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QNBFS Daily Market Report November 1, 2018

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The QSE Index rose 1.4% to close at 10,300.9.

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QNBFS Daily Market Report November 1, 2018

  1. 1. Page 1 of 7 QSE Intra-Day Movement Qatar Commentary The QSE Index rose 1.4% to close at 10,300.9. Gains were led by the Banks & Financial Services and Real Estate indices, gaining 3.2% and 2.6%, respectively. Top gainers were QNB Group and Ezdan Holding Group, rising 5.4% and 4.2%, respectively. Among the top losers, Qatar Cinema & Film Distribution Company fell 6.1%, while Qatar Navigation was down 2.7%. GCC Commentary Saudi Arabia: The TASI Index rose 0.9% to close at 7,907.0. Gains were led by the Media and Entertainment and Energy indices, rising 3.9% and 2.3%, respectively. Saudi Fisheries Co. and Tihama Advertising & Public Relations Co. were up 9.9% each. Dubai: The DFM General Index gained 1.5% to close at 2,784.6. The Real Estate & Const. index rose 2.7%, while the Insurance index gained 1.4%. Arabtec Holding rose 5.8%, while Emaar Properties was up 4.1%. Abu Dhabi: The ADX General Index rose 0.9% to close at 4,901.9. The Consumer Staples index gained 3.0%, while the Telecom. index rose 2.4%. Ras Al Khaimah White Cement gained 14.8%, while National Bank of Ras Al-Khaimah was up 4.6%. Kuwait: The Kuwait Main Market Index declined 0.1% to close at 4,693.7. The Consumer Services index fell 1.0%, while the Basic Materials index declined 0.1%. Kuwait Finance & Inv. fell 10.5%, while Al Mudon Intl. Real Estate was down 9.5%. Oman: The MSM 30 Index rose 0.1% to close at 4,422.9. Gains were led by the Financial and Industrial indices, rising 0.3% and 0.1%, respectively. Al Sharqia Investment Holding rose 2.2%, while Oman Fisheries was up 1.3%. Bahrain: The BHB Index gained 0.1% to close at 1,314.7. The Services index rose 0.4%, while the Commercial Banks index gained 0.2%. Bahrain Commercial Facilities Co. rose 1.3%, while BBK was up 0.9%. QSE Top Gainers Close* 1D% Vol. ‘000 YTD% QNB Group 195.00 5.4 505.9 54.7 Ezdan Holding Group 10.94 4.2 417.9 (9.4) Ooredoo 68.88 3.6 298.5 (24.1) Salam International Inv. Ltd. 4.76 3.0 4.0 (30.9) Qatar Insurance Company 36.70 2.5 241.3 (18.9) QSE Top Volume Trades Close* 1D% Vol. ‘000 YTD% Vodafone Qatar 8.21 (0.5) 759.6 2.4 Gulf International Services 17.95 (2.1) 749.7 1.4 QNB Group 195.00 5.4 505.9 54.7 Qatar First Bank 4.36 0.5 425.6 (33.2) Ezdan Holding Group 10.94 4.2 417.9 (9.4) Market Indicators 31 Oct 18 30 Oct 18 %Chg. Value Traded (QR mn) 329.9 224.9 46.7 Exch. Market Cap. (QR mn) 580,501.0 567,631.5 2.3 Volume (mn) 7.3 6.6 10.0 Number of Transactions 3,750 3,871 (3.1) Companies Traded 43 41 4.9 Market Breadth 22:18 12:24 – Market Indices Close 1D% WTD% YTD% TTM P/E Total Return 18,149.07 1.4 1.5 27.0 15.2 All Share Index 3,044.12 2.0 1.6 24.1 15.4 Banks 3,786.54 3.2 3.3 41.2 14.2 Industrials 3,360.95 0.5 (0.3) 28.3 16.0 Transportation 2,101.74 (1.5) (2.8) 18.9 12.2 Real Estate 1,926.12 2.6 1.5 0.6 17.3 Insurance 3,106.93 1.6 1.2 (10.7) 18.5 Telecoms 954.75 1.9 0.7 (13.1) 38.7 Consumer 6,968.77 (0.2) 0.2 40.4 14.3 Al Rayan Islamic Index 3,896.16 0.5 0.7 13.9 15.2 GCC Top Gainers ## Exchange Close # 1D% Vol. ‘000 YTD% Saudi Cement Co. Saudi Arabia 41.70 8.9 611.9 (12.1) Yanbu Cement Co. Saudi Arabia 21.80 7.6 1,367.1 (35.5) Southern Prov. Cement Saudi Arabia 34.95 6.2 606.9 (27.8) QNB Group Qatar 195.00 5.4 505.9 54.7 Saudi Kayan Petrochem. Saudi Arabia 15.40 5.2 18,151.6 44.2 GCC Top Losers ## Exchange Close # 1D% Vol. ‘000 YTD% Al Ahli Bank of Kuwait Kuwait 0.29 (2.4) 17.1 (0.3) Kingdom Holding Co. Saudi Arabia 7.90 (2.3) 785.9 (11.6) DP World Dubai 17.99 (1.9) 508.5 (28.0) Human Soft Holding Co. Kuwait 3.05 (1.5) 246.2 (18.4) Mobile Telecom. Co. Saudi Arabia 6.32 (1.3) 4,326.4 (13.5) 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% Qatar Cinema & Film Distribution 15.02 (6.1) 0.2 (39.9) Qatar Navigation 71.05 (2.7) 51.2 27.0 Gulf International Services 17.95 (2.1) 749.7 1.4 Al Khaleej Takaful Insurance Co. 9.00 (1.6) 1.0 (32.0) Qatari German Co for Med. Dev. 4.70 (1.3) 6.0 (27.2) QSE Top Value Trades Close* 1D% Val. ‘000 YTD% QNB Group 195.00 5.4 98,002.4 54.7 Industries Qatar 139.99 0.4 53,493.0 44.3 Qatar Islamic Bank 153.00 2.3 27,101.6 57.7 Ooredoo 68.88 3.6 20,090.4 (24.1) Gulf International Services 17.95 (2.1) 13,505.1 1.4 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* 10,300.92 1.4 1.5 5.0 20.9 90.26 159,463.6 15.2 1.5 4.2 Dubai 2,784.60 1.5 1.8 (1.8) (17.4) 77.71 99,366.8 7.4 1.0 6.3 Abu Dhabi 4,901.87 0.9 0.4 (0.7) 11.4 63.83 134,026.0 13.0 1.4 4.9 Saudi Arabia 7,907.01 0.9 0.9 (1.2) 9.4 998.41 501,688.7 16.3 1.8 3.5 Kuwait 4,693.72 (0.1) (0.1) (0.9) (2.8) 51.91 32,080.0 14.8 0.9 4.4 Oman 4,422.91 0.1 (0.7) (2.7) (13.3) 8.86 13,502.1 10.4 0.8 6.2 Bahrain 1,314.73 0.1 (0.1) (1.8) (1.3) 12.89 20,344.9 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) 10,100 10,150 10,200 10,250 10,300 10,350 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 1.4% to close at 10,300.9. The Banks & Financial Services and Real Estate indices led the gains. The index rose on the back of buying support from GCC and non-Qatari shareholders despite selling pressure from Qatari shareholders.  QNB Group and Ezdan Holding Group were the top gainers, rising 5.4% and 4.2%, respectively. Among the top losers, Qatar Cinema & Film Distribution Company fell 6.1%, while Qatar Navigation was down 2.7%.  Volume of shares traded on Wednesday rose by 10.0% to 7.3mn from 6.6mn on Tuesday. Further, as compared to the 30-day moving average of 6.1mn, volume for the day was 20.8% higher. Vodafone Qatar and Gulf International Services were the most active stocks, contributing 10.4% and 10.3% 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 City Cement Co. Saudi Arabia SR 65.3 -38.3% -1.2 N/A -2.4 N/A Knowledge Economic City Saudi Arabia SR 17.5 319.8% -12.9 N/A -12.7 N/A Taiba Holding Co. Saudi Arabia SR 134.6 2.4% 75.8 13.8% 60.1 -3.0% Advanced Petrochemical Company Saudi Arabia SR 744.9 20.9% 190.6 -2.5% 202.2 -3.0% Middle East Paper Company Saudi Arabia SR 215.6 1.3% 36.9 33.3% 30.2 35.8% Saudi Advanced Industries Co. Saudi Arabia SR 12.9 10.6% 11.8 13.8% 12.3 24.7% Aramex Dubai AED 1,239.0 8.0% – – 113.0 38.0% National Corporation for Tourism & Hotels Abu Dhabi AED 161.2 -4.2% – – 13.3 -20.9% United Insurance Company Abu Dhabi AED 44.6 184.2% – – 1.8 N/A Abu Dhabi National Insurance Company Abu Dhabi AED 413.1 2.4% – – 68.2 36.3% Bahrain Commercial Facilities Company Bahrain BHD – – – – 16.1 11.6% Source: Company data, DFM, ADX, MSM, TASI, BHB. Global Economic Data Date Market Source Indicator Period Actual Consensus Previous 10/31 US Mortgage Bankers Association MBA Mortgage Applications 26-October -2.5% – 4.9% 10/31 UK GfK NOP (UK) GfK Consumer Confidence October -10 -10 -9 10/31 EU Eurostat Unemployment Rate September 8.1% 8.1% 8.1% 10/31 EU Eurostat CPI Core YoY October 1.1% 1.1% 0.9% 10/31 EU Eurostat CPI Estimate YoY October 2.2% 2.2% 2.1% 10/31 France INSEE National Statistics Office CPI MoM October 0.1% 0.2% -0.2% 10/31 France INSEE National Statistics Office CPI YoY October 2.2% 2.3% 2.2% 10/31 Japan METI Industrial Production MoM September -1.1% -0.3% 0.2% 10/31 Japan METI Industrial Production YoY September -2.9% -2.1% 0.2% 10/31 Japan METI Consumer Confidence Index October 43.0 43.5 43.4 10/31 China China Federation of Logistics Non-manufacturing PMI October 53.9 54.6 54.9 10/31 China China Federation of Logistics Manufacturing PMI October 50.2 50.6 50.8 10/31 China China Federation of Logistics Composite PMI October 53.1 – 54.1 10/31 India India Central Statistical Org. Eight Infrastructure Industries September 4.3% – 4.7% 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 15.09% 41.25% (86,286,593.73) Qatari Institutions 7.15% 9.49% (7,708,506.65) Qatari 22.24% 50.74% (93,995,100.38) GCC Individuals 0.43% 0.34% 283,052.85 GCC Institutions 8.35% 1.71% 21,925,125.35 GCC 8.78% 2.05% 22,208,178.20 Non-Qatari Individuals 4.84% 5.84% (3,299,127.07) Non-Qatari Institutions 64.14% 41.38% 75,086,049.25 Non-Qatari 68.98% 47.22% 71,786,922.18
  3. 3. Page 3 of 7 News Qatar  QSE listed companies reported QR31.1bn net profits in 3Q2018 – All listed companies (45 companies) at Qatar Stock Exchange (QSE) have disclosed their financial statements results for the nine months’ period ended September 30, 2018. The combined net profit of all companies as of September 30, 2018 amounted to QR31.1bn as compared to QR29.2bn for the corresponding period in 2017, with an increase of 6.74%. The financial statements for all listed companies can be found on the QSE website. (QSE)  Qatar’s central bank foreign reserves rose to QR169.2bn in September – Qatar’s central bank foreign reserves rose to QR169.2bn in September, 2018 as compared to QR129.6bn in September 2017 and QR166.4bn in August 2018, according to the data published by Qatar’s central bank. (Bloomberg)  Middle East funds positive on Qatar and Kuwait, but wary on Saudi Arabia – Middle East funds have become more wary, but not outright bearish toward Saudi Arabia’s stock market due to according to a monthly Reuters poll. Foreign investors, including those from other Gulf States, were net sellers of Saudi equities for most of this month, partly because of recent developments. Fund managers are slightly positive on balance towards stock markets in Qatar and Kuwait. Qatar’s stock index has jumped 20.9% so far this year to 18-month highs, partly on the back of inflows of foreign investment, Amwal’s Head of Asset Management, Talal Samhouri said. “We expect Qatar to enjoy this inflow for the next couple of months, but then we believe that Kuwait will start attracting foreign investors and regional attention,” he added. Kuwait is in the process of joining FTSE Russell’s Emerging Market Index and MSCI will decide next year whether to add Kuwait to its own version of that index. Gulf investors sold a net $147mn of Saudi stocks last week, after net sales of $98mn in the previous week and $28mn in the week before that, according to exchange data. (Peninsula Qatar)  Qatar Airways to ‘stay with’ deal for Boeing 737 MAX 8 aircraft – Qatar Airways will stay with its agreement with Boeing for the delivery of some 60 ‘737 MAX 8 aircraft’, which includes firm and options, according to Qatar Airways’ CEO, Akbar Al- Baker. Asked whether Qatar Airways will review its order for the ‘737 MAX 8 aircraft’ in the light of the recent Lion Air crash in Indonesia, Al-Baker said, “Any aircraft that comes into a mishap is a great concern for the entire airline community. But let us not jump to conclusions.” Lion Air’s Boeing 737 MAX flight from Jakarta to Pangkal Pinang went missing 13 minutes after take-off on October 29. It crashed into the sea, news agency Reuters reported, citing Indonesian authorities. Al- Baker noted that “aeroplanes don’t get certified if there are any issues relating to their safety.” (Gulf-Times.com)  ICC Qatar holds meeting to discuss banking safeguards, procedures – The International Chamber of Commerce Qatar (ICC Qatar) Banking Commission held a meeting last week to discuss Qatar Central Bank’s procedures on bank guarantees and the recommendations of the ICC Banking Commission’s Global Technical meeting recently held in Tbilisi, Georgia. ICC Banking Commission’s Vice-Chairman, Ghassan Azar, who attended the event in Georgia, presided over the meeting held at Qatar Chamber and highlighted topics discussed during the technical meeting, including the launch of the ICC Digital Road Map, survey report on the legal status of electronic bills, and e- compatibility of ICC rules. QNB Group has led the commission for over two years. Azar said attendees at the global technical meeting lauded the ICC Qatar Banking Commission’s response to the third suggested draft of the eUCP (electronic uniform customs & practices) and the eURC (electronic uniform rules for collections). Director of International Relations and Chamber Affairs, Sheikha Tamader Al-Thani also attended the meeting, which provided the participants insight and updates on the courses offered by the ICC Academy. The meeting also allowed the commission members to address banking-related issues the industry has encountered recently. (Gulf-Times.com)  High demand for Spanish agro-food products – Demand for Spanish agro-food products in Qatar has seen a meteoric rise as agro exports of Spain to Qatar increased 49% in the first eight months of this year, according to Miguel Angel Fajardo, Commercial Attaché at the Spanish Embassy. “From an economic point of view and in trade terms, the agro-food sector is one of the most dynamic chapters of Spain’s exports to Qatar. Since 2012, agro-food sector export from Spain to Qatar had an annual growth rate of 40% in 2013,” Fajardo said. “Our agro- food sector is growing faster than the rest of the chapters of our exports. Last year, our agro export to Qatar grew by 63% compared to 2016 and in the first eight months of 2018 the growth rate is around 49%, breaking all records,” he said. The main categories of agro products Spain is exporting to Qatar which are currently available in the market include meat products, fruits and vegetables, beverage and oils, as well as animal feed, which had seen huge growth because of Qatar’s strategy to bring livestock to the country, Fajardo added. (Peninsula Qatar)  Woqod opens petrol stations in Al Froosh and Fereej Al Soudan – Qatar Fuel Company (Woqod) opened the Al Froosh petrol station and one mobile station in Fereej Al Soudan, raising its network of various petrol stations to 74. (Gulf-Times.com)  The second edition of INDEX Qatar will begin in less than two weeks' time – The countdown to INDEX Qatar 2018 is underway, with less than two weeks to go until the three-day interiors show returns to Doha. Supported by the Qatar Tourism Authority and against a backdrop of sustained growth for the fit-out market across the country, INDEX Qatar will gather hundreds of international product manufacturers, interior design firms, and other visitors at the Doha Exhibition and Convention Center (DECC) from 13th to 15th November 2018. Last year’s debut exhibition showcased the products and services of over 86 exhibitors from 17 countries, and the 2018 edition will see even more major players from across the industry taking part. The exhibition is expected to attract close to 5,000 people from across all parts of the Qatari and international design community - from interior designers and architects to project managers, importers and distributors - across retail, hospitality, residential and commercial design sectors, as well as the general public. Qatar is a booming market for global suppliers, too, with international companies being particularly well-represented at the exhibition. (Zawya)
  4. 4. Page 4 of 7 International  US private payrolls rise in October; wages increase in third quarter – US private sector payrolls increased by the most in eight months in October, suggesting overall job growth accelerated this month after Hurricane Florence weighed on restaurant and retail employment in September. The strong jobs market is gradually putting upward pressure on compensation, with other data on October 31 showing a solid increase in labor costs in the third quarter. Labor market strength is expected to underpin economic growth, despite weak housing, slowing business investment and stock market turmoil. The ADP national employment report showed private sector employment rose by 227,000 jobs last month, the biggest gain since February and beating economists’ expectations for an increase of 189,000. September’s payrolls count was revised down to 218,000 from 230,000. The ADP report is jointly produced with Moody’s Analytics. It was published ahead of the release of the government’s more comprehensive October employment report on November 02. According to a Reuters survey of economists, nonfarm payrolls probably rebounded by 190,000 jobs in October after Florence depressed restaurant and retail payrolls in September. (Reuters)  UK’s housing starts hit 11-year high, boosted by London jump – British builders are planning to construct the biggest number of homes in 11 years, boosted by a bounce-back in London, according to the National House-Building Council. Builders registered 43,578 new homes for construction between July and September, up 15% on the same period in 2017, and the biggest number since the third quarter of 2007, the National House- Building Council stated. An increase of 141% for registrations in London was boosted by a number of large-scale developments and compared with unusually low figures a year earlier. London, once the driver of home-building in Britain, has seen house prices fall as Brexit raises concerns about its financial sector and its appeal to foreign investors. Higher purchase taxes on homes costing over £1mn ($1.28mn) have also slowed the market in the capital. (Reuters)  Eurozone’s inflation rises to 2.2% – Eurozone’s inflation rose to 2.2% in October, official data showed, moving further away from the European Central Bank’s (ECB) target rate, as unemployment in the single currency zone remained stable. The rise from 2.1% in September, driven by a hike in energy prices, marks another step up from the ECB’s aim of ‘near to or lower’ than 2% and could add to pressure on the bank to end its crisis-era stimulus measures. Unemployment in the 19-country Eurozone stood at 8.1% in September, the same as the month before and the lowest figure since 2008. The closely-watched core inflation figure, which strips out energy, food, alcohol and tobacco, which also rose in October, reaching 1.1% compared with 0.9% the month before. (Peninsula Qatar)  Germany’s retail sales suffer sharpest fall in more than five years – Germany’s annual retail sales fell sharply in September, confounding economists’ expectations for an increase, data showed on October 31, adding to signs that the long boom in Europe’s largest economy may be drifting to a close. Spending by German shoppers fell by an adjusted 2.6% in September compared to the year before, data from the Federal Statistics Office showed. That was its sharpest drop since June 2013 and compared with a forecast for growth of 0.9%. The steep drop comes after years of rising employment, which drove a consumer boom that sustained the economy even at times when global demand for Germany’s exports slackened. More recently, an uptick in inflation pointed to turbulence ahead. Retail sales are a volatile indicator often subject to revision. Somewhat moderating the bleak figures, statisticians said the fall was partly attributable to retail sales in September 2017, having been unusually strong. Last September also had one more shopping day than this year’s. Signs of belt-tightening were particularly clear in the textiles and clothing sectors, where a real fall of 9.6% was recorded. Sales of food, drink and tobacco dropped 3%. (Reuters)  French inflation stable in October, yet near multi-year highs – French consumer prices edged up by 0.1% in October from September, giving a 12-month rate of 2.5% that remained just shy of the highest inflation level since March 2012, according to preliminary EU-harmonized data from the INSEE statistics agency. A Reuters poll of 18 economists had an average forecast of 2.6% for the October reading. The October level came in at the same 12-month figure as for September and remained close to the 2.6% registered in August, which was the highest since March 2012. Rising oil prices have increased inflationary pressures in the Eurozone, and earlier this week figures showed that German annual inflation had picked up in October to reach its highest level in more than 6-1/2 years. (Reuters)  Caixin PMI: China's factory sector barely grows in October, export orders extend slump – China’s manufacturing sector barely grew last month after stalling in September, a private survey showed, while an extended contraction in export orders highlighted rising pressure on the economy as a trade war with the US intensified. The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) for October, edged up to 50.1 from 50.0 in September. Economists polled by Reuters had forecasted a reading of 49.9, just off the 50-mark that divides expansion from contraction. The rather shallow growth last month was in line with an official PMI survey released on October 31 that showed China’s manufacturing sector expanded at the weakest pace in over two years. The brittleness in the vast factory sector, a major domestic and global driver of growth, backs expectations of further stimulus support from Beijing as it tries to prevent a sharp downturn for the economy. The Sino-US trade row, and the risks from the dispute to the Chinese and global economies, have rattled financial markets recently. The Caixin survey showed factory output dropped for the second straight month and was only fractionally above the neutral 50.0 level, amid weaker demand at home and abroad. That dragged business confidence among manufacturers to an 11-month low. (Reuters) Regional  Trade war: China to increase cooperation with the GCC, Africa – As the world’s two largest economies- the US and China, are locked in an escalating trade battle, a visiting Chinese policy expert said the ongoing trade war will enable China to increase its exposure to the GCC and the broader MENA region. China is increasingly shifting its focus on non-western countries against the backdrop of the battle. The country is keen on partnering
  5. 5. Page 5 of 7 with the GCC countries in infrastructure, industrialization, energy cooperation and financing mechanism, Wu Bingbing of Institute for International and Strategic Studies, Peking University, said, on the sidelines of the “Enriching the Middle East’s Economic Future Conference”. The State of Qatar Chair Professor in Middle Eastern Studies at Peking University, Bingbing said China will further deepen its cooperation with the GCC region and energy sector will be key in this partnership. Bingbing said, “We have seen this with CNPCC and QatarGas. China will be buying more LNG from Qatar and also more deals in infrastructure construction projects will be concluded by the two sides going forward.” China is also looking to leverage its presence in the region’s maritime industry as well, he added. To face up the trade war, China wants to keep the multilateral trade mechanism. It means that China needs new partners. This will help strengthen Chinese cooperation in this region, African countries and also other parts of the world outside Europe. Bingbing added that China will continue to implement its ambitious multibillion dollar Belt and Road Initiative (BRI). (Peninsula Qatar)  Saudi Arabia posts big decline in fiscal deficit in third quarter as oil revenues rise – Saudi Arabia reported a third-quarter fiscal deficit of SR7.3bn, a big drop from the SR48.7bn reported a year earlier due to a surge in oil revenues. The latest deficit figure was close to the SR7.36bn recorded in the second quarter. Saudi Arabia’s Finance Minister, Mohammed al-Jadaan said, “The improvement in fiscal performance is reflected by the decrease in the deficit with positive oil and non-oil growth, compared to the same period in 2017, and the planned budget.” (Reuters)  Egypt's Banque Misr sold 2% stake in Samba Financial Group – Banque Misr has sold its 2% stake in Saudi Arabia’s Samba Financial Group for about $370mn, according to Banque Misr’s Vice Chairman. (Reuters)  HSBC sees doubling of commercial bank's MENA profit by 2023 – China’s Belt and Road Initiative and plans by Gulf economies to diversify from oil will help HSBC to more than double its profit within its commercial bank business in the Middle East and North Africa (MENA), a senior bank executive said. The commercial bank business, which includes trade finance, cash management and capital financing, reported profit of $199mn in MENA in 2017 and profit of $6.8bn for the commercial bank business globally. (Reuters)  BJAZ posts 12.1% YoY and 0.7% QoQ rise in net profit to SR255.1mn in 3Q2018 – Bank AlJazira (BJAZ) recorded net profit of SR255.1mn in 3Q2018, an increase of 12.1% YoY and 0.7% QoQ. Total operating profit rose 1.5% YoY to SR679.2mn in 3Q2018. Total revenue for special commissions/investments rose 11% YoY to SR702.8mn in 3Q2018. Total assets stood at SR71.7bn at the end of September 30, 2018 as compared to SR67.5bn at the end of September 30, 2017. Loans and advances stood at SR40.3bn, while customer deposits stood at SR50.2bn at the end of September 30, 2018. EPS came in at SR1.03 in 9M2018 as compared to SR1.17 in 9M2017. (Tadawul)  RIA: OPEC and non-OPEC producers may decide on new output limits in December – OPEC and non-OPEC oil producers hope to sign a new cooperation agreement in December to set a production limit for the next year, Saudi Arabia’s Energy Minister Khalid al-Falih said, Russian state news agency RIA reported. The current output cap deal between OPEC and some non-OPEC oil producers expires at the end of 2018. (Reuters)  Standard Chartered pressing on with Saudi Arabia license application – Standard Chartered is pressing on with its application for a banking license in Saudi Arabia, its CFO, Andy Halford said. Halford said, “We have taken account of recent events, but conversely this is about running a business for the long term and that process will continue.” (Reuters)  SMEs to drive economic growth in GCC – The second India-UAE Partnership Summit (IUPS) stated that the market potential for small and medium enterprises (SMEs) in the GCC is poised to touch $920bn in the next five years compared to the current $360bn, a growth of 156%, and significantly enhancing investment prospects in this sector. A research paper released at the opening session of IUPS stated the employment potential in the SME sector is expected to touch 22mn from the current 17mn in GCC, while the sector reportedly accounts 120mn jobs in India. “SMEs present a significant opportunity for India and the UAE to cooperate and add value to the robust economic potential of both the countries, particularly in the private sector. The SME platform will offer a multifaceted and diverse investment opportunity for entrepreneurs from both countries thereby raising the share of the sector’s contribution to the GDP of both the nations,” Indian Ambassador to the UAE, Navdeep Singh Suri said. (GulfBase.com)  UAE unit to lure foreign investors – The UAE announced the establishment of a special unit at the Economy Ministry to help lure foreign investors. The establishment of the foreign direct investment unit was ordered by President Sheikh Khalifa bin Zayed Al-Nahyan in a decree. The order stipulates that foreign investment firms that secure licenses under the decree will be treated like national companies, significantly cutting back red tape. Last year the UAE attracted more than $10bn in foreign direct investment, continuing a trend in recent years of having the largest FDI inflows among all Arab states. The presidential decree aims to go further still, with the new unit to propose policies to improve the investment environment and attract more FDI. In May, the UAE announced new incentives to lure foreign investors, granting 100% ownership of companies and a ten year visa for professionals and investors. (GulfBase.com)  Ajman Bank's net profit rises to AED40.8mn in 3Q2018 – Ajman Bank recorded net profit of AED40.8mn in 3Q2018 as compared to AED39.2mn in 3Q2017. Income from Islamic financing and investing assets came in at AED196.6mn as compared to AED174.8mn in 3Q2017. Net operating income came in at AED120.6mn as compared to AED138.8mn in 3Q2017. Total assets stood at AED21.1bn at the end of September 30, 2018 as compared to AED20.0bn at the end of December 31, 2017. Islamic financing and investing assets (net) stood at AED16.0bn, while Islamic customers’ deposits stood at AED15.3bn at the end of September 30, 2018. EPS came in at AED0.024 in 3Q2018 as compared to AED0.023 in 3Q2017. (DFM)  Abu Dhabi’s economic plans to boost $29bn FDI stock – The Abu Dhabi government’s economic diversification plan will boost the stock of $29.4bn foreign direct investment (FDI) inflow into Abu Dhabi and the Emirate’s $90bn foreign trade, according to the Statistics Centre of Abu Dhabi (SCAD).
  6. 6. Page 6 of 7 Officials at a press conference announced the details of the forthcoming Abu Dhabi Investment Conference that takes place at Abu Dhabi National Exhibition Centre (ADNEC). Held under the patronage of Abu Dhabi Investment Authority (ADIA) and organized by Dome Exhibitions, Abu Dhabi Investment Conference that runs in conjunction with the International Real Estate and Investment Show (IREIS) at ADNEC will highlight the key economic growth areas. It will also focus on potential investment opportunities for foreign investors and financial institutions that will help boost the FDI inflow into the Emirate of Abu Dhabi. (GulfBase.com)  Abu Dhabi National Hotels in talks to buy Emaar Properties' hotel assets – Abu Dhabi National Hotels (ADNH) is in talks to buy some hotel buildings from Dubai’s Emaar Properties, sources said, as Emaar Properties increasingly focuses on its core businesses. ADNH, one of the biggest hotel owners in the Emirate of Abu Dhabi, has been in advanced discussions with Emaar Properties over the last two months, sources said, adding Emaar Properties would continue to manage the hotels. Emaar Properties stated, “We are in discussion with a number of parties who have shown interest”. (Reuters)  Mubadala sets final price guidance for 10-year Dollar bond – Abu Dhabi’s Mubadala plans to raise $800mn through a 10-year bond issue, a document by one of the banks leading the deal showed. Mubadala, the state investment fund, has set the final price guidance for the planned bond at 135-140 basis points over mid-swaps. The deal, expected to price later on Wednesday, received bids in excess of $1.5 billion, according to the document. (Reuters)  EU imports from Kuwait slightly up in August 2018 – The 28 member European Union’s (EU’s) imports from Kuwait, as well as imports of the 19 member Euro area from Kuwait in August 2018 were slightly up compared to August 2017, according to the latest figures released by Eurostat, the EU’s statistical agency. EU imports from Kuwait last August were valued at $562mn and EU exports to Kuwait at $476mn. In August 2017, EU imports from Kuwait were valued at $476mn and EU exports to Kuwait at $535mn. Euro area imports from Kuwait in August 2018 totaled $562mn and exports to Kuwait at $386mn. Euro area imports from Kuwait in August 2017 were valued at $363mn and exports to Kuwait at $536mn. Meanwhile, EU imports from Kuwait for the January-August 2018 period totaled $2.49bn and exports to Kuwait at $4.29bn for the same period. Euro area imports from Kuwait for the January-August 2018 period totaled $2.0bn and exports at $3.1bn for the same period. (GulfBase.com)  Kuwait bourse seeks to create VC platform to finance startups – The Kuwait Stock Exchange plans to set up a venture capital market to attract and support the country’s growing startups, the first idea of its kind in the Gulf region, the bourse’s CEO, Khaled al-Khaled said. The CEO of Boursa Kuwait wants to build a platform that can attract, keep and grow these companies so that they can eventually list on its main market. He said, “We are working closely with Kuwaiti young entrepreneurs to introduce a venture capital market. I want these entrepreneurs to grow locally. If they grow enough they will be listed in the Kuwaiti market.” (Reuters)  Boursa Kuwait’s CEO is confident about MSCI upgrade next year – Kuwait is implementing measures that will earn it an upgrade at index provider MSCI Inc., potentially attracting billions of Dollars in inflows, the stock exchange’s CEO, Khaled Abdulrazzaq Al Khaled said. He said, “Boursa Kuwait cannot guarantee the upgrade next year, but we can make sure that the strategy is in place. We are introducing all the tools that we think could accommodate the decision and the next step should include adding short selling.” The exchange last year started a series of steps aiming to improve liquidity and attract foreign and local investors. FTSE Russell earlier this year included the oil-rich nation in its emerging markets category, a move that could result in total inflows of as much as $1.5bn, according to Al Khaled. If MSCI follows suit, the inflows could triple, he added. (Bloomberg)  Bahrain's oil company targets $1bn through dual-tranche bond – Bahrain’s state-owned oil company, Nogaholding, plans to raise $1bn through a dual-tranche US Dollar-denominated bond, a document by one of the banks leading the transaction showed. The deal is the first foray by a Bahraini entity into the international debt markets since the government obtained an aid package from its Gulf neighbors. Nogaholding, the investment arm of Bahrain’s National Oil and Gas Authority, tried to raise international funds in April, but that deal was delayed, partly by emerging market weakness and partly by doubts among investors that Bahrain could repay its debt. Rated ‘BB-’ by Fitch, Nogaholding is marketing a six-year bond with an initial price guidance of around 7.875%, and 10-year notes with an initial guidance of around 8.5%. Each tranche is expected to raise $500mn, according to the document. (Reuters)  Investcorp builds £250mn European real estate portfolio – Investcorp, a leading global provider and manager of alternative investment products, announced the acquisition of five industrial units in Scotland for £11.5mn. Located in Uddingston, Blantyre and Livingston, the fully let 200,000 square feet portfolio is home to a number of well known tenants across the life sciences, logistics, telecoms and packaging sectors. The acquisition marks Investcorp’s seventh industrial property investment in the UK since June 2017, following the acquisition of a 200,000 square feet distribution warehouse near St Helens in the North West of England in the first half of 2018. It is the latest in a series of acquisitions that Investcorp has undertaken across the UK and Germany as part of its broader pan-European real estate strategy. Investcorp has invested more than £250mn across its portfolio of UK and European real estate assets since June 2017. (Peninsula Qatar)  Bahrain's economy grew 2.4% in the second quarter – Bahrain’s non-oil GDP grew 2.8% in 2Q2018, helped by construction and manufacturing sectors, Bahrain Economic Development Board (EDB) stated. The value of FDI is growing with total value of projects facilitated by the EDB in the first nine months of 2018 up 138% from a year ago. (Bloomberg)
  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 Aug-14 Aug-15 Aug-16 Aug-17 Aug-18 QSEIndex S&P Pan Arab S&P GCC 0.9% 1.4% (0.1%) 0.1% 0.1% 0.9% 1.5% (0.5%) 0.0% 0.5% 1.0% 1.5% 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 1,214.76 (0.7) (1.5) (6.8) MSCI World Index 2,021.98 1.2 2.0 (3.9) Silver/Ounce 14.25 (1.5) (3.0) (15.9) DJ Industrial 25,115.76 1.0 1.7 1.6 Crude Oil (Brent)/Barrel (FM Future) 75.47 (0.6) (2.8) 12.9 S&P 500 2,711.74 1.1 2.0 1.4 Crude Oil (WTI)/Barrel (FM Future) 65.31 (1.3) (3.4) 8.1 NASDAQ 100 7,305.90 2.0 1.9 5.8 Natural Gas (Henry Hub)/MMBtu 3.31 1.2 1.2 7.1 STOXX 600 361.61 1.3 1.8 (12.6) LPG Propane (Arab Gulf)/Ton 85.25 (0.4) (0.4) (13.9) DAX 11,447.51 1.0 1.4 (16.7) LPG Butane (Arab Gulf)/Ton 92.25 1.4 2.5 (15.0) FTSE 100 7,128.10 1.7 2.1 (12.6) Euro 1.13 (0.3) (0.8) (5.8) CAC 40 5,093.44 1.9 1.7 (9.8) Yen 112.94 (0.2) 0.9 0.2 Nikkei 21,920.46 2.0 2.5 (4.1) GBP 1.28 0.5 (0.5) (5.5) MSCI EM 955.92 2.1 1.7 (17.5) CHF 0.99 (0.3) (1.1) (3.4) SHANGHAI SE Composite 2,602.78 1.2 (0.3) (26.6) AUD 0.71 (0.5) (0.2) (9.4) HANG SENG 24,979.69 1.6 1.0 (16.8) USD Index 97.13 0.1 0.8 5.4 BSE SENSEX 34,442.05 1.1 2.0 (12.8) RUB 65.88 0.5 0.3 14.3 Bovespa 87,423.55 0.3 0.4 1.4 BRL 0.27 (0.7) (2.1) (11.0) RTS 1,126.21 1.9 2.5 (2.4) 76.5 75.2 73.9

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