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QNBFS Daily Market Report November 8, 2018

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The QSE Index declined 1.2% to close at 10,252.5

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QNBFS Daily Market Report November 8, 2018

  1. 1. Page 1 of 7 QSE Intra-Day Movement Qatar Commentary The QSE Index declined 1.2% to close at 10,252.5. Losses were led by the Banks & Financial Services and Real Estate indices, falling 2.5% and 0.9%, respectively. Top losers were Qatar Islamic Bank and QNB Group, falling 4.4% and 3.3%, respectively. Among the top gainers, Qatar Cinema & Film Distribution Company gained 9.9%, while Qatari German Company for Medical Devices was up 2.7%. GCC Commentary Saudi Arabia: The TASI Index fell 0.3% to close at 7,792.6. Losses were led by the Food & Beverages and Media & Ent. indices, falling 3.9% and 1.8%, respectively. Savola Group declined 9.9%, while Al-Baha Investment and Dev. was down 4.2%. Dubai: The DFM General Index gained 0.5% to close at 2,829.2. The Consumer Staples and Dis. index rose 2.3%, while the Transportation index gained 1.4%. Gulfa Mineral Water. rose 14.8%, while International Financial Advisors was up 13.8%. Abu Dhabi: The ADX General Index rose 0.2% to close at 5,016.1. The Consumer Staples index gained 1.8%, while the Telecommunication index rose 0.5%. Ras Al Khaimah Cement Company gained 9.7%, while Al Qudra Holding was up 8.9%. Kuwait: The Kuwait Main Market Index rose 1.0% to close at 4,719.2. The Telecom. index gained 2.0%, while Financial Services index rose 1.2%. Al-Deera Holding Co. gained 45.5%, while International Financial Advisers was up 22.7%. Oman: The MSM 30 Index rose 0.6% to close at 4,446.1. Gains were led by the Financial and Industrial indices, rising 0.7% and 0.5%, respectively. Raysut Cement rose 4.1%, while Al Madina Investment was up 2.6%. Bahrain: The BHB Index gained 0.2% to close at 1,316.3. The Hotels & Tourism index rose 4.3%, while the Commercial Banks index gained 0.2%. Gulf Hotel Group rose 6.5%, while National Bank of Bahrain was up 1.7%. QSE Top Gainers Close* 1D% Vol. ‘000 YTD% Qatar Cinema & Film Distribution 16.52 9.9 1.3 (33.9) Qatari German Co for Med. Devices 4.59 2.7 16.3 (28.9) The Commercial Bank 41.85 1.2 190.6 44.8 Qatar Electricity & Water Co. 183.99 0.9 23.3 3.4 Gulf International Services 18.50 0.8 188.6 4.5 QSE Top Volume Trades Close* 1D% Vol. ‘000 YTD% Qatar First Bank 4.27 0.0 901.8 (34.6) Barwa Real Estate Company 38.47 (0.1) 550.5 20.2 Vodafone Qatar 8.01 (0.7) 419.7 (0.1) Masraf Al Rayan 38.35 (0.1) 292.1 1.6 Qatar Gas Transport Company Ltd. 17.90 (0.3) 281.7 11.2 Market Indicators 07 Nov 18 06 Nov 18 %Chg. Value Traded (QR mn) 173.2 203.7 (15.0) Exch. Market Cap. (QR mn) 572,959.3 582,220.9 (1.6) Volume (mn) 5.0 6.4 (22.4) Number of Transactions 3,731 4,231 (11.8) Companies Traded 43 42 2.4 Market Breadth 10:28 21:15 – Market Indices Close 1D% WTD% YTD% TTM P/E Total Return 18,063.77 (1.2) (0.3) 26.4 15.2 All Share Index 3,017.82 (1.4) (0.6) 23.1 15.3 Banks 3,694.90 (2.5) (2.1) 37.8 13.9 Industrials 3,344.55 (0.4) (0.1) 27.7 15.9 Transportation 2,106.93 (0.0) (0.1) 19.2 12.2 Real Estate 1,964.26 (0.9) 2.3 2.5 17.7 Insurance 3,046.15 (0.3) (1.1) (12.5) 18.1 Telecoms 979.60 (0.8) 2.6 (10.8) 39.7 Consumer 7,031.65 (0.6) 0.8 41.7 14.4 Al Rayan Islamic Index 3,900.36 (0.8) 0.2 14.0 15.3 GCC Top Gainers ## Exchange Close # 1D% Vol. ‘000 YTD% Com. Bank of Kuwait Kuwait 0.50 10.9 82.5 37.5 Raysut Cement Oman 0.41 4.1 57.7 (47.9) Southern Prov. Cement Saudi Arabia 37.40 3.2 462.4 (22.7) National Mobile Telecom. Kuwait 0.74 2.6 14.9 (31.1) VIVA Kuwait Telecom Co. Kuwait 0.75 2.5 92.6 (6.1) GCC Top Losers ## Exchange Close # 1D% Vol. ‘000 YTD% Savola Group Saudi Arabia 28.20 (9.9) 4,078.6 (28.6) Qatar Islamic Bank Qatar 150.00 (4.4) 103.1 54.6 QNB Group Qatar 186.16 (3.3) 152.2 47.7 Al Tayyar Travel Group Saudi Arabia 20.94 (2.0) 1,861.1 (22.5) GFH Financial Group Dubai 1.25 (1.6) 19,199.6 (16.7) 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 Islamic Bank 150.00 (4.4) 103.1 54.6 QNB Group 186.16 (3.3) 152.2 47.7 Islamic Holding Group 24.12 (2.3) 8.1 (35.7) Al Khalij Commercial Bank 11.15 (2.2) 1.0 (21.5) Alijarah Holding 8.70 (1.7) 13.9 (18.8) QSE Top Value Trades Close* 1D% Val. ‘000 YTD% QNB Group 186.16 (3.3) 28,756.5 47.7 Industries Qatar 140.00 (0.7) 24,793.0 44.3 Barwa Real Estate Company 38.47 (0.1) 21,236.8 20.2 Qatar Islamic Bank 150.00 (4.4) 15,621.3 54.6 Masraf Al Rayan 38.35 (0.1) 11,178.9 1.6 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* 10,252.50 (1.2) (0.3) (0.5) 20.3 47.47 157,391.9 15.2 1.5 4.3 Dubai 2,829.23 0.5 0.9 1.6 (16.0) 73.59 100,473.5 7.6 1.0 6.2 Abu Dhabi 5,016.07 0.2 1.9 2.3 14.0 50.98 136,700.2 13.3 1.5 4.8 Saudi Arabia 7,792.56 (0.3) (1.1) (1.4) 7.8 880.11 492,529.4 16.6 1.7 3.6 Kuwait 4,719.23 1.0 0.0 0.5 (2.3) 64.33 32,299.0 15.6 0.9 4.4 Oman 4,446.06 0.6 0.5 0.5 (12.8) 11.03 19,197.9 10.4 0.8 5.9 Bahrain 1,316.27 0.2 0.2 0.1 (1.2) 10.20 20,369.9 8.9 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) 10,200 10,250 10,300 10,350 10,400 10,450 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 QSE Index declined 1.2% to close at 10,252.5. The Banks & Financial Services and Real Estate indices led the losses. The index fell on the back of selling pressure from Qatari and GCC shareholders despite buying support from non-Qatari shareholders.  Qatar Islamic Bank and QNB Group were the top losers, falling 4.4% and 3.3%, respectively. Among the top gainers, Qatar Cinema & Film Distribution Company gained 9.9%, while Qatari German Company for Medical Devices was up 2.7%.  Volume of shares traded on Wednesday fell by 22.4% to 5.0mn from 6.4mn on Tuesday. Further, as compared to the 30-day moving average of 5.6mn, volume for the day was 11.9% lower. Qatar First Bank and Barwa Real Estate Company were the most active stocks, contributing 18.2% and 11.1% to the total volume, respectively. Source: Qatar Stock Exchange (* as a % of traded value) Earnings Releases and Global Economic Data Earnings Releases Company Market Currency Revenue (mn) 3Q2018 % Change YoY Operating Profit (mn) 3Q2018 % Change YoY Net Profit (mn) 3Q2018 % Change YoY Altayyar Travel Group Saudi Arabia SR 492.0 0.6% 123.0 -30.9% -355.0 N/A Hail Cement Co. Saudi Arabia SR 41.0 11.1% -15.9 N/A -18.3 N/A The Agricultural Development Company Saudi Arabia SR 574.7 12.5% 54.5 124.0% 35.1 102.7% Ash-Sharqiyah Development Co. Saudi Arabia SR – – -2.2 N/A -2.3 N/A Saudi Airlines Catering Co. Saudi Arabia SR 627.7 4.2% 154.0 9.1% 142.6 9.4% Fitaihi Holding Group Saudi Arabia SR 20.0 3.5% -4.5 N/A -0.2 N/A Al-Babtain Power and Telecommunication Co. Saudi Arabia SR 269.0 -18.4% 15.5 -62.3% 9.2 -69.3% Alandalus Property Co. Saudi Arabia SR 40.5 4.3% 23.8 -16.4% 12.6 -52.2% Al Sorayai Trading and Industrial Group Saudi Arabia SR 80.9 -20.3% -9.4 N/A -16.7 N/A Halwani Bros. Co. Saudi Arabia SR 223.4 0.6% 29.7 3.1% 19.2 2.1% Tabuk Cement Co. Saudi Arabia SR 25.9 -9.1% -13.3 N/A -19.2 N/A National Gas and Industrialization Co. Saudi Arabia SR 447.7 -2.7% 17.0 -43.6% 35.6 -8.2% Saudi Arabia Refineries Co. Saudi Arabia SR 7.4 2382.4% 6.9 N/A 6.9 N/A Aseer Trading, Tourism and Manufacturing Co. Saudi Arabia SR 484.0 -3.8% 29.5 -23.6% -4.5 N/A Anaam International Holding Group Saudi Arabia SR 15.9 1.7% -3.0 N/A -2.8 N/A Alliance Insurance Dubai AED 66.9 17.3% – – 14.2 9.1% Amanat Holdings Dubai AED 11.5 -48.0% – – -3.6 N/A Orient UNB Takaful Dubai AED – – – – -1.8 N/A Arabtec Holding Dubai AED 2,340.4 11.5% – – 67.5 278.1% Arab Insurance Group Bahrain USD 52.4 96.1% – – 0.3 N/A Bahrain Cinema Company Bahrain BHD 2.5 -7.3% – – 1.0 -29.1% Bahrain Duty Free Complex Bahrain BHD 9.7 15.4% 1.6 7.5% 2.1 -8.6% Zain Bahrain Bahrain BHD 16.0 -8.6% 1.3 -5.7% 1.4 0.4% Trafco Group Bahrain BHD 9.6 -3.4% 0.6 22.7% 0.4 76.9% Source: Company data, DFM, ADX, MSM, TASI, BHB. (*Financials for 9M2018) Global Economic Data Date Market Source Indicator Period Actual Consensus Previous 11/07 US Mortgage Bankers Association MBA Mortgage Applications 2-November -4.0% – -2.5% 11/07 Germany Deutsche Bundesbank Industrial Production SA MoM September 0.2% 0.0% 0.1% 11/07 Germany Bundesministerium fur Wirtscha Industrial Production WDA YoY September 0.8% 0.5% 0.2% 11/07 China National Bureau of Statistics Foreign Reserves October $3,053.10bn $3,058.50bn $3,087.03bn Source: Bloomberg (s.a. = seasonally adjusted; n.s.a. = non-seasonally adjusted; w.d.a. = working day adjusted) Overall Activity Buy %* Sell %* Net (QR) Qatari Individuals 20.97% 37.92% (29,374,029.78) Qatari Institutions 9.38% 11.90% (4,374,980.47) Qatari 30.35% 49.82% (33,749,010.25) GCC Individuals 0.64% 0.95% (545,218.72) GCC Institutions 0.25% 2.11% (3,226,238.55) GCC 0.89% 3.06% (3,771,457.27) Non-Qatari Individuals 9.65% 7.97% 2,926,078.65 Non-Qatari Institutions 59.12% 39.15% 34,594,388.87 Non-Qatari 68.77% 47.12% 37,520,467.52
  3. 3. Page 3 of 7 News Qatar  Mannai Corporation offers EUR10.5 per share for the remaining shares of GFI Informatique – Mannai Corporation has offered to buy what it does not own in GFI Informatique at EUR10.5 per share, with a view to delist the group. Mannai Corporation currently owns 96.6% of shares and voting rights in GFI Informatique. (Bloomberg)  DTZ Qatar: Qatar’s residential rents remained relatively stable in the last three months – Residential rents have remained relatively stable in Qatar over the past three months after two years of decline, consultancy and research firm DTZ Qatar stated in a report. Overall, rental trends have declined by approximately 10% to 15% in the past year alone, as supply increases. DTZ Qatar stated it has seen an increase in leasing activity in 3Q2018; however, the vast majority of new lettings are to existing residents of Qatar looking for reduced rents, rather than incoming residents. The relative lack of new demand currently being generated means that oversupply continues to grow as new developments complete. Asking rents for vacant apartments in areas such as Al Sadd, Bin Mahmoud Al Mirqab and Bin Omran have fallen by up to 20% since 2016, although a number of new high-quality developments with high specification finishing still command relatively strong rents in these areas. Lower rents have also encouraged residents to seek higher quality accommodation than may have previously been deemed affordable. The large pipeline of new prime apartment developments in neighborhoods such as Pearl- Qatar and Lusail is likely to put further downward pressure on rents unless significant new demand is created. (Gulf- Times.com)  DTZ Qatar: Three-star hotels best-performing category in Qatar’s hospitality market in 1H2018 – Three-star hotels were the best performing category in Qatar’s hospitality market in 1H2018. Occupancy rates at Qatar’s three-star hotels rose to 69% in 1H2018, compared to 60% in the same period last year, according to DTZ Qatar. Visitor numbers to Qatar fell by 35% in 1H2018, due to the ongoing-blockade, it stated. While arrivals from other international regions have increased, a fall of 84% in the GCC traffic has provided a previously unseen challenge to the hospitality sector in Qatar. “Despite the impact of the blockade, efforts to boost tourism in Qatar have been making inroads in other regions, notably in Asia, which has seen an increase of more than 350,000 visitors in the first six months of the year,” DTZ Qatar noted. This included a growth of 18% from India, one of Qatar’s principal target markets. According to Qatar Tourism Authority (QTA), the total supply of hotel keys increased to 25,828 in July 2018, an increase of 883 over the first six months of the year. This represents a 6% jump in supply. (Gulf-Times.com)  Excelerate Energy opens new office in Qatar to tap growing opportunities – Aiming to tap growing business opportunities as Qatar is set to expand gas production capacity, Excelerate Energy (Excelerate), the market leader in floating liquefied natural gas (LNG) regasification solutions, marked the opening of its new office in Qatar. The new office was registered and is operated under the administration of Qatar Financial Center. Excelerate’s Managing Director, Steven Kobos said, “The opening of our Doha office demonstrates Excelerate’s long-term commitment to the LNG industry, given that Qatar is the largest exporter of LNG globally. This strategic location will allow us to better serve our partners and support their efforts in expanding Qatar’s LNG export capacity to emerging markets worldwide.” In June of this year, Excelerate and Nakilat entered into an agreement for a joint-venture company, with Nakilat acquiring 55% interest in Excelerate’s floating storage regasification unit (FSRU), ‘Exquisite’, the first such vessel to join Nakilat’s fleet. (Peninsula Qatar)  Katara Hospitality buys Grosvenor House hotel in London – Katara Hospitality is expanding its global portfolio with the acquisition of JW Marriott Grosvenor House, a historic hotel on the famed Park Lane in London's Mayfair district, reflecting trust in the UK market as part of Qatar’s £5bn investment plan. The acquisition brings Katara Hospitality’s portfolio of properties in operation or under development to 40 and marks the company’s third acquisition in London after The Savoy, A Fairmont Managed Hotel and the Adria Boutique Hotel. The announcement further builds on Katara Hospitality’s vision for iconic properties in strategic markets to commit significant investment over the long term. (Gulf-Times.com)  Ooredoo, Msheireb Properties partner to provide fiber infrastructure in Msheireb Downtown Doha – Ooredoo announced its partnership with Msheireb Properties to provide fiber infrastructure to its flagship development, Msheireb Downtown Doha, the world’s first sustainable downtown regeneration project. Ooredoo’s COO, Yousuf Abdulla al-Kubaisi said, “Ooredoo is providing its world-class fiber infrastructure to strengthen the smart city offering of Msheireb Downtown Doha, one of the smartest city districts in the world.” (Gulf- Times.com)  China now Qatar’s third-largest trading partner, says top MCI official – HE the Undersecretary at the Ministry of Commerce and Industry, Sultan bin Rashid al-Khater chaired the Qatar- China Economic Forum in Shanghai. China ranks as Qatar’s third-largest trading partner, with $10.6bn worth of traded goods in 2017, accounting for 10.92% of the country’s total trade volume, al-Khater said. These are mainly related to the promotion and protection of mutual investments, the development of joint investments and several other memoranda of understanding in the areas of research, health, cultural and education fields, as well as maritime, air and land shipping. (Gulf-Times.com) International  US mortgage applications hit four-year low as rates rise – US borrowers filed the fewest applications to buy a home and to refinance one in nearly four years last week as some 30-year mortgage rates increased to their highest levels in about 8-1/2 years, the Mortgage Bankers Association stated. The Washington-based industry group’s seasonally adjusted gauge on mortgage requests, which is seen as a proxy on future housing activity, fell 4.0% to 316.2 in the week ended November 2. This was the weakest reading since December 2014. Home borrowing costs rose last week in step with higher bond yields due to upbeat payrolls data last month which
  4. 4. Page 4 of 7 showed wages recording their largest annual gain in 9-1/2 years. (Reuters)  Eurozone’s retail sales stronger than expected YoY in September – Eurozone’s retail sales rose more than expected YoY in September and August data was also revised upwards, signaling continued consumer demand, especially in online shopping, despite slowing economic growth. The European Union’s statistics office, Eurostat stated retail sales in the 19 countries sharing the Euro were flat MoM for 0.8% YoY gain. Economists polled by Reuters had expected 0.1% monthly rise and 0.7% annual increase. Eurostat also revised strongly upwards the August data to 0.3% MoM rise from 0.2% monthly fall and to a 2.2% YoY gain from 1.8% increase. (Reuters)  Japan’s machinery orders hit by worst-ever slump in September – Japan’s core machinery orders tumbled by the most on record in September after a severe earthquake and typhoons disrupted business activity, with economists now also worried about a fall in overseas orders. The 18.3% slump in machinery orders far outpaced the median market estimate for 10.0% decline and follows a 6.8% increase in August. September’s 12.5% decline in overseas machinery orders, the biggest such fall in more than two years, could signal sustained weakness in export demand. Japan’s economy is forecast to contract in July-September, and the machinery orders slump suggests any rebound in the following quarters is likely to be weak if exports and business investment lose momentum. Manufacturers surveyed by the government expect core machinery orders to rise 3.6% in October-December after 0.9% increase in July-September, but some economists worry this forecast is overly optimistic. (Reuters)  Japan manufacturers' mood sours amid trade war fears – Japanese manufacturers’ business confidence worsened in November and was expected to deteriorate further, the Reuters Tankan poll showed, reflecting apprehension over the risks of a full-blown trade war between the US and China. The monthly poll, which tracks the Bank of Japan’s closely watched tankan quarterly survey, found the mood among manufacturers was expected to deteriorate further during the coming three months, though the mood in the service sector rebounded from a near two-year low. The sentiment index for manufacturers stood at 26, down two points from the previous month, dragged lower by precision machinery and chemicals makers, according to the survey conducted from October 24 to November 5. The index was seen falling further to 24 in February. (Reuters)  China’s October foreign exchange reserves drop to 18-month low as pressure on Yuan grows – China’s foreign exchange reserves fell more than expected to an 18-month low in October amid rising US trade frictions, suggesting authorities may be slowly stepping up interventions to keep the Yuan from breaking through a key support level. Reserves fell by $33.93bn in October to $3.053tn, central bank’s data showed. The drop was the biggest monthly decline since December 2016, and compared with a fall of $22.69bn in September. Economists polled by Reuters had expected reserves to drop $27bn to $3.06tn. China’s foreign exchange regulator attributed the fall to adjustments in global asset prices and currency valuation effects caused by 2.1% rise in the Dollar index. Net foreign exchange sales by China’s commercial banks are likely to be around $3bn in October, a drop of over 80% from September, according to State Administration of Foreign Exchange. (Reuters) Regional  S&P: Gulf countries need to raise $300bn by 2021 – The Gulf Cooperation Council (GCC) countries will need to raise about $300bn between 2018 and 2021, with Saudi Arabia having the largest financing requirements, according to rating agency Standard & Poor’s (S&P). Gulf states have increasingly relied on external financing after a slump in oil prices created large budget deficits and prompted the introduction of sweeping economic reforms over the past few years. Saudi Arabia has become the region’s most prominent issuer of international debt, having borrowed $52bn through a combination of conventional and Islamic international bonds since its debut in the international markets in late 2016. On an average, S&P expects 70% of the $300bn of combined funding needs to be raised through debt and the remaining 30% to be drawn on assets. Qatar and Bahrain are expected to fill their funding needs almost exclusively through debt while Kuwait and Abu Dhabi will rely more on assets. Higher oil prices this year and a series of government initiatives aimed at diversifying the region’s economies from oil revenues have improved budget deficits and have slowed the pace at which Gulf sovereigns accumulated debt in 2018. S&P estimates the GCC’s sovereign combined central government deficit to be around $75bn next year, down from $190bn in 2016. “Nevertheless, GCC governments’ net debt positions have significantly deteriorated since oil prices fell in 2015 and debt-servicing costs now account for a much larger proportion of fiscal revenue,” the agency stated. S&P forecasts that the GCC central governments will remain in deficit until 2021. (Reuters)  GCC officials ponder raising steel import tariffs – The Gulf Cooperation Council’s (GCC) finance undersecretaries primarily discussed raising steel import tariffs and selective tax. Reports on increasing these tariffs, expanding the scope of selectively taxed products and amending the minimum selective fees on tobacco products were among the topics raised at the talks. (GulfBase.com)  OPEC sources: Return to oil production cuts in 2019 cannot be ruled out – A return to oil production cuts by OPEC and its allies next year cannot be ruled out, two OPEC sources said, to avert a possible supply glut that could weigh on prices. The sources were responding to a report by Russia’s TASS news agency that Russia and Saudi Arabia had started bilateral discussions over possible curbs to output in 2019. (Reuters)  SAMA: Inflation in Saudi Arabia to rise in 4Q2018 – Saudi Arabian Monetary Authority (SAMA) has issued inflation report for third quarter. Annual inflation is expected to rise in 4Q2018 as economic reforms and decisions made in 2018 will continue to have an effect. In addition, the decision to restore employee benefits will influence the nature of local consumption as their incomes are expected to rise in the short- term. The inflation in 3Q2018 was +2.2% YoY; -0.2% QoQ. (Bloomberg)  Saudi Airlines Catering Company announces the distribution of cash dividend for 3Q2018 – Saudi Airlines Catering Company’s board of directors approved the distribution of SR1.5 dividend
  5. 5. Page 5 of 7 per share for 3Q2018. The total amount of dividend distributed was SR123mn. The eligibility of dividends shall be for the shareholders who own shares on maturity date (December 20, 2018), and are registered with the Securities Depository Center Company (Depository Center) at the end of the second trading day. (Tadawul)  PetroChina agrees 2019 annual crude supply deals with Saudi Aramco and Kuwait Petroleum Corp – Chinese oil major PetroChina inked 2019 annual crude supply deals with state- owned producers Saudi Aramco and Kuwait Petroleum Corp. at a public signing ceremony during the China International Import Expo in Shanghai. Volumes covered by the supply contracts weren’t made public, but sources said that Saudi Aramco would supply the same volume as in 2018. Kuwait volumes were expected to be steady with this year’s level, two sources added, while a third source expected a slight increase in volumes. (Reuters)  Bahri: Targeting acquisitions in Asia and the Middle East – Saudi Arabian oil shipper Bahri is targeting multiple acquisitions in Asia and the Middle East worth tens of millions of Dollars as it seeks to expand its footprint, Reuters reported. “We want to tap into a new area related to the maritime sector by acquiring companies offering services that are not currently available within Bahri’s portfolio,” CEO Abdullah Aldubaikhi told Reuters. He also said that the company sought to buy a listed Asian firm in deal that will likely close in 3Q2019. Bahri will finance acquisitions from its own funds and banking finance; it plans to add more 15 very large crude carriers to its fleet through a $1.5bn investment fund. APICORP Bahri Oil Shipping Fund will raise $1.5bn in three stages raising $500mn each time; APICORP will contribute 85% of the funds and Bahri the rest. First $500mn phase would be raised in 1Q2019 and the second tranche will likely be completed in the second quarter of 2020, Aldubaikhi said. He said that the shipping industry has bottomed out in 2018; “the cycle of the shipping industry in 2019 will improve, and the years 2020 and 2021 will be the golden years for this industry,” he said. (Bloomberg)  Saudi Almarai looking to buy Greenland Group for $75mn – Saudi Almarai is looking to buy Greenland Group for $75mn and it has also begun the due diligence on Greenland, which is owned by Americana Group, a Cairo-based daily reported. Greenland has hired Sharkawy and Sarhan as legal advisers while Baker & McKenzie are advisers for the buyer. (Bloomberg)  UAE main destination of FDI in MENA – The UAE remained the main destination of Foreign Direct Investment (FDI) in the MENA region last year. The UAE saw FDI inflows of approximately $11bn, accounting for 22% of total FDI to the region in 2017. “The UAE’s comprehensive business ecosystem and political stability continue to position the country as one of the most preferred investment destinations in the world”, revealed Ahmed Al Sayegh, UAE Minister of State and Chairman of Abu Dhabi Global Market (ADGM), during the opening of 2018 IIF MENA Financial Summit in Abu Dhabi. (GulfBase.com)  UAE government deposits hit record AED286bn in 9 months – Government deposits in the UAE-based banks hit an all-time- high of AED286bn by the end of September 2018, up AED74bn in the first nine months of the year, a media report stated. The growth is attributed to rising oil prices, which grew by 35% during the past 12 months, reflecting positively on the total assets of the banking sector, reported state news agency Wam, citing CBUAE (Central Bank of the UAE) statistics. Government fiscal surpluses since the beginning of the year amounted to AED186bn, according to the Ministry of Finance statistics. Government deposits increased by AED21.2bn during 1Q2018, a growth of 10% as compared to the end of 2017, and by AED17.4bn during 2Q2018, setting a record rise of AED35.4bn by the end of 3Q2018 to AED286bn. Government deposits increased by AED14.2bn during the first nine months of 2017. (GulfBase.com)  UAE’s NMC Health prepares Dollar Sukuk – The UAE’s healthcare provider NMC Health plans to issue US Dollar- denominated Sukuk, a document issued by one of the banks leading the deal showed. London-listed NMC has hired HSBC and Standard Chartered Bank to coordinate a series of meetings with fixed income investors ahead of the planned deal, which will be a five-year benchmark bond. Benchmark issues are generally meant to be worth upwards of $500mn. The two banks have also been hired as joint lead managers together with Abu Dhabi Commercial Bank (ADCB), Abu Dhabi Islamic Bank (ADIB), Bank ABC, Barclays, Dubai Islamic Bank (DIB), Emirates NBD Capital, First Abu Dhabi Bank (FAB) and Noor Bank. (Reuters)  Moody's: UAE's GDP growth seen at 2.2% in 2018, 2.9% in 2019 – Moody’s stated that the UAE’s recovering economy, which grew 0.8% in 2017, will benefit from rising oil production, government infrastructure spending in Dubai, and Abu Dhabi’s fiscal stimulus package. The agency has kept its outlook on UAE banking system at ‘Stable’. Moody’s sees the loan performance stabilizing as the economy recovers and borrower resiliency offsets ongoing problem of loan formation among small and mid-sized businesses and individuals. The agency sees UAE banking system with sector-wide Tangible Common Equity (TCE) at 14%-15% of risk-weighted assets over next 12 to 18 months. Moody’s sees the UAE’s willingness to support local banks if needed staying high over next 12 to 18 months. (Bloomberg)  Dubai’s 9-month non-oil foreign trade hits AED965.3bn – Dubai’s external non-oil trade in the first nine months of 2018 reached AED965.3bn, reflecting the Emirate’s rising role in global trade, a media report stated. Re-exports registered 13% growth to touch AED299.2bn, while imports reached AED592.2bn, and exports AED97.7bn, reported Emirates news agency Wam. Dubai Customs pointed out that the Emirate’s distinctive performance in external trade reflects the success of government policies and initiatives and strategic sustainability development plans to support the growth of various economic sectors. Dubai has embarked on ambitious and forward thinking initiatives such as 10X which aims to place Dubai ten years ahead of other cities. (GulfBase.com)  Network International is said to pick Citigroup, JPMorgan for its IPO – The private equity owners of Middle Eastern payment processor Network International have picked investment banks including Citigroup Inc. and JPMorgan Chase & Co. to advise on a potential stock sale, according to sources. Morgan Stanley was also selected to join Citigroup and JPMorgan in leading the
  6. 6. Page 6 of 7 initial public offering (IPO), which could take place next year in London, the sources added. Barclays Plc, Goldman Sachs Group Inc. and Emirates NBD Capital are acting as book runners for the listing, the sources added, while Evercore is the financial advisor. The IPO, which could see shareholders sell about 25% to 30% of the company, may value the whole of Network International at about $3bn, they said. Warburg Pincus and General Atlantic own a combined 49% stake in Network International. (Bloomberg)  Kuwait Finance House expects board to decide on AUB merger before year-end – The board of Kuwait Finance House (KFH) will likely decide on whether to go ahead with a merger with Bahrain’s Ahli United Bank before the end of the year, its CEO, Mazin Saad Al-Nahedh told Reuters. The two banks have been in talks since earlier this year on a potential merger that would create one of the largest Islamic banks in the Gulf. “We are still waiting for the board’s decision,” Mazin Saad al-Nahedh said in an interview. “We should have closure on this subject”, he said. (Reuters)  Groundwork begins on $2bn Mina Al Sultan Qaboos project – Preliminary work has commenced at Mina Al Sultan Qaboos (MASQ), according to DAMAC International, the strategic partner to the joint venture with Oman Tourism Development Company (Omran), the government’s tourism development arm. The transformation of the historical port into a $2bn integrated waterfront destination, which includes hotels, residences, food and beverage, retail and entertainment offerings, is in line with the National Strategy for Tourism 2040. Since the initial announcement of the joint venture, extensive project planning and place making research for Muttrah, the district that surrounds MASQ, has been undertaken. This included third-party studies, technical evaluation and traffic flow analysis. (GulfBase.com)  BARKA's net profit narrows to $23.9mn in 3Q2018 – Al Baraka Banking Group (BARKA) recorded net profit of $23.9mn in 3Q2018 as compared to $26.8mn in 3Q2017. Total operating income came in at $295.9mn as compared to $230.8mn in 3Q2017. Total assets stood at $23.3bn at the end of September 30, 2018 as compared to $25.5bn at the end of December 31, 2017. Receivables stood at $10.5bn, while customer current and other accounts stood at $5.2bn at the end of September 30, 2018. EPS came in at $0.0194 in 3Q2018 as compared to $0.0217 in 3Q2017. (Bahrain Bourse)
  7. 7. 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 7 of 7 Rebased Performance Daily Index Performance Source: Bloomberg Source: Bloomberg Source: Bloomberg Source: Bloomberg (*$ adjusted returns) 45.0 70.0 95.0 120.0 Oct-14 Oct-15 Oct-16 Oct-17 Oct-18 QSE Index S&P Pan Arab S&P GCC (0.3%) (1.2%) 1.0% 0.2% 0.6% 0.2% 0.5% (1.4%) (0.7%) 0.0% 0.7% 1.4% SaudiArabia Qatar Kuwait Bahrain Oman AbuDhabi Dubai Asset/Currency Performance Close ($) 1D% WTD% YTD% Global Indices Performance Close 1D%* WTD%* YTD%* Gold/Ounce 1,226.54 (0.1) (0.5) (5.9) MSCI World Index 2,084.45 1.6 2.3 (0.9) Silver/Ounce 14.58 0.3 (1.2) (13.9) DJ Industrial 26,180.30 2.1 3.6 5.9 Crude Oil (Brent)/Barrel (FM Future) 72.07 (0.1) (1.0) 7.8 S&P 500 2,813.89 2.1 3.3 5.2 Crude Oil (WTI)/Barrel (FM Future) 61.67 (0.9) (2.3) 2.1 NASDAQ 100 7,570.75 2.6 2.9 9.7 Natural Gas (Henry Hub)/MMBtu 3.54 0.3 8.6 14.6 STOXX 600 366.39 1.5 1.4 (10.2) LPG Propane (Arab Gulf)/Ton 76.75 (5.0) (5.8) (22.5) DAX 11,579.10 1.3 1.2 (14.5) LPG Butane (Arab Gulf)/Ton 86.50 (4.9) (7.2) (20.3) FTSE 100 7,117.28 1.6 1.8 (10.0) Euro 1.14 (0.0) 0.3 (4.8) CAC 40 5,137.94 1.7 1.4 (7.8) Yen 113.52 0.1 0.3 0.7 Nikkei 22,085.80 (0.1) (0.8) (3.6) GBP 1.31 0.2 1.2 (2.9) MSCI EM 997.92 0.6 0.1 (13.9) CHF 1.00 0.0 0.1 (2.8) SHANGHAI SE Composite 2,641.34 (0.7) (1.7) (24.9) AUD 0.73 0.4 1.2 (6.8) HANG SENG 26,147.69 0.2 (1.3) (12.8) USD Index 96.00 (0.3) (0.6) 4.2 BSE SENSEX 35,237.68 1.7 1.5 (8.7) RUB 66.32 0.3 0.2 15.1 Bovespa 87,714.35 (1.0) (2.3) 1.3 BRL 0.27 0.8 (1.0) (11.3) RTS 1,164.27 1.1 2.6 0.9 77.2 74.5 74.4

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