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QNBFS Daily Market Report August 1, 2018

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The QSE Index rose 1.8% to close at 9,825.1.

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QNBFS Daily Market Report August 1, 2018

  1. 1. Page 1 of 7 QSE Intra-Day Movement Qatar Commentary The QSE Index rose 1.8% to close at 9,825.1. Gains were led by the Banks & Financial Services and Real Estate indices, gaining 3.7% and 1.3%, respectively. Top gainers were QNB Group and Dlala Brokerage & Investment Holding Company, rising 5.4% and 4.1%, respectively. Among the top losers, Doha Insurance Group fell 5.4%, while Qatar First Bank was down 3.0%. GCC Commentary Saudi Arabia: The TASI Index fell 0.2% to close at 8,294.8. Losses were led by the Health Care Eq. and Telecom. Services indices, falling 1.0% and 0.8%, respectively. National Medical Care declined 4.8%, while Nama Chemicals Co. was down 4.1%. Dubai: The DFM General Index declined 0.3% to close at 2,956.0. The Services index fell 1.1%, while the Investment & Fin. Services index declined 0.7%. Al Salam Bank - Bahrain fell 5.7%, while Dar Al Takaful was down 4.6%. Abu Dhabi: The ADX General Index rose 0.3% to close at 4,859.5. The Telecommunication index gained 1.2%, while the Industrial index rose 0.3%. Invest Bank gained 10.1%, while Emirates Driving Company was up 8.8%. Kuwait: The Kuwait Main Market Index fell 0.2% to close at 4,933.0. The Technology index declined 3.6%, while the Banks index fell 1.3%. Kuwait & Middle East Financial Inv. Co. fell 9.1%, while Warba Insurance Co. was down 7.8%. Oman: The MSM 30 Index rose 0.4% to close at 4,336.6. The Financial index gained 0.6%, while the other indices ended in red. Nat. Pharmaceutical Ind. rose 3.5%, while National Bank of Oman was up 2.4%. Bahrain: The BHB Index fell 0.9% to close at 1,358.4. The Commercial Banks index declined 1.4%, while the Industrial index fell 0.8%. Al Salam Bank - Bahrain declined 8.7%, while Khaleeji Commercial Bank was down 3.2%. QSE Top Gainers Close* 1D% Vol. ‘000 YTD% QNB Group 175.00 5.4 511.5 38.9 Dlala Brokerage & Inv. Holding Co. 14.61 4.1 550.1 (0.6) Qatar Islamic Bank 133.00 3.9 292.0 37.1 Zad Holding Company 92.80 3.1 11.4 26.0 The Commercial Bank 40.80 2.4 240.6 41.2 QSE Top Volume Trades Close* 1D% Vol. ‘000 YTD% Qatar First Bank 5.12 (3.0) 1,214.8 (21.6) Vodafone Qatar 9.15 0.4 1,063.4 14.1 Qatar Gas Transport Company Ltd. 16.79 (0.7) 1,061.3 4.3 United Development Company 13.90 1.2 889.5 (3.3) Ezdan Holding Group 9.05 2.3 775.5 (25.1) Market Indicators 31 July 18 30 July 18 %Chg. Value Traded (QR mn) 362.3 241.6 50.0 Exch. Market Cap. (QR mn) 539,850.5 528,046.4 2.2 Volume (mn) 10.2 8.4 20.8 Number of Transactions 4,986 3,407 46.3 Companies Traded 41 42 (2.4) Market Breadth 27:10 20:17 – Market Indices Close 1D% WTD% YTD% TTM P/E Total Return 17,310.75 1.8 2.3 21.1 14.8 All Share Index 2,847.79 2.0 2.9 16.1 14.9 Banks 3,518.36 3.7 4.3 31.2 14.3 Industrials 3,166.76 0.4 1.7 20.9 16.8 Transportation 2,008.27 (0.1) 2.3 13.6 12.5 Real Estate 1,711.25 1.3 4.8 (10.7) 14.6 Insurance 3,112.17 0.5 2.1 (10.6) 27.9 Telecoms 1,009.76 0.8 (3.4) (8.1) 39.6 Consumer 6,298.01 0.1 (0.6) 26.9 13.6 Al Rayan Islamic Index 3,858.99 0.7 0.8 12.8 16.9 GCC Top Gainers ## Exchange Close # 1D% Vol. ‘000 YTD% QNB Group Qatar 175.00 5.4 511.5 38.9 DAMAC Properties Dubai 2.33 5.0 1,955.9 (29.4) National Mobile Telecom. Kuwait 0.81 4.4 120.9 (25.0) Qatar Islamic Bank Qatar 133.00 3.9 292.0 37.1 The Commercial Bank Qatar 40.80 2.4 240.6 41.2 GCC Top Losers ## Exchange Close # 1D% Vol. ‘000 YTD% Al Salam Bank-Bahrain Bahrain 0.11 (8.7) 336.1 (7.9) Ahli United Bank Kuwait 0.30 (3.6) 852.1 (10.6) Gulf Bank Kuwait 0.26 (3.0) 6,029.7 10.1 Kuwait Finance House Kuwait 0.58 (2.3) 11,580.6 11.3 Etihad Etisalat Co. Saudi Arabia 19.20 (2.1) 1,883.3 29.5 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% Doha Insurance Group 12.30 (5.4) 0.5 (12.1) Qatar First Bank 5.12 (3.0) 1,214.8 (21.6) Qatar National Cement Company 56.57 (2.4) 4.9 (10.1) Qatari German Co for Med. Dev. 5.17 (0.8) 17.7 (20.0) Qatar Gas Transport Co. Ltd. 16.79 (0.7) 1,061.3 4.3 QSE Top Value Trades Close* 1D% Val. ‘000 YTD% QNB Group 175.00 5.4 88,196.8 38.9 Qatar Islamic Bank 133.00 3.9 38,422.5 37.1 Industries Qatar 124.50 0.4 33,547.7 28.4 Qatar Fuel Company 146.00 (0.4) 23,344.8 43.1 Qatar Electricity & Water Co. 190.00 0.8 20,181.0 6.7 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* 9,825.11 1.8 2.3 8.9 15.3 100.87 148,296.9 14.8 1.5 4.5 Dubai 2,955.95 (0.3) 0.2 4.8 (12.3) 37.08 104,196.3 9.4 1.1 5.7 Abu Dhabi 4,859.45 0.3 0.3 6.6 10.5 58.46 132,639.3 12.7 1.4 4.9 Saudi Arabia 8,294.83 (0.2) (0.9) (0.2) 14.8 910.94 525,366.9 17.8 1.9 3.3 Kuwait 4,932.98 (0.2) (0.3) 1.4 2.2 72.40 34,056.0 15.4 0.9 4.0 Oman 4,336.55 0.4 0.0 (5.1) (15.0) 3.38 18,524.2 10.5 0.9 6.3 Bahrain 1,358.35 (0.9) (0.7) 3.6 2.0 3.06 20,845.3 8.5 0.9 6.0 Source: Bloomberg, Qatar Stock Exchange, Tadawul, Muscat Securities Market and Dubai Financial Market (** TTM; * Value traded ($ mn) do not include special trades, if any) 9,600 9,700 9,800 9,900 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 rose 1.8% to close at 9,825.1. The Banks & Financial Services and Real Estate indices led the gains. The index rose on the back of buying support from non-Qatari shareholders despite selling pressure from Qatari and GCC shareholders.  QNB Group and Dlala Brokerage & Investment Holding Company were the top gainers, rising 5.4% and 4.1%, respectively. Among the top losers, Doha Insurance Group fell 5.4%, while Qatar First Bank was down 3.0%.  Volume of shares traded on Tuesday rose by 20.8% to 10.2mn from 8.4mn on Monday. Further, as compared to the 30-day moving average of 7.1mn, volume for the day was 43.8% higher. Qatar First Bank and Vodafone Qatar were the most active stocks, contributing 12.0% and 10.5% 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) 2Q2018 % Change YoY Operating Profit (mn) 2Q2018 % Change YoY Net Profit (mn) 2Q2018 % Change YoY City Cement Co. Saudi Arabia SR – – 12.0 -11.2% 9.9 -20.1% United International Transportation Company Saudi Arabia SR – – 44.5 -7.2% 40.8 -4.3% Abdulmohsen Al Hokair Group for Tourism and Development# Saudi Arabia SR – – -1.2 N/A 3.1 -79.1% Al Gassim Investment Holding Co. Saudi Arabia SR – – 0.9 56.3% 1.0 37.9% National Medical Care Co. Saudi Arabia SR – – 25.9 14.2% 20.3 3.9% Middle East Paper Co. Saudi Arabia SR – – 36.5 40.1% 28.9 59.1% Al Yamamah Steel Industries Co. Saudi Arabia SR – – -1.3 N/A -5.6 N/A Dubai Insurance Co. Dubai AED 135.1 3.5% – – 18.6 52.8% Dubai Investments Dubai AED 652.8 11.3% – – 129.1 -32.4% Orient Insurance Dubai AED 1,011.5 -16.8% – – 88.8 20.6% Amlak Finance Dubai AED 105.5 18.1% – – 4.5 -2.6% Sharjah Cement and Industrial Development Co. Abu Dhabi AED 145.8 -15.6% – – 4.4 -77.6% Source: Company data, DFM, ADX, MSM, TASI, BHB. ( # Values in ‘000) Global Economic Data Date Market Source Indicator Period Actual Consensus Previous 07/31 EU Eurostat Unemployment Rate June 8.3% 8.3% 8.3% 07/31 EU Eurostat CPI Core YoY July 1.1% 1.0% 0.9% 07/31 Germany German Federal Statistical Office Retail Sales MoM June 1.2% 1.0% -2.1% 07/31 Germany German Federal Statistical Office Retail Sales YoY June 3.0% 1.5% -1.6% 07/31 Germany Deutsche Bundesbank Unemployment Change (000’s) July -6k -10k -14k 07/31 France INSEE National Statistics Office CPI MoM July -0.1% -0.2% 0.0% 07/31 France INSEE National Statistics Office CPI YoY July 2.3% 2.2% 2.0% 07/31 Japan Ministry of Internal Affairs and Communications Jobless Rate June 2.4% 2.3% 2.2% 07/31 Japan Ministry of Economy Trade and Industry Industrial Production MoM June -2.1% -0.3% -0.2% 07/31 Japan Ministry of Economy Trade and Industry Industrial Production YoY June -1.2% 0.6% 4.2% 07/31 China China Federation of Logistics & Purchasing Composite PMI July 53.6 – 54.4 07/31 China China Federation of Logistics & Purchasing Non-manufacturing PMI July 54.0 54.9 55.0 07/31 China China Federation of Logistics & Purchasing Manufacturing PMI July 51.2 51.3 51.5 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 26.16% 41.28% (54,781,964.05) Qatari Institutions 8.70% 17.31% (31,216,906.01) Qatari 34.86% 58.59% (85,998,870.06) GCC Individuals 0.55% 0.45% 358,369.67 GCC Institutions 1.31% 2.27% (3,484,097.98) GCC 1.86% 2.72% (3,125,728.31) Non-Qatari Individuals 6.56% 9.99% (12,418,200.05) Non-Qatari Institutions 56.73% 28.70% 101,542,798.42 Non-Qatari 63.29% 38.69% 89,124,598.37
  3. 3. Page 3 of 7 Earnings Calendar Tickers Company Name Date of reporting 2Q2018 results No. of days remaining Status MCCS Mannai Corporation 2-Aug-18 1 Due GISS Gulf International Services 5-Aug-18 4 Due QCFS Qatar Cinema & Film Distribution Company 5-Aug-18 4 Due MPHC Mesaieed Petrochemical Holding Company 6-Aug-18 5 Due MCGS Medicare Group 6-Aug-18 5 Due IGRD Investment Holding Group 6-Aug-18 5 Due MERS Al Meera Consumer Goods Company 7-Aug-18 6 Due QGMD Qatari German Company for Medical Devices 8-Aug-18 7 Due IQCD Industries Qatar 8-Aug-18 7 Due ZHCD Zad Holding Company 9-Aug-18 8 Due MRDS Mazaya Qatar Real Estate Development 13-Aug-18 12 Due Source: QSE News Qatar  QGRI reports net loss of QR1.07mn in 2Q2018 – Qatar General Insurance & Reinsurance Company (QGRI) reported a net loss of QR1.07mn in 2Q2018 as compared to a net loss of QR3.36mn in 2Q2017 and net profit of QR55.10mn in 1Q2018. In 1H2018, QGRI’s net profit widened to QR54.03mn from QR39.69mn in 1H2017. The company's net earned premiums came in at QR43.65mn in 2Q2018, which represents a decrease of 6.5% YoY (-1.5% QoQ). Loss per share amounted to QR0.01 in 2Q2018 as compared to loss per share of QR0.04 in 2Q2017 and earnings per share of QR0.63 in 1Q2018. (QSE)  DOHI posts 6.9% YoY increase but 75.3% QoQ decline in net profit in 2Q2018 – Doha Insurance Group’s (DOHI) net profit rose 6.9% YoY to QR6.91mn in 2Q2018. However, on a QoQ basis net profit declined 75.3%. In 1H2018, DOHI’s net profit widened to QR34.93mn from QR33.96mn for the comparable period of the previous year. The company's net premiums came in at QR72.50mn in 2Q2018, which represents an increase of 23.8% YoY. However, on a QoQ basis, net premiums declined 4.5%. EPS amounted to QR0.70 in 1H2018 as compared to QR0.68 in 1H2017. (QSE)  SIIS reports net loss of QR4.44mn in 2Q2018 – Salam International Investment Limited (SIIS) reported a net loss of QR4.44mn in 2Q2018 as compared to net losses of QR2.64mn in 2Q2017 and QR8.22mn in 1Q2018. In 1H2018, SIIS reported a net loss of QR12.66mn as compared to net profit of QR17.75mn in 1H2017. The company's operating income came in at QR625.43mn in 2Q2018, which represents a decrease of 18.0% YoY (-14.0% QoQ). Loss per share amounted to QR0.11 in 1H2018 as compared to earnings per share of QR0.16 in 1H2017. (QSE)  Fitch: Sector-wide government support for Qatari banks again in – The Qatari authorities' propensity to support domestic banks was again evidenced in 2017 with a cumulative $40bn deposit injection (June-December) in the banking system, Fitch Ratings (Fitch) stated. The Long-Term Issuer Default Ratings of all nine Fitch-rated Qatari banks are driven by an extremely high probability of support from the Qatari authorities, if needed. This reflects Qatar's strong ability to support its banks, as indicated by its rating (‘AA-’ /Stable), combined with Fitch’s belief that there would be a strong willingness to do so. Qatar enjoys a strong balance sheet and substantial holdings of foreign reserves, together resulting in sovereign net foreign assets of an estimated 141% of GDP in 2017. This is still sufficient to finance two decades of fiscal deficits. After easing in 1H2017, liquidity pressures re-emerged with the embargo on Qatar in June 2017 by Saudi Arabia and the UAE. Funding costs have risen by 20bp to 30bp as a result. The embargo has also reduced economic growth and pressured the real estate, contracting and hospitality sectors, to which Qatari banks are largely exposed. Banks' funding costs have increased since 2017 due to rising rates and the political GCC dispute. Banks have offset this pressure on profitability metrics by repricing their loan books and net interest margins have been kept almost flat. Banks have also managed their cost bases well and loan impairment charges have remained low, maintaining their overall profitability at levels that compare well with GCC peers. (Bloomberg)  QFC sees 69% jump in new firms in 1H2018 – Qatar Financial Centre (QFC) witnessed 69% YoY jump in new firms registered under it during the first half of this year. The total number of firms on the QFC platform was recorded as 532 at the end of 1H2018 ended June 30, 2018. The majority of the new firms joining the QFC platform have come from Europe, India and Pakistan. There has also been a number of firms joining from the US and Middle East and North Africa regions, according to QFC’s spokesman. The newly registered firms come from a wide variety of sectors including information technology, advisory and consulting, advertising and marketing, legal services and investment clubs. Since the first quarter of 2010, the QFC has experienced 322% growth in the number of firms joining its platform. In addition, since June 2017 the QFC has seen a notable increase in international firms looking to establish in Qatar. (Gulf-Times.com)  Qatar Chamber to implement ATA Carnet system from August 1 – Qatar Chamber will start from August 1, 2018 to officially implement the temporary export-import document system ATA Carnet in the admission of goods to the country, joining 77 other countries that employ the system. In a statement issued, Qatar Chamber stated that, as the entity concerned with the issuance and guaranteeing, it will begin to issue special registers to be available for the business community, noting that business owners and customers can apply for ATA Carnet either by visiting the chamber’s member affairs department or registering online on its website. The register is then issued in
  4. 4. Page 4 of 7 return for a fixed fee and is valid for a year for commercial samples and six months for on-display goods and professional equipment. The implementation of the system in cooperation with the General Authority of Customs and the International Chamber of Commerce (ICC) Qatar is one of the important steps that will enhance Qatar’s status as an attractive investment destination and a global center for trade and business, Qatar Chamber stated, adding that this will stimulate the conference and tourism sector and support Qatar’s readiness to host the 2022 World Cup. (Peninsula Qatar)  Qatar’s real estate trading volume exceeds QR467mn in a week – The trading volume of registered real estates in Qatar between July 22 to July 26 at the Ministry of Justice’s Real Estate Registration Department stood at QR467,720,606. The department’s weekly report stated that the trading included empty lands, residential units, residential buildings, residential complexes, commercial buildings and multipurpose building. Most of the trading took place in Doha, Al Daayen, Al Rayyan, Umm Salal, Al Wakrah, Al Khor, Al Thakhira and Al Sheehaniya. The trading volume of registered real estates in between July 15 to July 19 was 457,237,953. (Gulf-Times.com)  Petrol and diesel prices to remain unchanged in August – Qatar Petroleum (QP) announced that there will be no change in the fuel prices for August 2018. QP set the diesel price for August at QR2.05 per liter, super gasoline (95) at QR2.05 per liter and the price for premium gasoline (91) at QR2 per liter. The prices remain unchanged from the month of July. (Gulf-Times.com)  Qatar leads GCC bonds & Sukuk issuance in 1H2018 – The aggregate primary issuance of bonds and Sukuk by GCC entities, including central banks local issuances, GCC sovereign and corporate issuances, totaled $95.25bn in 1H2018, 9.64% increase from the total amount raised in 1H2017. Qatar led the GCC issuances in terms of total value raised, Kuwait Financial Centre (Markaz) noted in its ‘GCC Bonds & Sukuk Market Survey.’ Central bank local issuances are fixed income securities issued by GCC central banks in local currencies and with short maturities for the purpose of regulating levels of domestic liquidity. During 1H2018, a total of $32.77bn was raised by the GCC central banks, namely by the Central Bank of Kuwait, Qatar, Bahrain, and Oman. Qatari issuers led the GCC in 1H2018, raising a total of $19.97bn through 47 issuances and representing 31.9% of the total value raised in the GCC. (Peninsula Qatar)  Rising supply of office space brings rents down – Qatar’s real estate market is set to witness an additional office supply of office space of over 720,000 square meters Gross Leasable Area (GLA) in 2018 to the existing stock of 3.89mn square meters, taking the total to 4.61mn square meters by the end of this year. The additional office supply to the existing stock is likely to put further pressure on the asking rents for office space. Some analysts said that more affordable rents will attract new companies and investors to expand and establish new businesses in Qatar. The growth in office supply is expected to continue in 2019 adding even more space of about 740,000 square meters, taking the total stock to 5.35mn square meters (GLA) by the end of the year, according to the latest market review by ValuStrat, a leading consulting firm. Projected supply for 2018 has been adjusted downward from 960,000 square meters to 720,000 square meters due to delayed deliveries. (Peninsula Qatar)  Qatar to award $85bn worth of projects in coming years – Qatar is set to award an estimated $85bn worth of planned projects in the coming years. Out of these planned, but un-awarded projects, about $9.1bn worth projects are under study, $31.7bn of projects are at some stage of tendering while $44bn of projects are in designing stage. About $12.1bn of projects are planned or under way in the oil and gas project market. Upstream projects account for the biggest share of oil and gas projects in Qatar, about 55%. Upstream and downstream together account for more than 90% of the oil and gas projects market in Qatar with a combined value of $20bn share by value, leading market and business intelligence platform MEED revealed. According to MEED, Qatar’s ten biggest construction clients together have about $55.1bn worth of projects in execution. Qatari Diar is the biggest project client in Qatar by value of projects in execution, with about $18.5bn of projects under construction. Barwa Real Estate Company is Qatar’s second biggest construction client with about $10.9bn worth of projects under construction. (Peninsula Qatar)  Qatar, Ukraine sign MoU to raise maritime cooperation – Qatar and Ukraine signed a memorandum of understanding (MoU) on cooperating in the ports and maritime transport sector. The deal is aimed at promoting joint work between both sides in the vital field of sea transport. During the meeting, the ministers discussed cooperation aspects between both countries in the ports and maritime transport sector and the exchange of expertise in this vital field. The meeting also discussed opening new maritime routes between the ports of both countries, in addition to investment opportunities in the ports sector. Besides, the meeting discussed cooperation methods and investment aspects in the aviation industry and a number of topics of common interest to both countries. (Gulf-Times.com)  Governor: QCB mulling matter of virtual currencies – Qatar Central Bank (QCB) is adapting to the new digi-banking trends like biometric-enabled ATM among others. Along with the latest technologies in banking, QCB is considering the topic of virtual currencies. Qatar is expected to have the fastest growth rate for the digital transformation industry in the BFSI sector from 2015 to 2020. QCB’s Governor, Sheikh Abdullah Bin Saud Al Thani made the remark as he delivered a speech on Qatar’s plans to build a hub for financial technology. He said the central bank would not focus on a single virtual currency but would look at how to set best practice for such currencies. (Qatar Tribune) International  US consumer spending rises; wage growth slows in second- quarter – US consumer spending increased solidly in June as households spent more at restaurants and on accommodation, building a strong base for the economy heading into the third quarter, while inflation rose moderately. Other data showed employers boosting benefits for workers in the second quarter, but wage growth slowed down. With savings at lofty levels and lower taxes increasing take-home pay for some workers, spending is likely to remain strong this year. Accelerating home prices, which are boosting wealth for some households, should also underpin consumption. The Commerce Department stated
  5. 5. Page 5 of 7 consumer spending, which accounts for more than two-thirds of US economic activity, rose 0.4% last month. Data for May was revised up to show consumer spending advancing 0.5% instead of the previously reported 0.2% gain. (Reuters)  Trump to propose 25% tariff on $200bn of Chinese imports – The Trump administration plans to propose slapping 25% tariff on $200bn of imported Chinese goods after initially setting them at 10%, in a bid to pressure China into making trade concessions, according to sources. President Donald Trump’s administration stated on July 10 it would seek to impose the 10% tariffs on thousands of Chinese imports. (Reuters)  Mood among UK consumers, firms remains fragile – Confidence among British consumers and businesses remains stuck well below levels before the Brexit vote in 2016, surveys showed, two days before an expected interest rate increase by the Bank of England. Britain’s headline gauge of consumer confidence, compiled by market research firm GfK for the European Commission, edged down -10 in July from -9 in June, a touch weaker than expected by economists who took part in a Reuters poll. (Reuters)  Germany’s labor market loses steam in July – Germany’s jobless numbers dropped by less than expected in July, data showed, reflecting a cooling economy. The Federal Labor Office stated the seasonally adjusted jobless total fell by 6,000 to 2.338mn. That compared with an expected drop of 10,000 forecast in a Reuters poll. The unemployment rate was unchanged at 5.2%, the lowest since German reunification in 1990. A robust labor market has been the backbone of a consumption-led upswing in Europe’s largest economy, which went through a soft patch at the start of the year. (Reuters)  Greece’s May retail sales rise 4.6% YoY, led by department stores – Greece’s retail sales by volume rose 4.6% in May compared to the same month last year after an upwardly revised 1.5% increase in April, statistics service ELSTAT stated. Retail sales were led higher by department stores and furniture and house apparel, the data showed. Greece’s economy grew for a fifth straight quarter in January-to-April, helped by stronger exports. Gross domestic product expanded 0.8% in the first quarter, accelerating from an upwardly revised 0.2% in 4Q2017. The EU Commission sees the economy growing by 1.9% this year, while the International Monetary Fund projects growth of 2.0%. (Reuters)  Greece on path to successfully exit bailouts, says IMF – Greece is on a path to successfully exit its international bailouts, but the country needs further economic and banking reforms, according to the International Monetary Fund (IMF). The last of Greece’s three international bailout packages, worth a combined $318.2bn since 2010, is due to expire on August 20. The IMF’s executive board praised Greek authorities for ‘important reforms and policy choices in recent years’ that have helped balance the government’s budget, stabilized the banking sector and restored growth. Greek unemployment is down from post-crisis highs but remains by far the highest in the Eurozone at 20.2%, European statistics agency Eurostat reported. The Greek economy grew 1.4% last year, with the IMF projecting gross domestic product (GDP) expansion of 2% this and 2.4% next year, helping to lower the jobless rate. (Qatar Tribune)  Asian factories slow as China-US trade conflict intensifies – Manufacturing activity across Asia slowed in July, deepening concerns about the region’s economic outlook as an intensifying trade conflict between the US and China sent shudders through their trading partners. A survey of purchasing managers released showed China’s manufacturing sector grew at its slowest pace in eight months in July, with new export orders suffering the worst slump since mid-2016. (Reuters)  Japan July manufacturing activity, new orders slow – Japanese manufacturing activity slowed less than initially reported in July, a revised survey showed, but there are lingering concerns about the economy due to the reduced pace at which new orders increased. The final Markit/Nikkei survey for Japan showed the manufacturing Purchasing Managers’ Index (PMI) was a seasonally adjusted 52.3. That was an upward revision from the flash reading of 51.6, which was the lowest in more than one and a half years. In June, the index was 53.0. The index remained above the 50 threshold that separates expansion from contraction for the 23rd consecutive month. (Reuters)  Brazil’s jobless rate drops to 12.4% in quarter through June – Brazil’s unemployment rate declined more than expected in the quarter ending in June, a sign that an underwhelming economic recovery is finally trickling down to workers. The jobless rate fell to 12.4% from 13.1% in the three months through March, government statistics agency IBGE stated. Economists polled by Reuters expected a median 12.6% rate. (Reuters) Regional  GCC hospitality market expected to grow at 7.2% to $32.5bn by 2022 – The GCC hospitality market is expected to grow at 7.2% to $32.5bn by 2022 on the back of upcoming mega events and government initiatives to boost tourism, according to Alpen Capital. Growth in hospitality sector revenue of individual GCC countries is expected to range from 6% to 12%, it stated in a report. Both the UAE and Qatar are set to witness high revenue growth on significant investment activities in the tourism and hospitality sector for the upcoming Expo 2020 and FIFA World Cup 2022, it said, adding Bahrain and Oman are also expected to grow at a rate higher than the GCC average. The average GCC occupancy is expected to increase from 62% in 2017 to 68% in 2022. The average daily rate (ADR) is expected to increase at 1.1% to $161 in 2022, whereas the revenue per available room is expected to increase at 2.9% to $109 in 2022. (Gulf-Times.com)  UAE, Middle East business confidence rebounds – The UAE and the Middle East as a whole are bucking global trends, with business confidence rising to its highest level since 2Q2015, according to Association of Chartered Certified Accountants (ACCA) and Institute of Management Accountants (IMA). Within the UAE, confidence moved from a negative outlook in the first quarter to a positive one. The Middle East region remains negative, but has improved significantly. The key factor for the Middle East was the rise in oil prices. “The higher oil price has caused an increase in fiscal revenues, which has led to an easing in fiscal austerity,” the report noted. (GulfBase.com)  Gulf region’s e-commerce market to hit $20bn by 2020 – Based on industry reports, the Gulf region’s e-commerce market is expected to expand to $20bn by the end of 2020, while the
  6. 6. Page 6 of 7 projected growth for the conventional retail market size is $206bn for the same period. Jayaraman Nair, Chairman, VIS Exhibitions and Conferences, organizer of the trade show Smart Stores Expo, said, “While more and more consumers nowadays are increasingly enjoying the benefits of online shopping, physical stores still have a lot to offer that their online counterparts cannot provide. The key here is for brick and mortar retailers to reinvent themselves and create better in- store experiences for their shoppers.” (GulfBase.com)  Saudi Arabian start-ups raise SR11.66mn funding in 2Q2018 – The technology start-ups incubated by the Badir Program successfully raised around SR11.66mn in 2Q2018, up by 7.66% from the previous quarter when SR10.83mn was raised, according to a report released by Badir Program. After a relatively strong first quarter, the funding scene in Saudi Arabia was able to keep pace in the second quarter of 2018, showing strong signs of ecosystem growth in the Saudi Arabian market, according to report. The report revealed that individual investors were the most active in terms of funding size, having pumped SR7.45mn into startups across four deals in 2Q2018. They were followed by venture capital firms with two deals reaching a combined total of SR1.40mn, the funding of the private sector companies reached to SR2.80mn approximately through one funding deal. The data showed that the total funding has been increased to SR150.951mn since the establishment of Badir program in 2008 until the end of June 2018. (GulfBase.com)  PIF aims to raise between $6-8bn in first loan – Saudi Arabia’s top sovereign wealth fund is seeking to raise between $6 and $8bn from banks as it seeks to boost its firepower to help finance the Kingdom’s economic transformation plans, according to sources. Public Investment Fund (PIF) issued a request for proposals to banks several weeks ago about raising money for a syndicated loan, though the deal is not expected to close before September. (Reuters)  VAT refund for tourist to open doors for further growth in the UAE – United Arab Emirates is the most preferred tourist destination in the Middle East and to continue its positive momentum, tourists visiting the country will be entitled to claim back any Value Added Tax (VAT) payments they are charged. “The UAE has become a regional magnet for foreign investors and tourists, and the move to refund VAT, yet again shows UAE’s strategic ability to drive the growth of the country,” said Tejas Goenka, Executive Director of Tally Solutions. (GulfBase.com)  UAE, Indonesia sign MoU to boost halal industry, promote trade exchange – The Emirates Authority for Standardization and Metrology (ESMA) signed a Memorandum of Understanding (MoU) with Indonesia’s National Standardization Agency and National Accreditation Committee to officially recognize halal certificates issued by National Accreditation Committee. ESMA’s Director-General, Abdulla Abdul Qader Al Maeeni said that the cooperation will harmonize the standard for halal in the two countries and help increase bilateral trade between UAE and Indonesia. He added that cooperation between the two countries would increase the volume of bilateral trade, especially as the official data indicate that the volume of trade exchange between the UAE and Indonesia is about $3.7bn and target the increase of $5.5bn. (GulfBase.com)  NASDAQ Dubai to launch futures trading of 12 Saudi Arabian firms from September – NASDAQ Dubai will launch equity futures trading of 12 Saudi Arabian companies from September, stimulating investor interest in the Kingdom’s capital markets. NASDAQ Dubai, which launched UAE futures trading in 2016, had announced in May this year it would add Saudi Arabian single futures. It identified the 12 Saudi Arabian companies, which have a combined market capitalization of SR859bn, representing 43% of the Saudi Arabian stock exchange. The companies are Saudi Basic Industries Corp. (SABIC), Al Rajhi Bank, Alinma Bank, Almarai Company, Dar Al Arkan Real Estate Development Co, Etihad Etisalat Company, Rabigh Refining and Petrochemical Co, Saudi Arabian Mining Company, Saudi Cement Company, Saudi Electricity Company, Saudi Kayan Petrochemical Company and Altayyar Travel Group. (Reuters)  ADIB plans to raise $1bn from rights issue and Sukuk sale – Abu Dhabi Islamic Bank (ADIB) is planning to raise about $1bn from a rights share issue and a Sukuk sale. The bank’s board proposed selling 464mn shares at AED1 each and AED1.16 premium. It also proposed raising $750mn from a perpetual Tier 1 Sukuk and repaying a $1bn Sukuk sold in 2012. ADIB is doing the deals to maintain its growth trajectory, while maintaining a solid capital buffer, ADIB’s Vice-Chairman and acting CEO, Khamis Buharoon said. (Gulf-Times.com)  Kuwait places revival of budget transformation as its top priority – Kuwait’s Minister of Finance, Nayef Al-Hajraf disclosed that the ministry has placed on top of its priorities the revival of budget transformation from bonds and clauses to programs and performance, especially as the current method of preparing budget constitutes an impediment that slows down the wheel of financial and economic reform activities. Sources said this step is coming in the framework of moving toward restructuring the role of the Ministry of Finance, which is important considering the ministry had been implementing Decree Number 31/1978 concerning regulations governing the preparation of public budget, and monitoring its implementation and final accounts. With the consistent economic changes experienced in Kuwait at the moment, it is pertinent to restructure the responsibility of the ministry in a way suitable for the anticipated financial and economic reform plans. (GulfBase.com)  KUFPEC taps banks for $1.1bn loan in shale push – Kuwait Foreign Petroleum Exploration Company (KUFPEC) is borrowing $1.1bn to spend on oil and natural gas projects as the company plans to expand its shale operations, KUFPEC’s CEO, Sheikh Nawaf Saud Al-Sabah said. Sumitomo Mitsui Banking Corp and Societe Generale were the joint lead arrangers of the five-year loan for KUFPEC, a unit of state-run Kuwait Petroleum Corp, Al-Sabah said. The new financing includes a two-year grace period and is in addition to $3.5bn that KUFPEC has borrowed from banks since 2013. The company will finish repaying the $3.5bn next year, he said. (Gulf-Times.com)
  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 ( # Market closed on July 31, 2018) Source: Bloomberg (*$ adjusted returns) 40.0 60.0 80.0 100.0 120.0 Jun-14 Jun-15 Jun-16 Jun-17 Jun-18 QSEIndex S&P Pan Arab S&P GCC (0.2%) 1.8% (0.2%) (0.9%) 0.4% 0.3% (0.3%) (1.0%) 0.0% 1.0% 2.0% SaudiArabia Qatar Kuwait Bahrain Oman AbuDhabi Dubai Asset/Currency Performance Close ($) 1D% WTD% YTD% Global Indices Performance Close 1D%* WTD%* YTD%* Gold/Ounce 1,224.09 0.2 0.1 (6.1) MSCI World Index 2,153.10 0.2 (0.1) 2.4 Silver/Ounce 15.52 0.2 0.2 (8.4) DJ Industrial 25,415.19 0.4 (0.1) 2.8 Crude Oil (Brent)/Barrel (FM Future) 74.25 (1.0) (0.1) 11.0 S&P 500 2,816.29 0.5 (0.1) 5.3 Crude Oil (WTI)/Barrel (FM Future) 68.76 (2.0) 0.1 13.8 NASDAQ 100 7,671.79 0.5 (0.8) 11.1 Natural Gas (Henry Hub)/MMBtu# 2.72 0.0 (2.2) (23.2) STOXX 600 391.61 0.1 0.3 (2.0) LPG Propane (Arab Gulf)/Ton 95.50 (2.1) (1.3) (3.5) DAX 12,805.50 (0.0) (0.0) (3.5) LPG Butane (Arab Gulf)/Ton 106.00 (1.6) 0.2 (2.3) FTSE 100 7,748.76 0.5 0.7 (2.2) Euro 1.17 (0.1) 0.3 (2.6) CAC 40 5,511.30 0.3 0.4 1.0 Yen 111.86 0.7 0.7 (0.7) Nikkei 22,553.72 (0.7) (1.5) (0.2) GBP 1.31 (0.1) 0.1 (2.9) MSCI EM 1,087.46 (0.2) (0.4) (6.1) CHF 1.01 (0.2) 0.4 (1.6) SHANGHAI SE Composite 2,876.40 0.2 (0.0) (17.0) AUD 0.74 0.2 0.3 (4.9) HANG SENG 28,583.01 (0.5) (0.8) (4.9) USD Index 94.55 0.2 (0.1) 2.6 BSE SENSEX 37,606.58 0.5 1.0 3.0 RUB 62.52 0.4 (0.4) 8.5 Bovespa 79,220.43 (1.8) (1.5) (8.5) BRL 0.27 (0.7) (1.2) (11.8) RTS 1,173.06 0.9 1.9 1.6 84.1 81.5 71.7

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