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Daily Market Report February 10, 2016

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The QSE Index gained 0.8% to close at 9,698.4

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Daily Market Report February 10, 2016

  1. 1. Page 1 of 7 QSE Intra-Day Movement Qatar Commentary The QSE Index gained 0.8% to close at 9,698.4. Gains were led by the Real Estate and Transportation indices, rising 2.3% and 2.2%, respectively. Top gainers were Qatari Investors Group and Barwa Real Estate Co., rising 9.5% and 9.3%, respectively. Among the top losers, Gulf International Services fell 4.6%, while Al Meera Consumer Goods Co. was down 1.1%. GCC Commentary Saudi Arabia: The TASI Index fell 0.5% to close at 5,873.6. Losses were led by the Insurance and Retail indices, falling 2.2% and 1.9%, respectively. Al Sagr Cooperative Ins. fell 5.2%, while Al Hammadi Co. for Dev. & Inv. was down 5.1%. Dubai: The DFM Index declined 1.0% to close at 3,064.7. The Banks and Consumer Staples indices fell 2.6% each. Al Salam Group Holding declined 7.4%, while Al Salam Bank - Sudan was down 6.5%. Abu Dhabi: The ADX benchmark index fell 1.0% to close at 4,062.1. The Consumer Staples index declined 2.7%, while the Investment & Financial Services index fell 2.4%. National Marine Dredging and Int. Fish Farming were down 9.9% each. Kuwait: The KSE Index declined 0.9% to close at 5,163.8. The Financial Services and Industrial indices fell 1.3% each. Kuwait Cable Vision declined 9.1%, while Gulf Franchising Holding Co. was down 8.1%. Oman: The MSM Index fell 0.2% to close at 5,388.0. The Financial index declined 0.2%, while the other indices ended in green. Construction Materials Ind. fell 3.3%, while Al Hassan Engineering was down 2.7%. Bahrain: The BHB Index declined 0.6% to close at 1,169.0. The Investment index fell 2.2%, while the Services index declined 0.1%. Arab Banking Corporation fell 6.8%, while Bahrain Duty Free Complex was down 0.6%. QSE Top Gainers Close* 1D% Vol. ‘000 YTD% Qatari Investors Group 31.60 9.5 751.2 (16.2) Barwa Real Estate Co. 35.20 9.3 1,959.9 (12.0) Qatar Industrial Manufact. Co. 41.60 8.1 295.0 4.4 Islamic Holding Group 57.50 7.5 169.9 (26.9) Gulf Warehousing Co. 49.50 6.0 50.3 (13.0) . QSE Top Volume Trades Close* 1D% Vol. ‘000 YTD% Barwa Real Estate Co. 35.20 9.3 1,959.9 (12.0) Gulf International Services 33.00 (4.6) 1,594.0 (35.9) Dlala Brokerage & Inv. Holding Co. 12.14 1.2 825.4 (34.3) Qatari Investors Group 31.60 9.5 751.2 (16.2) Salam International Investment 10.20 0.2 747.2 (13.7) Market Indicators 8 Feb 16 7 Feb 16 %Chg. Value Traded (QR mn) 336.7 215.8 56.0 Exch. Market Cap. (QR mn) 517,022.3 513,200.8 0.7 Volume (mn) 10.4 6.8 52.1 Number of Transactions 5,420 3,553 52.5 Companies Traded 40 39 2.6 Market Breadth 28:7 14:23 – Market Indices Close 1D% WTD% YTD% TTM P/E Total Return 15,125.57 0.8 0.2 (6.7) 10.6 All Share Index 2,587.91 1.0 0.3 (6.8) 10.6 Banks 2,658.62 0.6 (0.2) (5.3) 11.1 Industrials 2,776.65 0.7 (0.6) (12.9) 12.5 Transportation 2,310.64 2.2 0.5 (4.9) 11.0 Real Estate 2,134.35 2.3 2.3 (8.5) 7.0 Insurance 4,024.25 (0.2) (0.3) (0.2) 10.3 Telecoms 1,076.14 0.4 1.2 9.1 23.6 Consumer 5,473.22 0.7 1.2 (8.8) 12.1 Al Rayan Islamic Index 3,482.12 1.9 1.4 (9.7) 10.6 GCC Top Gainers## Exchange Close# 1D% Vol. ‘000 YTD% Dana Gas Abu Dhabi 0.51 6.3 66,171.5 0.0 Etihad Atheeb Telecom. Saudi Arabia 4.21 5.0 15,180.7 (22.8) Kuwait Food Co. Kuwait 2.30 4.6 74.5 15.0 Knowledge Eco. City Saudi Arabia 11.97 4.5 15,858.9 (22.8) Tihama Adv. & Public Saudi Arabia 36.06 4.5 19,841.3 21.0 GCC Top Losers## Exchange Close# 1D% Vol. ‘000 YTD% Nat. Marine Dredging Abu Dhabi 4.90 (9.9) 5.0 (10.6) Abu Dhabi Nat. Ins. Abu Dhabi 2.12 (9.8) 10.0 (26.4) Arab Banking Corp. Bahrain 0.48 (6.8) 102.1 12.9 Solidarity Saudi Saudi Arabia 7.62 (4.8) 3,891.8 2.6 Emirates NBD Dubai 7.40 (4.5) 563.1 0.0 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) QSE Top Losers Close* 1D% Vol. ‘000 YTD% Gulf International Services 33.00 (4.6) 1,594.0 (35.9) Al Meera Consumer Goods Co. 191.50 (1.1) 5.1 (13.0) Widam Food Co. 43.00 (1.0) 15.5 (18.6) Qatar Insurance Co. 82.40 (0.7) 27.5 0.5 National Leasing 12.52 (0.7) 309.8 (11.2) QSE Top Value Trades Close* 1D% Val. ‘000 YTD% Barwa Real Estate Co. 35.20 9.3 65,947.5 (12.0) Gulf International Services 33.00 (4.6) 53,754.3 (35.9) Qatari Investors Group 31.60 9.5 23,281.2 (16.2) Ooredoo 88.50 0.6 21,095.5 18.0 Industries Qatar 100.10 0.0 17,163.5 (9.9) 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* 9,698.37 0.8 0.2 2.3 (7.0) 92.47 141,974.3 10.6 1.5 4.9 Dubai 3,064.71 (1.0) 0.2 2.2 (2.7) 116.70 82,387.0 10.3 1.1 3.8 Abu Dhabi 4,062.06 (1.0) (1.9) 0.2 (5.7) 73.95 113,565.6 11.6 1.3 5.6 Saudi Arabia 5,873.64 (0.5) (1.7) (2.1) (15.0) 1,697.56 358,516.9 13.5 1.4 4.3 Kuwait 5,163.80 (0.9) (0.7) 1.0 (8.0) 35.80 82,132.1 14.8 0.9 4.9 Oman 5,388.02 (0.2) 2.8 4.0 (0.3) 21.05 21,863.5 9.3 1.1 4.7 Bahrain 1,169.02 (0.6) (0.7) (1.5) (3.9) 0.94 18,379.2 7.6 0.8 5.9 Source: Bloomberg, Qatar Stock Exchange, Tadawul, Muscat Securities Exchange, DFM and Zawya (** TTM; * Value traded ($ mn) do not include special trades, if any; *Data as of February 8, 2016) 9,600 9,650 9,700 9,750 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 gained 0.8% to close at 9,698.4. The Real Estate and Transportation indices led the gains. The index rose on the back of buying support from Qatari shareholders despite selling pressure from non-Qatari and GCC shareholders.  Qatari Investors Group and Barwa Real Estate Co. were the top gainers, rising 9.5% and 9.3%, respectively. Among the top losers, Gulf International Services fell 4.6%, while Al Meera Consumer Goods Co. was down 1.1%.  Volume of shares traded on Monday rose by 52.1% to 10.4mn from 6.8mn on Sunday. Further, as compared to the 30-day moving average of 7.2mn, volume for the day was 44.3% higher. Barwa Real Estate Co. and Gulf International Services were the most active stocks, contributing 18.9% and 15.4% 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) 4Q2015 % Change YoY Operating Profit (mn) 4Q2015 % Change YoY Net Profit (mn) 4Q2015 % Change YoY Dubai Insurance Co.* Dubai AED 355.3 11.5% 23.4 19.0% 35.1 16.8% Oman Insurance Co.* Dubai AED 1,399.2 -3.8% 30.3 -70.0% 80.9 -64.0% Agthia Group* Abu Dhabi AED 1,866.4 12.8% – – 231.3 19.7% Hotels Management Company International* Oman OMR 11.3 -7.7% – – 2.2 -18.0% Muscat Gases* Oman OMR 9.5 -5.1% – – 1.3 -3.8% Banader Hotels Co.* Bahrain BHD – – – – -1.2 NA Source: Company data, DFM, ADX, MSM (*FY2015 results) Global Economic Data Date Market Source Indicator Period Actual Consensus Previous 02/08 US Federal Reserve Labor Market Conditions Index Change January 0.4 2.0 2.3 02/09 US Nat'l Fed. of Ind. Business NFIB Small Business Optimism January 93.9 94.5 95.2 02/09 US Bureau of Labor Statistics JOLTS Job Openings December 5,607.0 5,413.0 5,346.0 02/09 US Census Bureau Wholesale Inventories MoM December -0.10% -0.20% -0.40% 02/09 US Census Bureau Wholesale Trade Sales MoM December -0.30% -0.40% -1.30% 02/08 EU Sentix Behavioral Indices Sentix Investor Confidence February 6.0 7.4 9.6 02/09 France Ministry of the Economy Budget Balance YTD December -70.5bn – -82.8bn 02/08 France Banque De France Bank of France Bus. Sentiment January 101.0 99.0 100.0 02/09 Germany Deutsche Bundesbank Industrial Production SA MoM December -1.20% 0.50% -0.10% 02/09 Germany Bundesministerium fur Wirtscha Industrial Production WDA YoY December -2.20% -0.60% 0.10% 02/09 Germany Destatis Trade Balance December 18.8bn 20.0bn 20.5bn 02/09 Germany Destatis Current Account Balance December 25.6bn 26.7bn 24.3bn 02/09 Germany Deutsche Bundesbank Exports SA MoM December -1.60% 0.50% 0.50% 02/09 Germany Deutsche Bundesbank Imports SA MoM December -1.60% -0.50% 1.30% 02/09 UK ONS Visible Trade Balance GBP/Mn December -£9,917.0 -£10,400.0 -£11,503.0 02/09 UK ONS Trade Balance Non EU GBP/Mn December -£2,357.0 -£2,500.0 -£3,538.0 02/09 UK ONS Trade Balance December -£2,709.0 -£3,000.0 -£4,031.0 02/09 UK The British Retail Consortium BRC Sales Like-For-Like YoY January 2.60% 0.30% 0.10% 02/08 Spain INE Industrial Output NSA YoY December 2.90% – 6.00% 02/08 Spain INE Industrial Output SA YoY December 3.70% 4.10% 4.30% 02/08 Spain INE Industrial Production MoM December -0.20% – 0.10% 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 55.60% 45.54% 33,848,174.07 Qatari Institutions 14.40% 16.30% (6,399,400.80) Qatari 70.00% 61.84% 27,448,773.27 GCC Individuals 1.19% 2.52% (4,473,427.53) GCC Institutions 3.58% 7.81% (14,236,756.46) GCC 4.77% 10.33% (18,710,183.99) Non-Qatari Individuals 16.14% 16.85% (2,386,498.71) Non-Qatari Institutions 9.09% 10.97% (6,352,090.57) Non-Qatari 25.23% 27.82% (8,738,589.28)
  3. 3. Page 3 of 7 Earnings Calendar Tickers Company Name Date of reporting 4Q2015 results No. of days remaining Status QGRI Qatar General Insurance & Reinsurance 10-Feb-16 0 Due WDAM Widam Food Company 11-Feb-16 1 Due SIIS Salam International Investment 14-Feb-16 4 Due MCGS Medicare Group 14-Feb-16 4 Due UDCD United Development Company 14-Feb-16 4 Due DBIS Dlala Brokerage & Investment Holding Company 15-Feb-16 5 Due AKHI Al Khaleej Takaful Insurance 15-Feb-16 5 Due AHCS Aamal Company 15-Feb-16 5 Due ERES Ezdan Real Estate Company 16-Feb-16 6 Due QGTS Qatar Gas Transport Company (Nakilat) 17-Feb-16 7 Due BRES Barwa Real Estate Company 21-Feb-16 11 Due MERS Al Meera Consumer Goods Company 21-Feb-16 11 Due MCCS Mannai Corp. 24-Feb-16 14 Due ORDS Ooredoo 1-Mar-16 20 Due Source: QSE News Qatar  QSE suspends trading of MCCS shares on February 10 – The Qatar Stock Exchange (QSE) has announced the trading suspension of Mannai Corporation’s (MCCS) shares on February 10, 2016 due to its EGM being held on that day. (QSE)  DOHI seeks shareholders nod to distribute 10% cash dividend – Doha Insurance Company (DOHI) will hold its ordinary general assembly meeting and extraordinary general assembly meeting (AGM & EGM) on February 28, 2016. Shareholders at the AGM will consider approving the board of directors’ (BoD) proposal to distribute cash dividend of 10% from the share par value (QR1 per share). The meeting will also discuss and approve corporate governance report of DOHI for the year 2015. Meanwhile, the EGM will consider amending company’s Articles of Association to comply with the Commercial Companies Law No. (11) year 2015. In case the quorum is not met, a second meeting will be held on March 7, 2016 at the same time and place. (QSE)  QIBK to hold AGM on February 22 – Qatar Islamic Bank (QIBK) will hold its general assembly meeting (AGM) on February 22, 2016. Shareholders at the AGM will consider approving the board of directors’ (BoD) proposal to distribute 42.5% cash dividend of the nominal value per share (QR4.25 per share). The meeting will also discuss and approve the board’s recommendation regarding QIB Additional Tier 1 (AT1) Capital Perpetual Sukuk and the QIB Sukuk program. In this regard, shareholders will consider extending the approval of QR3bn remaining from the Additional Tier 1 (AT1) Capital Perpetual Sukuk that was already approved as part of the QR5bn. They will consider approving an increase in the maximum size of QIB Sukuk program to the level of $3bn, instead of $1.5bn. In case the quorum is not met, a second meeting will be held on February 29, 2016 at the same time and place. (QSE)  QGMD discloses external auditor qualification on the financial statements for FY2014 –Qatari German Company for Medical Devices (QGMD), in its note ‘8” of the financial statements, has recognized a plot of land obtained under operating lease in 2001 as property, plant and equipment. In year 2007, the company reclassified a parcel of land as investment property from its property, plant and equipment based on its purpose. The company’s management is of the view that the risk and rewards of the leased land will be transferred to the company at the end of lease period based on subsequent discussions with the Ministry of Municipality & Urban Planning and have also sent a request letter to the Ministry to confirm the same. As of the date of disclosure, the company has not been provided any confirmation from the Ministry of Municipality & Urban Planning confirming that such land will be transferred to the company or renew the lease of long term agreement for similar period. If the company does not get the required approval for above requests, then the value of the land will be removed from property, plant and equipment, and according to external auditor report it will result in increasing the company’s accumulated losses by QR21,845,277 according to financial statements as of 31 December 2014 (QSE)  ORDS seeking over $1.5bn via bonds, loans – According to sources, Ooredoo (ORDS) is in talks with banks to raise over $1.5bn through bonds and loans in 2016. The telecommunications firm is seeking funds to refinance its existing $1bn revolving credit facility (RCF) maturing in March 2017. The firm is reportedly exploring options, including raising funds through a conventional RCF or Islamic loan in US dollars or in a combination of currencies. ORDS has asked banks to respond no later than February 14, 2016. ORDS is looking to tap the international debt market instead of seeking loans from local banks, as low oil prices have shrunk regional governments’ energy revenues, hitting banking sector liquidity. The firm has sought commitments from local and international banks for credit facilities with tenures of three, five and six years, and aims to sign the facility by April 30, 2016. The company is, however, open to raising funds as late as March 2017. On bonds, ORDS has sought proposals in five, 10 and 15-year tenures. Meanwhile, Microsoft and ORDS have announced a collaboration to offer their products bundled together for customers. Under the terms of the agreement, Microsoft products such as Office 365, Surface Pro 4 and Lumia devices can be purchased from ORDS stores bundled with ORDS’ Shahry plans. Moreover, ORDS has announced that its Mozaic TV Clubs, which enable customers to watch movies and programs on demand, has seen an unprecedented take-up in the past few months, recording the highest growth in the history of the service. (GulfBase.com, Reuters, Peninsula Qatar)  KPMG’s Omar Mahmood: Listed Qatar banks to continue exploring global growth options – KPMG (Qatar) Partner Omar Mahmood has said that banks listed in Qatar will continue to explore international expansion opportunities in the region and outside to help achieve their strategic growth plans. This will help them tap into the increasing number of trade corridors to and from the region and face economic headwinds. He said funding costs were expected to rise due to greater competition for cheaper
  4. 4. Page 4 of 7 government deposits, diversification of funding sources and a rising global interest rate environment. He expects that there would be a continued trend to raise additional long-term funding and capital, as the high Basel III capital adequacy requirements come into force in a phased manner and banks look to exceed the minimum requirements to fund expansion plans. (Gulftimes.com)  Qatar and Saudi ministers discuss investment plans – Minister of Economy and Commerce (MEC) HE Sheikh Ahmed bin Jassim Al Thani met with Saudi Arabian Minister of Commerce and Industry HE Dr Tawfiq Al Rabiah in Riyadh. The meeting discussed prospects of joint cooperation between the two countries, particularly in the areas of economy, trade & investment and ways of enhancing them. (Peninsula Qatar) International  Obama proposes $4.1tn spending plan in final White House budget – US President Barack Obama proposed a $4.1tn spending plan for FY2017 on February 9, 2016 in the final White House budget that met immediate Republican resistance for its cost and reliance on tax hikes to fund domestic priorities. Obama sought to outline his fiscal and political vision for the country with proposed investments in infrastructure, cyber security, education and job growth. It also includes over $11bn for the Departments of Defense and State to fight Islamic State militants and stabilize Syria. However, the plan is primarily a political document and is unlikely to be embraced by the Republican-controlled Congress. Meanwhile, Obama proposed expanding the earned income tax credit (EITC), which helps low-income taxpayers, to give a bigger boost to childless people. Obama proposed doubling the tax credit for workers, who are not raising children, bringing the credit to a maximum of about $1,022 a year for them. He said it should be expanded to cover workers with earnings up to 150% of the poverty line, so about $18,180 for a single person. Under the current law, the cutoff comes at about $15,040. (Reuters)  NFIB: US small business confidence at two-year low – The National Federation of Independent Business (NFIB) has said that US small business confidence fell in January to its lowest level in nearly two years amid worries about the near-term outlook for business conditions and sales growth, consistent with a recent slowdown in economic growth. NFIB said its Small Business Optimism Index fell 1.3 points to 93.9 last month, the weakest reading since February 2014. However, small businesses remained fairly upbeat about the labor market. NFIB said there was little sign that a stock market selloff and December’s interest rate hike by the Federal Reserve, the first in nearly a decade, had impacted confidence. Owners’ perceptions of business conditions in six months weakened sharply as did their views of expected sales. (Reuters)  ONS: UK trade deficit widens in fourth quarter, likely to have dragged on economic growth – The Office for National Statistics (ONS) has said that Britain’s trade deficit with the rest of the world worsened in 4Q2015 and is likely to have dragged on economic growth, despite improving in the month of December. ONS said Britain’s total trade deficit widened to £10.352bn in 4Q2015 from £8.575bn in 3Q2015, marking the biggest trade gap since the start of 2015. Trade is likely to appear as a drag on economic growth at 2015-end when revised figures for GDP are released. The trade in goods deficit for 2015 as a whole widened to £125.028bn from £123.143bn, the biggest on record. In December alone, the total trade deficit, including services, narrowed to £2.709bn from £4.031bn pounds, helped by the value of oil imports falling to their lowest since February 2009 as crude prices plunge. (Reuters)  German output drop raises doubts about growth prospects – German industrial output plunged in December at the steepest rate in 16 months and exports also dropped unexpectedly, suggesting Europe’s largest economy lost momentum at 2015-end and may struggle in 2016. The surprisingly poor data highlighted the challenges to Germany’s traditionally export-driven economy from a slowdown in emerging markets and signs that growth in the US, its most important trade partner, may be cooling. Data from the Economy Ministry showed industrial output fell by 1.2% MoM in December, the biggest drop since August 2014. (Reuters) Regional  BAML: OPEC needs to raise output in next 5 years to balance market – According to a report released by Bank of America Merrill Lynch (BAML), OPEC (Organization of the Petroleum Exporting Countries) needs to increase production by 4.1mn barrels per day (mbpd) over the next five years to balance the market. Moreover, the structural shift toward a lower price environment will have profound and long-lasting consequences for non-OPEC production. As per the report, the US will be the only country to ramp up its production materially in non-OPEC nations by 2020, and OPEC may have to provide the incremental barrels as demand will grow by 5.9 mbpd in 2015-20. BAML believes that Saudi Arabia can make up for half of this given its 2.1 mbpd of spare capacity, while other OPEC countries will expand their capacity in the next five years, namely Iran, the UAE and Nigeria. (Gulf-Times.com)  Al Hammadi reports electrical contact incident in hospital basement – Al Hammadi Company for Development & Investment has reported an electrical contact incident in the electricity circuit breakers room at the basement of Al Hammadi Olaya Hospital building. Al Hammadi said that the incident did not result in any human casualties or material damages. (Tadawul)  Sipchem to acquire Ikarus’ equity interests in Acetyls Complex – Saudi International Petrochemical Company (Sipchem) has made an announcement regarding its agreement with Kuwait’s Ikarus Petroleum Industries Company to acquire its equity interests in the Acetyl Complex. The company has completed all governmental requirements to purchase the Ikarus’ stake in the Acetyl Complex, namely in two Sipchem’s affiliates: International Acetyl Company (11%) and International Vinyl Acetate Company (11%). The company has paid the entire value of the deal, which stands at SR375.3mn. The financial impact will be reflected during 1Q2016. Sipchem’s equity interests in each company, by virtue of this transaction, will increase to 87% with no change in the ownership percentages of the remaining partners. (Tadawul)  Riyad Bank makes SAR201mn non-recurring capital gains from land sale – Riyad Bank has recorded non-recurring capital gains of SR201.11mn from selling a land plot in Jeddah. The bank received the full payment from the buyer and the ownership transfer was completed. The land’s book value stood at SR1.4mn. The bank said that the relevant financial impact will be reflected in the 1Q2016 financial results. (Tadawul)  Majid Al Futtaim to invest SR14bn to build two malls in Riyadh – Majid Al Futtaim would invest SR14bn to build two malls in Riyadh. The Mall of Saudi spans a total land area of more than 866,000 square meters (sqm) and will include shops, restaurants, entertainment venues, offices, hotels and residential units, while the second mall City Centre Ishbiliyah is located in the eastern part of Riyadh and will open in 2018. The Phase I of development at Mall of Saudi will start in mid-2017 and is expected to be completed by 2022. The group expects the new malls to create more than 10,000 direct and indirect jobs in Riyadh. With the two new developments, there will be more than 20 malls across the MENA region that are owned and operated by the privately held company, which last week reported an 8% increase in annual revenue. (Ameinfo.com)  SEC buys six more gas turbines – Saudi Electricity Company (SEC) has ordered six more of GE’s trailer-mounted, fast-starting
  5. 5. Page 5 of 7 TM2500+ mobile aeroderivative gas turbine packages for existing power plant locations in Jizan and Tabuk. With black-start capability, these proven turbines can serve as emergency generators in the event of a power outage. (GulfBase.com)  Asharq Al Awsat: KSA considers lifting local partnership requirement for foreign companies – Asharq Al Awsat newspaper has reported that Saudi Arabia is reconsidering a requirement for foreign companies setting up in the country to have a local partner. As per the newspaper, a committee has been set up to increase foreign direct investment (FDI) flows to the Kingdom, which is also expected to remove bureaucratic barriers for foreign firms that want access to the Saudi Arabian economy. (GulfBase.com)  PM: UAE plans to trim ministries, outsource most government services – Prime Minister Sheikh Mohammed bin Rashid al- Maktoum said that the UAE is planning to outsource most government tasks to the private sector and cut the number of ministries. (Reuters)  OIC BoD recommends 10% dividend – Oman Insurance Company’s (OIC) board of directors (BoD) has recommended 10% dividend. (DFM)  DP World's container volumes up 3% YoY in 2015 – DP World reported a 3% YoY growth in container volumes for 2015 despite challenging conditions and difficult second half for global trade operators. All top-20 trading nations in the World Trade Organisation reported declines in 2015. The Baltic Dry Bulk Index, considered as a proxy for global trade, witnessed a series of record lows since the beginning of 2015. DP World reported that gross container volumes of the company totaled 61.7mn twenty-foot equivalent units (TEU) in 2015 as compared to 59.9mn TEUs in 2014. The operator expects to open its third berth at London Gateway in mid-2016, adding 600,000 TEUs of new capacity. The additional 2mn TEUs at terminal three (T3) Jebel Ali will also be operational in 2H2016. (GulfBase.com)  Shuaa Capital advises ENG on Misr Bus stake acquisition – SHUAA Capital has successfully advised Emirates National Group (ENG) on its strategic acquisition of a stake in Egyptian Advanced Company for Public Transportation (Misr Bus). ENG is a UAE-based integrated transportation solutions company, while Misr Bus is a transportation company operating in Egypt. (DFM)  DIB seeks shareholders’ nod to issue up to $750mn Shari’ah- compliant capital boosting bonds – Dubai Islamic Bank (DIB) is seeking shareholders’ approval to issue up to $750mn in Shari’ah- compliant capital boosting bonds. This would potentially raise its Tier 1 or core capital, to $2.75bn. The lender has sought shareholders’ approval for the board to be able to issue a Sukuk and/or other convertible shares if required. DIB has also sought approval from shareholders to allow it to increase its paid-up capital by AED988.4mn ($269.1mn), subject to regulatory and other approvals. (Reuters)  MoF Undersecretary: UAE expects to ratify federal debt law in 2016 – The Ministry of Finance (MoF) Undersecretary Younis Al-Khouri said that the UAE is likely to ratify a law by 2016-end that will allow the federal government to issue bonds, after which the UAE would issue about AED80-100bn worth of debt. He expects law to be ratified in six to nine months. The seven individual emirates in the UAE issue bonds, but the federal government has not done so in the absence of such a law, which has been in preparation for years. (Reuters)  Delayed Falconcity of Wonders project to get $2bn kickstart – The main developer of Dubai’s Falconcity of Wonders project said the long-delayed project will gain new life in 2016 with around $2bn in new developments. The falcon-shaped project has seen only about a tenth of the 5,500 planned homes built since its launch in 2005 and although billed to include outsized replicas of Pyramids and Taj Mahal, there are as yet no wonders on the 42mn square foot plot. (Reuters)  Dubai to press ahead with world's largest mall as Gulf economy slows – Dubai said that it would press ahead with plans to build the world’s largest shopping mall despite an economic slowdown looming in the region, but would assess market demand before proceeding with the project’s later stages. The Mall of the World project, encompassing 8mn square feet of shopping space connected to a theme park, 100 hotels and serviced apartment buildings with 20,000 rooms, was announced in mid-2014, just as oil prices began a precipitous plunge. Dubai Holding Vice- Chairman Ahmad bin Byat said that the project is massive and complex, and will have to be built in stages. He predicted that it would still become the world's largest shopping destination, adding that the Phase I representing about a quarter of the project’s size would be completed before Dubai hosts the Expo 2020 exhibition. He added that Dubai Holding would provide around AED30bn for the project, which is estimated to be valued at AED80bn. (Reuters)  UNB reports AED1.85bn net profit in 2015 – Union National Bank (UNB) reported a net profit of AED1.85bn in 2015 as compared to AED2bn in 2014. The bank’s operating income reached AED3.73bn in 2015 as compared to AED3.5bn in 2014. The bank’s total assets stood at AED101.89bn at the end of December 31, 2015 as compared to AED93.46bn in the year-ago period. Loans & advances reached AED68.43bn, while customer deposits stood at AED74.79bn. EPS amounted to AED0.65 in 2015 versus AED0.69 in 2014. (ADX)  OCB Oilfield acquires 100% stake in Kuiper International – OCB Oilfield Services, a portfolio company of Gulf Capital, has acquired 100% stake in Kuiper International. Kuiper is a dominant player in the offshore construction and maintenance services sector, with a particular stronghold in the Asia Pacific (APAC) region and Australia. The Kuiper deal represents the fourth bolt-on acquisition in Asia Pacific for a Gulf Capital portfolio company and almost doubles the size of OCB, and extends both its geographical coverage as well as its service offerings to its client base. (Peninsula Qatar)  Chairman: Du expects royalty rates to remain unchanged in 2017 – Emirates Integrated Telecommunications Company (Du) Chairman Ahmad Bin Byat said that the royalty rates or taxes levied on Du are likely to remain unchanged in 2017. The UAE’s Finance Ministry had previously set out a five-year timetable for Du's royalty or tax rates for 2012 to 2016. This steadily increased Du's rates until the company paid the same in percentage terms as former monopoly Etisalat. Both companies will pay 15% of their regulated revenue which excludes the likes of handset sales and 30% of their regulated profit in royalties in 2016, leaving a question mark as to what will happen from 2017 onward. (Reuters)  KFH to set up Islamic Turkish funds firm – Kuwait Finance House (KFH) will set up a Shari’ah-compliant asset management unit under its Turkish bank branch. Kuwait Finance House Turk will establish five Shari’ah -compliant investment funds and offer other investment services under KT Portfoy, the new unit. The establishment of the new firm is conditional on approval from Turkey's Capital Market Authority. Earlier, in January 2016, KFH CEO said it would issue Islamic bonds to boost capital reserves at its subsidiary bank in Turkey, even as it looks to restructure its global assets. (Reuters)  Americana gives go-ahead to due diligence over stake sale – Kuwait Food Company (Americana) has agreed to give an investment firm 60 days to carry out due diligence for the acquisition of a controlling stake in the company. Last week, Adeptio had signed
  6. 6. Page 6 of 7 an initial agreement to buy a 69% stake in Americana from the Al Khair Holding Company, which is owned by Kuwait's Al-Kharafi family. Americana has a market capitalization of about $2.95bn, suggesting the 69% stake could be worth around $2bn. (Reuters)  KUNA: KPC to sell loss-making assets to cut costs – KUNA has reported that Kuwait Petroleum Corporation (KPC) is planning to sell loss-making assets to cut costs as low oil prices put pressure on its finances. KPC CEO Nizar al-Adsani said that the company has started efforts to sell its Europoort refinery in the Netherlands and had decided to shut a fertilizer plant of Kuwaiti unit Petrochemical Industries Company. He added that KPC's affiliates, Kuwait National Petroleum Company and Kuwait Oil Company have already cut costs by 15-20%. As part of the exercise, KPC plans to set up a company to manage the integration of its new refinery at Al-Zour and a petrochemical complex, and liquefied natural gas facilities. (Reuters)  Kuwait's Equate in talks with banks to refinance $6bn bridge loan – Equate Petrochemical Company is in talks with banks to refinance a $6bn bridge loan that was secured in 2015 and was partly used to fund the acquisition of petrochemical company MEGlobal. According to sources, the venture between Dow Chemical and Petrochemical Industries Company (PIC) is seeking funds split into portions of three years and five years. Equate's loan would facilitate the exit of Dow from some of its ventures in Kuwait. The sale of MEGlobal is part of Dow's bigger plan to optimize ownership in its Kuwait operations. The current bridge loan was arranged by banks including JP Morgan, Citigroup, HSBC, Kuwait Finance House and National Bank of Kuwait. (Bloomberg)  Al Maha Ceramics BoD recommends 35% cash dividend for 2015 – Al Maha Ceramics’ board of directors (BoD) has proposed paying 35% cash dividend (35 baizas per share) from the paid-up capital for the year 2015. (MSM)  HMCI BoD recommends OMR0.90 per share cash dividend for 2015 – Hotels Management Company International’s (HMCI) board of directors (BoD) has proposed paying OMR0.90 per share cash dividend for the year 2015. (MSM)  Muscat Gases BoD recommends 35% cash dividend – Muscat Gases’ board of directors (BoD) has proposed 35% cash dividend. This recommendation is subject to the approval of shareholders at the AGM to be held on March 24, 2016. (MSM)  Al Anwar Ceramic Tiles recommends 20% cash dividend for 2015 – Al Anwar Ceramic Tiles has proposed a cash dividend of 20% (20 baizas per share) on the company’s paid-up capital for the year 2015. (MSM)  CBO Executive President: Oman to borrow $5-10bn from abroad – Central Bank of Oman (CBO) Executive President HE Hamood Sangour Al Zadjali said that Oman is planning to borrow between $5-10bn from abroad to help finance a budget deficit caused by low oil prices. He said the government might issue Eurobonds by the middle of 2016. He added that the government is also planning to issue OMR600mn of domestic bonds in 2016 or about OMR100mn. Oman is currently marketing an OMR100mn, five- year issue with a coupon of 3.5% - the bonds will be auctioned on February 16, 2016. (Reuters)  Oman’s first integrated light industries city to be ready in 2018 – Oman’s first integrated light industries city, which will be developed by Sandan Development at a cost of OMR100mn, is expected to be completed in mid-2018, catering to automotive and construction sectors. The first-of-its-kind project will be constructed over 250,000 square meters of land and will be located 5 kilometers away from Al Mabailah exit at the express way. (GulfBase.com)  BBK reports BHD53.2mn net profit in 2015 – BBK reported a net profit of BHD53.21mn in 2015 as compared to BHD50.1mn in 2014. Total operating income reached BHD121.14mn in 2015 as compared to BHD117.55mn in 2014. The bank’s total assets stood at BHD3.646bn at the end of December 31, 2015 as compared to BHD3.5bn in the year-ago period. Loans & advances reached BHD1.76bn, while deposits and amounts due to banks & other financial institution stood at BHD179.4mn. EPS amounted to BHD0.05 per share in 2015 versus BHD0.047 per share in 2014. The bank’s capital adequacy ratio remained at comfortable levels well above the regulatory requirement at 14.87%. Meanwhile, the board of directors has recommended distribution of 25 fils per share cash dividend. This recommendation is subject to the approval of the Central Bank of Bahrain and general assembly of the bank. (Bahrain Bourse)  Banader Hotels BoD decides dividend freeze – Banader Hotels Company has decided not to distribute dividends for the financial year ended December 31, 2015. (Bahrain Bourse)
  7. 7. Contacts Saugata Sarkar 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 SPC Contact Center: (+974) 4476 6666 PO Box 24025 Doha, Qatar Disclaimer and Copyright Notice: This publication has been prepared by QNB Financial Services SPC (“QNBFS”) a wholly-owned subsidiary of QNB SAQ (“QNB”). QNBFS is regulated by the Qatar Financial Markets Authority and the Qatar Exchange QNB SAQ 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 (#Market closed on February 9, 2016) Source: Bloomberg (*$ adjusted returns; #Market closed on February 9, 2016) 80.0 100.0 120.0 140.0 160.0 180.0 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 QSEIndex S&P Pan Ar ab S&P GCC (0.5%) 0.8% (0.9%) (0.6%) (0.2%) (1.0%) (1.0%) (1.6%) (0.8%) 0.0% 0.8% 1.6% SaudiArabia Qatar Kuwait Bahrain Oman AbuDhabi Dubai Asset/Currency Performance Close ($) 1D% WTD % YTD% Global Indices Performance Close 1D%* WTD%* YTD%* Gold/Ounce 1,189.13 (0.0) 1.3 12.0 MSCI World Index 1,488.54 (0.7) (2.3) (10.5) Silver/Ounce 15.24 (0.5) 1.5 10.0 DJ Industrial 16,014.38 (0.1) (1.2) (8.1) Crude Oil (Brent)/Barrel (FM Future) 30.32 (7.8) (11.0) (18.7) S&P 500 1,852.21 (0.1) (1.5) (9.4) Crude Oil (WTI)/Barrel (FM Future) 27.94 (5.9) (9.6) (24.6) NASDAQ 100 4,268.76 (0.3) (2.2) (14.8) Natural Gas (Henry Hub)/MMBtu 2.17 (2.6) 3.9 (6.3) STOXX 600 309.39 (0.3) (3.6) (12.0) LPG Propane (Arab Gulf)/Ton 35.50 (3.1) (3.1) (9.3) DAX 8,879.40 0.2 (2.9) (14.3) LPG Butane (Arab Gulf)/Ton 51.50 (14.2) (11.2) (10.4) FTSE 100 5,632.19 (0.5) (3.6) (11.3) Euro 1.13 0.9 1.2 4.0 CAC 40 3,997.54 (0.4) (3.4) (10.3) Yen 115.11 (0.6) (1.5) (4.3) Nikkei 16,085.44 (4.7) (2.6) (11.2) GBP 1.45 0.3 (0.2) (1.8) MSCI EM 729.88 (0.6) (1.3) (8.1) CHF 1.03 1.5 1.9 3.0 SHANGHAI SE Composite# 2,763.49 0.0 0.0 (22.9) AUD 0.71 (0.2) 0.0 (3.0) HANG SENG # 19,288.17 0.0 0.0 (12.4) USD Index 96.07 (0.5) (1.0) (2.6) BSE SENSEX 24,020.98 (1.0) (2.6) (10.3) RUB 79.69 2.2 2.8 9.9 Bovespa$# 40,592.09 0.0 0.0 (5.1) BRL# 0.26 0.0 0.0 1.5 RTS 690.37 (1.9) (4.9) (8.8) 110.5 93.6 93.1

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