may be needed to cut oil stockpiles – Saudi Arabia’s Energy Minister, Khalid Al-Falih believes there could be a need for intervention to reduce oil stockpiles after increases in recent months, he said to state TV. “We have entered the stage of worrying about this increase,” Al-Falih told state broadcaster Al-Ekhbariya. He added that intervention might be required to return to the stability reached after tireless efforts during the past year and a half. (Reuters)  Finance Minister: Saudi Arabia aims for balanced budget over time – Saudi Arabia aims to achieve a balanced budget over time, including occasional surpluses or deficits depending on economic conditions, its Finance Minister said. He said, “Deficit is okay when it is controlled and surplus is okay if we are at a good time, particularly in a country depending on a commodity that is subject to volatility.” (Reuters)  New York City’s pension fund leader asks index providers to reconsider Saudi Arabia – Top financial market index providers should reconsider their recent decisions to add Saudi Arabia to emerging markets products, New York City’s (NYC) Chief pension fund official said, citing ‘disturbing allegations’ about the Kingdom after the killing of journalist Jamal Khashoggi. In letters to three major index providers sent and seen by Reuters, New York City Comptroller Scott Stringer wrote he was concerned that keeping the country in the indexes would expose his funds and others to unsuitable investments. (Reuters)  Saudi Arabia says companies apologized for missing investment conference – Saudi Arabia’s Energy Minister, Khalid Al-Falih said that companies that pulled out of the Future Investment Initiative conference in Riyadh had apologized for missing the event. “All the companies which did not come have been calling us during the past 48 hours, apologizing, expressing their regret, and promising to apply to open offices in the country during the coming weeks and restore relationships to their norms,” Al-Falih told state TV al- Ekhbariya. (Reuters)  Saudi Arabia now says Khashoggi murder 'premeditated' – Saudi Arabia’s public prosecutor said that the murder of journalist Jamal Khashoggi in the Kingdom’s Istanbul consulate this month was premeditated, reversing previous official statements that the killing was unintended. The death of Khashoggi, a Washington Post columnist and critic of de facto Saudi Arabia’s ruler Crown Prince, Mohammed bin Salman, has sparked global outrage and mushroomed into a crisis for the
  8. 8. Page 8 of 9 world’s top oil exporter and strategic ally of the West. Saudi Arabia’s disclosure came after CIA director Gina Haspel heard an audio recording of the killing during a fact-finding visit to Turkey last week. (Reuters)  Saudi Arabia’s investor forum saved by old mainstay oil – Saudi Arabia’s investment forum was designed to showcase the Kingdom’s new future away from oil, but it was black gold and old allies that rescued last week’s event from the furor over the killing of journalist Jamal Khashoggi. Riyadh inked multi-billion Dollar agreements, mainly energy deals, despite a boycott of the event by dozens of high-level Western politicians, bankers and top executives scheduled to speak at the three-day gathering. Yet the event paled in comparison to the 2017 inaugural investment conference, when robots roamed the venue as the Kingdom turned its focus to the promise of new technology and announced plans to build a $500bn mega city of the future. Crown Prince Mohammed bin Salman told Bloomberg earlier this month that Riyadh would announce an amazing deal at the Future Investment Initiative (FII) forum this year, vowing big numbers in a sector far away from oil. However, when the final session ended, no such announcement had been made. (Reuters)  Mubadala to repurchase RegS notes due 2021 and 2022 – BNP Paribas will offer to buy back Mubadala’s $750mn of 5.5% notes due 2021 (RegS tranche only) at 105.25% of face value. Further, Mubadala will offer to buy back $750mn of 3.25% notes due 2022 (RegS tranche only) at 99.25% of face value. Accrued interest on all notes accepted for purchase will be paid on the settlement date. BNP Paribas intends to exchange any 2021 notes purchased in offer for new notes. MDC–GMTN intends to cancel any 2022 notes purchased in offer and any 2021 notes received from BNP Paribas in exchange for new notes. The offer follows the merger of Mubadala and International Petroleum Investment Company and is part of Mubadala’s overall debt strategy. Mubadala seeks to manage maturity profile of existing debt by extending maturity profile through the issuance of new notes and the repurchase of 2021, 2022 notes. (Bloomberg)  Kuwait signs agreement with Sinopec to build Chinese refinery – Kuwait has signed a Memorandum of Understanding (MoU) with Chinese oil major Sinopec to build a refinery in the south of China, the Kuwait Oil Ministry stated. (Reuters)  Oman to host Gas and LNG Middle East summit – The Sultanate of Oman will host Gas and the LNG Middle East Conference in its first two day edition, discussing the challenges facing the sector and how to overcome them. The summit will be attended by many senior level executives and gas experts from the global gas industry. The conference provides an opportunity for officials, decision-makers and specialists in the gas & LNG sectors to share knowledge raise awareness and discuss the strategic options and solutions offered by natural gas suppliers and service providers in terms of sustainability of energy availability & its pivotal role in social & economic development. (Peninsula Qatar)
  9. 9. Contacts Saugata Sarkar, CFA, CAIA Shahan Keushgerian Zaid al-Nafoosi, CMT, CFTe Head of Research Senior Research Analyst Senior Research Analyst Tel: (+974) 4476 6534 Tel: (+974) 4476 6509 Tel: (+974) 4476 6535 saugata.sarkar@qnbfs.com.qa shahan.keushgerian@qnbfs.com.qa zaid.alnafoosi@qnbfs.com.qa QNB Financial Services Co. W.L.L. Contact Center: (+974) 4476 6666 PO Box 24025 Doha, Qatar Disclaimer and Copyright Notice: This publication has been prepared by QNB Financial Services Co. W.L.L. (“QNBFS”) a wholly-owned subsidiary of Qatar National Bank (Q.P.S.C.). QNBFS is regulated by the Qatar Financial Markets Authority and the Qatar Exchange. Qatar National Bank (Q.P.S.C.) 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. QNBFS accepts no liability whatsoever for any direct or indirect losses arising from use of this report. Any investment decision should depend on the individual circumstances of the investor and be based on specifically engaged investment 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. 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. For reports dealing with Technical Analysis, expressed opinions and/or recommendations may be different or contrary to the opinions/recommendations of QNBFS Fundamental Research as a result of depending solely on the historical technical data (price and volume). 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. This report may not be reproduced in whole or in part without permission from QNBFS. COPYRIGHT: No part of this document may be reproduced without the explicit written permission of QNBFS. Page 9 of 9 Rebased Performance Daily Index Performance Source: Bloomberg Source: Bloomberg Source: Bloomberg Source: Bloomberg (*$ adjusted returns) 45.0 70.0 95.0 120.0 Aug-14 Aug-15 Aug-16 Aug-17 Aug-18 QSEIndex S&PPanArab S&PGCC 4.3% 0.0% (0.4%) (0.1%) (0.2%) (0.9%) (0.1%)(1.5%) 0.0% 1.5% 3.0% 4.5% SaudiArabia Qatar Kuwait Bahrain Oman AbuDhabi Dubai Asset/Currency Performance Close ($) 1D% WTD% YTD% Global Indices Performance Close 1D%* WTD%* YTD%* Gold/Ounce 1,233.13 0.1 0.5 (5.4) MSCI World Index 1,981.89 (1.2) (3.9) (5.8) Silver/Ounce 14.69 0.3 0.8 (13.3) DJ Industrial 24,688.31 (1.2) (3.0) (0.1) Crude Oil (Brent)/Barrel (FM Future) 77.62 0.9 (2.7) 16.1 S&P 500 2,658.69 (1.7) (3.9) (0.6) Crude Oil (WTI)/Barrel (FM Future) 67.59 0.4 (2.2) 11.9 NASDAQ 100 7,167.21 (2.1) (3.8) 3.8 Natural Gas (Henry Hub)/MMBtu 3.27 (3.3) 1.6 (7.6) STOXX 600 352.34 (0.6) (3.5) (14.2) LPG Propane (Arab Gulf)/Ton 86.00 (0.3) (8.0) (12.0) DAX 11,200.62 (0.7) (4.1) (17.8) LPG Butane (Arab Gulf)/Ton 91.25 (0.7) (12.8) (13.6) FTSE 100 6,939.56 (0.9) (3.4) (14.4) Euro 1.14 0.2 (1.0) (5.0) CAC 40 4,967.37 (1.1) (3.4) (11.4) Yen 111.91 (0.5) (0.6) (0.7) Nikkei 21,184.60 0.2 (5.6) (6.4) GBP 1.28 0.1 (1.9) (5.1) MSCI EM 939.55 (1.0) (3.3) (18.9) CHF 1.00 0.2 (0.1) (2.3) SHANGHAI SE Composite 2,598.85 (0.1) 1.7 (26.4) AUD 0.71 0.1 (0.4) (9.2) HANG SENG 24,717.63 (1.1) (3.3) (17.7) USD Index 96.36 (0.3) 0.7 4.6 BSE SENSEX 33,349.31 (0.9) (2.4) (14.5) RUB 65.71 0.2 0.3 14.0 Bovespa 85,719.87 2.4 2.9 1.0 BRL 0.27 1.7 1.9 (9.1) RTS 1,098.31 (2.0) (2.5) (4.9) 76.0 74.1 73.4

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