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QNBFS Daily Market Report November 29, 2018

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The QSE Index declined 0.3% to close at 10,329.6

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QNBFS Daily Market Report November 29, 2018

  1. 1. Page 1 of 7 QSE Intra-Day Movement Qatar Commentary The QSE Index declined 0.3% to close at 10,329.6. Losses were led by the Telecoms and Insurance indices, falling 1.3% and 0.9%, respectively. Top losers were Islamic Holding Group and Ooredoo, falling 2.9% and 1.9%, respectively. Among the top gainers, Ezdan Holding Group gained 4.1%, while Qatar National Cement Company was up 2.2%. GCC Commentary Saudi Arabia: The TASI Index rose 0.8% to close at 7,632.5. Gains were led by the Consumer Durables. and Telecom. Serv. indices, rising 2.0% and 1.7%, respectively. Takween Advanced Ind. rose 8.9%, while Zahrat Al Waha for Trading was up 8.4%. Dubai: The DFM General Index declined 0.5% to close at 2,685.1. The Consumer Staples and Discretionary index fell 2.7%, while the Insurance index declined 1.7%. Union Properties fell 5.4%, while Aan Digital Services Holding Co. was down 5.0%. Abu Dhabi: The ADX General Index fell 1.6% to close at 4,881.0. The Investment & Financial Services index declined 5.2%, while the Real Estate index fell 2.5%. Fujairah Building Industries declined 9.5%, while Waha Capital was down 5.6%. Kuwait: The Kuwait Main Market Index rose 0.2% to close at 4,740.2. The Oil & Gas index gained 0.4%, while Banks index rose 0.3%. Amar Finance & Leasing Co. gained 23.1%, while Al Masaken International Real Estate Dev. was up 21.0%. Oman: The MSM 30 Index rose 0.2% to close at 4,395.9. Gains were led by the Industrial and Services indices, rising 0.2% and 0.1%, respectively. Al Omaniya Financial Ser. gained 9.8%, while Gulf Invest Services Holding was up 5.3%. Bahrain: The BHB Index gained 0.3% to close at 1,324.9. The Hotels & Tourism index rose 4.3%, while the Industrial index gained 0.8%. Gulf Hotel Group rose 6.4%, while Investcorp Bank was up 3.2%. QSE Top Gainers Close* 1D% Vol. ‘000 YTD% Ezdan Holding Group 12.70 4.1 439.7 5.1 Qatar National Cement Company 57.99 2.2 2.1 (7.8) Aamal Company 9.28 2.1 165.0 6.9 Medicare Group 63.25 1.8 20.5 (9.4) Qatar First Bank 4.41 1.1 820.6 (32.5) QSE Top Volume Trades Close* 1D% Vol. ‘000 YTD% Barwa Real Estate Company 39.16 (0.7) 1,401.2 22.4 Doha Bank 21.11 0.1 1,112.1 (25.9) Qatar First Bank 4.41 1.1 820.6 (32.5) United Development Company 14.12 (0.7) 628.3 (1.8) Vodafone Qatar 8.21 (0.2) 607.3 2.4 Market Indicators 28 Nov 18 27 Nov 18 %Chg. Value Traded (QR mn) 243.5 313.9 (22.4) Exch. Market Cap. (QR mn) 585,731.5 585,160.6 0.1 Volume (mn) 7.6 9.3 (18.2) Number of Transactions 6,986 7,024 (0.5) Companies Traded 42 42 0.0 Market Breadth 15:21 17:24 – Market Indices Close 1D% WTD% YTD% TTM P/E Total Return 18,199.63 (0.3) 0.0 27.3 15.3 All Share Index 3,088.88 0.2 0.6 25.9 15.6 Banks 3,839.56 (0.1) 0.3 43.2 14.4 Industrials 3,264.44 0.3 (0.4) 24.6 15.5 Transportation 2,106.56 (0.2) 0.4 19.1 12.2 Real Estate 2,137.99 2.2 3.7 11.6 19.3 Insurance 3,013.76 (0.9) 0.3 (13.4) 17.9 Telecoms 1,016.39 (1.3) 0.8 (7.5) 41.2 Consumer 6,745.21 (0.2) (0.7) 35.9 13.8 Al Rayan Islamic Index 3,891.04 0.0 (0.0) 13.7 15.2 GCC Top Gainers ## Exchange Close # 1D% Vol. ‘000 YTD% Co. for Cooperative Ins. Saudi Arabia 58.00 3.6 355.6 (38.6) Mobile Telecom. Co. Saudi Arabia 6.74 3.2 10,858.4 (7.8) Ahli United Bank Kuwait 0.30 3.1 406.1 (9.1) Advanced Petrochem. Co. Saudi Arabia 52.70 2.7 173.7 14.8 National Petrochemical Saudi Arabia 25.65 2.6 468.5 38.4 GCC Top Losers ## Exchange Close # 1D% Vol. ‘000 YTD% DAMAC Properties Dubai 1.94 (3.5) 1,329.7 (41.2) First Abu Dhabi Bank Abu Dhabi 14.02 (2.6) 9,300.0 36.8 Aldar Properties Abu Dhabi 1.62 (2.4) 6,041.1 (26.4) Abu Dhabi Comm. Bank Abu Dhabi 8.04 (2.2) 1,788.6 18.2 Phoenix Power Co. Oman 0.10 (1.9) 59.2 (26.8) 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% Islamic Holding Group 22.62 (2.9) 6.0 (39.7) Ooredoo 76.22 (1.9) 95.1 (16.0) Qatar Oman Investment Co. 5.91 (1.7) 0.8 (25.2) Qatar Ind. Manufacturing Co 43.00 (1.1) 8.0 (1.6) Qatar Electricity & Water Co. 182.20 (1.1) 26.7 2.4 QSE Top Value Trades Close* 1D% Val. ‘000 YTD% Barwa Real Estate Company 39.16 (0.7) 54,859.1 22.4 QNB Group 198.00 0.0 52,732.4 57.1 Doha Bank 21.11 0.1 23,455.2 (25.9) Masraf Al Rayan 40.09 (0.5) 19,527.7 6.2 Industries Qatar 135.00 0.4 9,596.1 39.2 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* 10,329.61 (0.3) 0.0 0.3 21.2 66.67 160,900.4 15.3 1.5 4.2 Dubai 2,685.13 (0.5) (2.5) (3.6) (20.3) 81.28 97,348.5 9.1 1.0 6.6 Abu Dhabi 4,881.04 (1.6) (2.1) (0.4) 11.0 64.30 133,569.1 13.2 1.4 4.9 Saudi Arabia 7,632.50 0.8 0.3 (3.5) 5.6 984.30 481,439.6 16.5 1.7 3.6 Kuwait 4,740.20 0.2 (0.2) 1.0 (1.8) 65.17 32,413.4 16.9 0.9 4.4 Oman 4,395.94 0.2 (1.3) (0.6) (13.8) 8.40 19,096.2 10.4 0.8 5.9 Bahrain 1,324.87 0.3 0.1 0.8 (0.5) 4.78 20,181.3 9.0 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) 10,300 10,320 10,340 10,360 10,380 9:30 10:00 10:30 11:00 11:30 12:00 12:30 13:00
  2. 2. Page 2 of 7 Qatar Market Commentary  The QSE Index declined 0.3% to close at 10,329.6. The Telecoms and Insurance indices led the losses. The index fell on the back of selling pressure from Qatari and GCC shareholders despite buying support from non-Qatari shareholders.  Islamic Holding Group and Ooredoo were the top losers, falling 2.9% and 1.9%, respectively. Among the top gainers, Ezdan Holding Group gained 4.1%, while Qatar National Cement Company was up 2.2%.  Volume of shares traded on Wednesday fell by 18.2% to 7.6mn from 9.3mn on Tuesday. However, as compared to the 30-day moving average of 5.8mn, volume for the day was 31.3% higher. Barwa Real Estate Company and Doha Bank were the most active stocks, contributing 18.5% and 14.7% to the total volume, respectively. Source: Qatar Stock Exchange (* as a % of traded value) Global Economic Data Date Market Source Indicator Period Actual Consensus Previous 11/28 US Mortgage Bankers Association MBA Mortgage Applications 23-November 5.5% – -0.1% 11/28 US Bureau of Economic Analysis GDP Annualized QoQ 3Q2018 3.5% 3.5% 3.5% 11/28 EU European Central Bank M3 Money Supply YoY October 3.9% 3.5% 3.6% 11/28 Germany GfK AG GfK Consumer Confidence December 10.4 10.5 10.6 Source: Bloomberg (s.a. = seasonally adjusted; n.s.a. = non-seasonally adjusted; w.d.a. = working day adjusted) News Qatar  FocusEconomics: Qatar’s GDP to exceed $220bn by 2023 – Qatar’s GDP is expected to exceed $220bn by 2023, according to a report by FocusEconomics. By year-end, Qatar’s GDP will total $172bn, FocusEconomics noted in its latest country report. The country’s GDP per capita in Dollar terms will account for $77,422 in 2023 compared with $61,963 by end-2018, it stated. Qatar’s economic growth in terms of nominal GDP will reach 5% in 2023 from 3.1% by the year-end. The report showed that Qatar’s international reserves will total $35.5bn in 2023 compared with $25.9bn this year. This, according to FocusEconomics, will cover 8.2 months of imports in place of 9.4 months this year. Qatar’s fiscal balance (as a percentage of the country’s GDP) will be 4.8% in 2023 compared to -0.3% this year. The country’s public debt (as a percentage of GDP) is expected to fall to 43.2% in 2023 in place of 53.4% in end-2018. Qatar’s public debt will fall gradually until 2023, the report noted. Next year, it will be 50.6% (as a percentage of the country’s GDP) and in the following years, it will be 47.5% (2020), 47.5% (2021) and 45.4% (2022). The current account balance (as a percentage of the country’s GDP) will be 8.2% in 2023 compared with 8.1% in 2018. (Gulf-Times.com)  QNCD announces the production of white cement – Qatar National Cement Company (QNCD) has announced the production of white cement after it has obtained the necessary licenses for the product. The product is available in the form of bags weighing 50 kg at a price of QR25 per bag, and also available in bulk at a price of QR500 per ton. Previously the company has announced production of Slag as well to meet the local market demand in accordance with the Qatar Vision 2030. The company has also obtained the ISO certification (Quality Management Systems ISO 9001: 2015), (Environmental Management Systems 14001: 2015) and (Occupational Health & Safety Management Systems OHSAS 18001: 2007). (QSE)  QGRI announces completion of all procedures related to granting shares in the share capital of Trust Investment Holding Algeria to the benefit of the latter’s CEO – Further to the previous disclosure of Qatar General Insurance and Reinsurance Company (QGRI) related to the approval at the company’s shareholders general assembly meeting (held on March 12, 2018) to grant the CEO of Trust Investment Holding Algeria, Fatiha Khellal, a percentage (0.2%) of QGRI’s shares in the share capital of Trust Investment Holding Algeria, in alignment with the granting of all the shareholders of Trust Investment Holding Algeria a percentage (1%) of their shareholding in this company to the benefit of Khellal. QGRI announced the completion of all the relevant procedures of the granting of the aforementioned percentage (0.2%) to Khellal, and accordingly, QGRI’s ownership percentage in the share capital of Trust Investment Holding Algeria is now 19.8%. (Peninsula Qatar)  PM opens four new Manateq warehousing parks – The four new Manateq warehousing parks inaugurated by HE the Prime Minister (PM) and Interior Minister, Sheikh Abdullah bin Nasser bin Khalifa Al-Thani, celebrates another milestone in the government’s drive to stimulate more economic and commercial activities in Qatar, an official said. The PM inaugurated the Bu Sulba, Bu Fesseela, Umm Shaharaine 1 and Umm Shaharaine 2 warehousing parks developed by Gulf Warehousing Company (GWCS), Al Asmakh Real Estate Development, Dohatna Logistics Parks, and Barwa Real Estate Group, respectively. (Gulf-Times.com) Overall Activity Buy %* Sell %* Net (QR) Qatari Individuals 14.77% 26.52% (28,606,349.62) Qatari Institutions 11.15% 18.01% (16,696,159.32) Qatari 25.92% 44.53% (45,302,508.94) GCC Individuals 0.82% 0.44% 915,776.42 GCC Institutions 0.81% 2.80% (4,850,257.01) GCC 1.63% 3.24% (3,934,480.59) Non-Qatari Individuals 6.26% 6.95% (1,693,335.20) Non-Qatari Institutions 66.19% 45.28% 50,930,324.73 Non-Qatari 72.45% 52.23% 49,236,989.53
  3. 3. Page 3 of 7  GWCS Marine Services receives MSC Lirica’s maiden call at Doha Port – GWCS Marine Services received the MSC Lirica’s maiden call at the Doha Port yesterday. MSC Lirica, a giant cruise ship owned and operated by MSC Cruises, holds a maximum capacity of 1,560 passengers and a crew compliment of approximately 732 members. It docked at Doha Port for the first time, as the country promotes the growing tourism industry and maritime transport. “We are glad to have this opportunity to further entrench the developing trust of major cruise lines such as MSC Cruises have in Doha Port,” GWCS Group’s CEO, Ranjeev Menon said. (Gulf-Times.com)  S’hail Shipping adds fifth ship to its dry bulk carrier fleet – S’hail Shipping has added a fifth ship to its fleet of dry bulk carriers and is strengthening its capital base through rights issue as part of its expansion strategy. The latest ship, S’hail Al Wajbah, is a 2005 Japanese-built gearless bulk carrier of about 77,000dwt (deadweight tonnage). (Gulf-Times.com)  Qatar should open its banking system to fintechs, says expert – Qatar should open its banking system to fintechs and standardize its regulations to facilitate fintech set-ups, operation and mobility, a leading expert in the field said. Samer Mahfouz, who is leading the applied innovation at Thomson Reuters for the Middle East and North Africa (MENA) region, made this observation considering the country’s absorptive capacity for disruptive technologies. It assumes significance considering that Qatar’s Second Strategic Plan (SSP) for Financial Sector Regulation 2017-22 had said fintech will play an important role in driving financial services in the near future due to the expected boom in e-commerce and increasing focus on cost-efficient delivery. Addressing a seminar organized by the International Chamber of Commerce, he said in the first half of 2018, global investments in fintech companies have hit $6bn across 875 deals. Highlighting that block-chain is changing the future of transaction-based industries, Mahfouz said last year, global remittances reached $600bn, of which $30bn (5%) were transfer fees. He said the innovation concept is the application of technologies to improve productivity of goods and services. It aims to achieve four goals; higher productivity, greater output, more improved goods, services, and economic growth, he noted. Fast-growing and tech-savvy Qatar aims to leverage fintech to address pressing social, technological and financial services challenges. Under the strategic goal 2 of the SSP, the country will develop and implement a fintech strategy. (Gulf- Times.com)  Qatar doubled agricultural and industrial projects after blockade – Qatar has confirmed that it doubled the agricultural and industrial projects in the country, achieved self-sufficiency and produced food locally and will start exporting the surplus soon despite the blockade imposed on it. This came in a statement delivered by Abdullah bin Nasser Al Fahid, Acting Charge d'Affaires of the State of Qatar in Vienna, to the 46th United Nations Industrial Development Organization (UNIDO) Industrial Development Board. Qatar has doubled the number of factories during the past year and has given special attention to the food sector by focusing on local production. In his speech, Abdullah bin Nasser Al Fahid said that after relying mainly on imports, a year after the siege, Qatar is producing a lot of food locally, adding that by the end of this year, 90% of dairy products would be produced locally, and there is a plan to export surplus in the near future. The statement stressed that Qatar has managed to decrease its economic dependence on the export of oil & gas from 86% to 54%, and is planning to reduce more, according to Qatar National Vision 2030. The statement pointed out that structural changes have been made to the Qatari economy in order to diversify it, focusing on industrialization, diversification of employment opportunities, the involvement of youth in industrial development, and development of the industrial sector in order to achieve self- sufficiency and meet market needs. (Peninsula Qatar)  Nakilat showcases Qatar’s LNG transport feats at SIGTTO meeting – Qatar hosted the Society of International Gas Tanker and Terminal Operators’ (SIGTTO) board and annual general meeting with Qatar Gas Transport Company Limited (Nakilat) sponsoring the session. SIGTTO is a global organization established to promote shipping and terminal operations for liquefied gases, which are safe. Nakilat’s CEO, Abdullah Al- Sulaiti is a director of SIGTTO. Qatar has made significant enhancements in the LNG transportation industry, with Nakilat contributing to the improvements and supporting increasing exports of LNG shipments, ensuring compliance with the highest levels of safety, in accordance with international standards. (Gulf-Times.com)  Wataniya Mobile becomes Ooredoo Palestine – Wataniya Mobile has officially been rebranded as Ooredoo Palestine, marking another important step forward for the global brand that launched in 2013. The rebrand of Wataniya Mobile is part of Ooredoo Group’s strategy to evolve its business and create a foundation for new opportunities for customers across its footprint in the Middle East, North Africa and Southeast Asia. For customers in Palestine, the fresh new brand is set to support a wave of exciting new initiatives and connect them to Ooredoo’s global community. (Gulf-Times.com)  Qatar Airways could establish a new alliance – Qatar Airways’ threats to withdraw from the oneworld alliance as ‘ongoing attacks’ from partner airlines (including American Airlines) are strengthening. American Airlines has taken issue with Qatar Airways being a state-owned airline, and has accused the Qatari carrier of ‘receiving massive subsidies to support its operating costs and expansion efforts’. Qatar has denied unfair subsidies and stated that US airlines have absolutely benefited from government assistance (despite being private companies), as well as benefiting from bankruptcy laws that wiped out debts and pension obligations at American Airlines, among other US carriers. Qatar Airways’ CEO, Akbar Al-Baker repeated, “Qatar’s commitment to the oneworld alliance has diminished as we are constantly being attacked by a oneworld partner.” However, since this statement, the ‘dispute’ among oneworld members has intensified. Australian flag carrier and oneworld alliance member airline, Qantas, has internally criticized Qatar Airways for wanting to expand into Australia. (Gulf-Times.com) International  US third-quarter growth unrevised, headwinds increasing – The US economy slowed in the third quarter as previously reported, but the pace was likely strong enough to keep growth on track to hit the Trump administration’s 3% target this year, even as
  4. 4. Page 4 of 7 momentum appears to have moderated further early in the fourth quarter. Gross domestic product increased at a 3.5% annualized rate, the Commerce Department stated in its second estimate of third-quarter GDP growth. That was unchanged from its estimate in October and well above the economy’s growth potential, which economists estimate to be about 2%. The unrevised third-quarter GDP reading reflected a faster pace of inventory accumulation and more business spending on equipment than initially thought that was offset by downward revisions to consumer spending and exports. The economy grew at a 4.2% pace in the April-June quarter. (Reuters)  CBI: Mood in UK services firms sours ahead of Brexit – Gloom deepened across the services companies that dominate Britain’s economy in November and firms continued to hold back on investment ahead of Brexit, a survey showed. Business optimism fell to its lowest level in two years for business and professional services firms, which represent the biggest chunk of the services sector, the Confederation of British Industry (CBI) stated. Confidence at consumer-facing firms such as hotels and restaurants also declined, the CBI’s quarterly survey showed. Britain’s economy grew strongly over the summer, fuelled by consumer spending during a hot summer and the soccer World Cup, but the CBI’s report fits with other gauges that suggest the economy is slowing through the final months of 2018. (Reuters)  British banks withstand disorderly Brexit in Bank of England test – All seven British banks and building societies in this year’s Bank of England (BoE) stress test passed, indicating they could withstand a disorderly Brexit without having to curb lending. The BoE’s Financial Policy Committee (FPC) stated that it has reviewed a scenario whereby Britain crashes out of the European Union in March with no deal or transition period. “The FPC judges that the UK banking system is strong enough to continue to serve UK households and businesses even in the event of a disorderly Brexit, No bank needs to strengthen its capital position as a result of the stress test. The stress test was tougher on banks than the disorderly Brexit scenario,” it said in its twice-yearly Financial Stability Report. (Reuters)  Japan’s retail sales rise most in 10 months, signal economic rebound – Japan’s retail sales grew the fastest in 10 months in October, as consumers shelled out more on fuel, cars, medicines and cosmetics, in a sign the world’s third-largest economy is likely returning to growth after a summer stumble. Japanese policymakers are counting on stronger private consumption to help accelerate inflation to the central bank’s 2% target, which has remained elusive despite more than five years of massive monetary stimulus. The 3.5% annual gain in retail sales in October from a year earlier handily beat the median estimate for 2.6% increase and follows a revised 2.2% rise in September. It was the fastest annual gain since last December. Retail sales are a key barometer for the strength of private consumption, which accounts for roughly 60% of the Japanese economy. The data confirmed they have risen for a full straight year, reflecting a tight labor market and gradual wage growth. (Reuters) Regional  IRTI & IsDB: Strengthening regulatory system urged to optimize potential of Islamic finance – The Islamic Research and Training Institute (IRTI) of the Islamic Development Bank (IsDB) Group has published the second edition of the global report on Islamic finance, which highlights steps for unleashing the potential of Islamic finance to help harness the much- needed funds for long-term investment in development programs. The report noted that by unleashing the potential of Islamic finance, funding could be harnessed for programs aimed to eradicate extreme poverty, develop infrastructure, provide education, ensure access to clean water, and fight climate change. It therefore proposes incentivizing risk sharing and asset-backed finance as the potential mechanism to attract financing for long-term investments. However, the report found that in order to optimally tap the potential of Islamic finance in this regard, there is the need to develop the enabling legal, regulatory, and financial ecosystem. The report made two major recommendations, namely to strengthen the financial system through developing the regulatory environment, and to enhance the institutional framework and diversity of instruments for long-term financing. (GulfBase.com)  GCC chemical industry’s performance improving on all fronts – The GCC chemical industry’s performance has improved on all fronts, including in revenue, employment, production capacity and export, marking a key step in its journey towards transformation. This was revealed in the annual Gulf Petrochemicals and Chemicals Association (GPCA) Facts and Figures report. The report’s findings reflect on this year’s forum theme ‘Executing Transformation and Investing in Growth’, it stated. During the forum, Secretary General of GPCA, Abdulwahab Al Sadoun, announced that production capacity in 2017 reached 166.8mn tons, up by 7% YoY, with expectations of further growth in 2018 to 170.9mn tons. GCC’s overseas production capacity reached 18.6mn tons with facilities in North America, Europe and Asia. The GCC chemical industry’s revenue grew by 17% YoY in 2017, reaching $84.2bn, the fastest rate since 2011, indicating the industry’s move towards higher value products. Saudi Arabia and the UAE significantly lifted the region, posting 19% and 17% increase in revenue, respectively. (GulfBase.com)  PwC: Middle East continues to be least demanding tax system – The Middle East continued to be the least demanding tax system even as the regional governments plan to do more to unlock the potential of technology to facilitate tax compliance, according to a PricewaterhouseCoopers (PwC) and World Bank report. The annual ‘Paying Taxes’ report found that the Middle East region has the lowest average time to comply (144 hours), number of payments (17.1), total tax and contribution rate or TTCR (24.4%), and post-filing index (44.6 out of 100). “This region has the lowest TTCR and time to comply, but these may increase as new taxes are introduced in several economies to reduce reliance on revenues from hydrocarbons,” the report stated. (Gulf-Times.com)  ICAEW: Middle East economies still dominated by oil sector development – Economic recovery in the Middle East is gathering momentum after last year’s slump, when economic growth slowed to an eight-year low at only 0.9%. Overall, the Middle East’s GDP is expected to grow to 2.3% in 2018, though growth remains below the 2010- 2016 average of 3.9%, the accountancy and finance body ICAEW stated in its ‘Economic
  5. 5. Page 5 of 7 Insight’ report. ICAEW stated that oil continues to dominate and shape the macroeconomic outlook for Middle Eastern economies, despite major economic diversification efforts. Economic Insight: Middle East 4Q2018, produced by Oxford Economics, stated that the same factors which slowed down economic growth in 2017 are now contributing to the overall economic recovery. Oil prices have hit their highest levels since the end of November 2014 in recent weeks at more than $80per barrel, oil production has been elevated in the GCC compared to last year and the fiscal stance has been expansionary in 2018 across the GCC in contrast to 2017. (Peninsula Qatar)  UAE's Mubadala, Saudi Arabia and Russian fund in talks on drilling firm stake – Russia’s sovereign wealth fund, UAE’s Mubadala and Saudi Arabia are in talks to buy 16% stake in Russian oil drilling firm, Eurasia Drilling, according to Head of the Russian Direct Investment Fund, Kirill Dmitriev. The deal is awaiting approval from a government commission. (Reuters)  Saudi Arabia wants united front on oil output; Russia and Nigeria hold out – Saudi Arabia will not cut oil output on its own to stabilize the market, Energy Minister, Khalid al-Falih said, as Nigeria and Russia stated it is too early to signal whether they would join any production curbs. OPEC and its allies, led by Russia, meet in Vienna next week against the backdrop of concerns over a slowing global economy and rising oil supplies from the US, which is not involved in an existing agreement to restrain output. The negative economic outlook helped to push oil LCOc1 below $60 a barrel this week from as high as $85 in October, prompting Saudi Arabia, the de facto leader of the OPEC, to suggest significant production cuts. (Reuters)  Saudi Arabia's construction costs up 1.9% in 3Q2018 – The construction costs across Saudi Arabia surged by 1.9% during the third quarter compared to the same period last year mainly driven by key industry issues linked to workload and labor, a report by Canadian real estate expert Colliers International stated. The procedures implemented by Saudi Arabia to carry out nationalization in various sectors, as well as taxes imposed on expatriates, have contributed to raising labor’s costs in the nation, Colliers stated in its report. It further pointed out that over the last one year, the project pricing has been very aggressive on the back of competition for work. As for profit margins of contractors, the Canadian real estate expert said it did not expect a growth in the near future until the real estate firms fill their order books. It will take significantly more projects to commence, to have a real impact on increasing margins that contractors will include within their bids. A reduced competition is predicted to have a minor impact on tender pricing over the next 12 months, it stated. The tender price inflation’s average for construction costs would be 1.8% in the coming 12 months, said the expert. However, the numerous projects that have been announced by the Saudi Arabian government over the last 12 months would help to bring optimism to the industry. (GulfBase.com)  Saudi Arabia's PIF splits local investment portfolio – Saudi Arabia’s Public Investment Fund (PIF) has made an adjustment to the local investment portfolio by dividing it into two portfolios, Maaal news website reported. The first is a public investment portfolio and is managed by Rashed Sharif, a banker, while the second is an investment in the real estate sector, which includes investments in the city of Neom and Red Sea projects, Amala, and other real estate projects. Real estate portfolio was assigned to the Aiman Almudaifer, former CEO of several companies in the real estate sector, Maaal reported. Division is taking place because of the large volume of the local investment portfolio - which is estimated at 90% of the PIF’s current assets, equivalent to $324bn, compared to 10% for international investments - and for the ease of management, it stated. (Bloomberg)  Saudi Arabia’s consumer prices rise 2.4% YoY and 2.1% MoM in October – Saudi Arabia’s General Authority for Statistics and Information published updates on cost-of-living indices for October 2018. October’s rate of change in total index was up 2.4% YoY and 2.1% MoM. Prices for housing, fuels and water were fell 0.8% MoM in October. (Bloomberg)  Zain Saudi Arabia said to sell its towers for $648mn and lease them back – Mobile Telecommunication Company Saudi Arabia (Zain Saudi Arabia) agreed to sell its mobile telecom towers to IHS Holding Ltd. for $648mn and lease them back. The board accepted an offer to sell 8,100 towers and related passive infrastructure, and lease back for 15 years with an optional five-year extension, it stated. The plan also envisages building 1,500 towers over six years. The proceeds will be used to reduce debt. (Bloomberg)  Abraaj’s founder makes last-ditch rescue bid for restructuring the debt of the company – Abraaj’s founder, Arif Naqvi has met limited partners and creditors in a bid to win back their support for a plan to restructure the debt of Abraaj Holdings and some of its older funds to avert liquidation of the company, Reuters reported. (Bloomberg)  Petrochemical Industries Company’s US petrochemical plant to start its operation by the end of 2019 – Kuwait-based Petrochemical Industries Company’s Chairman, Mohammed Al- Farhoud expected that the operation of petrochemical complex project in the US to kick off by the end of 2019. The company’s CEO, Al-Farhoud said the project of petrochemical plant to produce Ethylene Glycol (EG) is currently in the engineering, procurement and construction phase. The venture is carried out with Equate Group, he said, noting that the production capacity of the plant is 750,000 tons annually. He has revealed that currently he is analyzing a number of opportunities to acquire significant stakes in petrochemical projects in the US, South Korea and China. (GulfBase.com)  French Business Syndicate to explore investment options in Duqm SEZ – Four leading French companies - CMA CGM, EDF Renewables, Fives and SUEZ - announced the creation of a French Business Syndicate to explore opportunities with investment in the Special Economic Zone (SEZ) at Duqm. It follows a recent visit to France by Yahya bin Saeed al Jabri, Chairman of the SEZ Authority at Duqm (SEZAD). The initiative will further strengthen the existing business relationship between Oman and the Republic of France, the authority stated. The French Business Syndicate has been established with the goal of assessing various investment possibilities in each of their respective field of activity as well as the possibility to cooperate to bring higher value- propositions within the guidelines defined by the SEZAD and
  6. 6. Page 6 of 7 Ithraa (Public Authority for Investment Promotion & Export Development). (GulfBase.com)  GFH receives approval for acquisition of treasury shares and market making arrangement – GFH Financial House (GFH) has informed its shareholders that it has received the Central Bank of Bahrain’s approval for acquisition of treasury shares up to 7% of the group’s total issued shares (paid up capital) as per the market making arrangement with SICO in Bahrain Bourse. Further, it will continue with the current market making arrangement with SICO in Bahrain Bourse for another six months (until May 28, 2019). (Bloomberg)  Investcorp buys six properties for $311mn in US – Bahrain- based Investcorp bought six properties in the US for $311mn, boosting its investments in the real-estate market. The investment firm stated that it has acquired multifamily properties, totaling 2,876 units, in Tampa, Houston and Salt Lake City. Investcorp now owns about 13,000 multifamily units across the US. (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 Oct-14 Oct-15 Oct-16 Oct-17 Oct-18 QSE Index S&P Pan Arab S&P GCC 0.8% (0.3%) 0.2% 0.3% 0.2% (1.6%) (0.5%) (2.0%) (1.0%) 0.0% 1.0% SaudiArabia Qatar Kuwait Bahrain Oman AbuDhabi Dubai Asset/Currency Performance Close ($) 1D% WTD% YTD% Global Indices Performance Close 1D%* WTD%* YTD%* Gold/Ounce 1,221.21 0.5 (0.2) (6.3) MSCI World Index 2,029.78 1.5 2.8 (3.5) Silver/Ounce 14.33 1.3 0.3 (15.4) DJ Industrial 25,366.43 2.5 4.4 2.6 Crude Oil (Brent)/Barrel (FM Future) 58.76 (2.4) (0.1) (12.1) S&P 500 2,743.79 2.3 4.2 2.6 Crude Oil (WTI)/Barrel (FM Future) 50.29 (2.5) (0.3) (16.8) NASDAQ 100 7,291.59 2.9 5.1 5.6 Natural Gas (Henry Hub)/MMBtu 4.50 2.0 (4.3) 45.6 STOXX 600 357.39 0.5 1.0 (13.3) LPG Propane (Arab Gulf)/Ton 68.25 0.4 (7.1) (31.1) DAX 11,298.88 0.4 1.0 (17.5) LPG Butane (Arab Gulf)/Ton 67.50 0.4 (10.9) (37.8) FTSE 100 7,004.52 0.4 0.7 (13.7) Euro 1.14 0.7 0.3 (5.3) CAC 40 4,983.24 0.5 0.8 (11.5) Yen 113.68 (0.1) 0.6 0.9 Nikkei 22,177.02 1.1 1.8 (3.5) GBP 1.28 0.6 0.1 (5.1) MSCI EM 991.67 1.2 2.3 (14.4) CHF 1.01 0.5 0.4 (1.9) SHANGHAI SE Composite 2,601.74 1.0 0.8 (26.4) AUD 0.73 1.1 1.0 (6.4) HANG SENG 26,682.56 1.4 2.9 (11.0) USD Index 96.79 (0.6) (0.1) 5.1 BSE SENSEX 35,716.95 1.2 2.9 (5.0) RUB 66.96 (0.2) 1.1 16.2 Bovespa 89,250.82 2.8 2.7 0.4 BRL 0.26 0.8 (0.5) (13.9) RTS 1,113.46 1.4 (0.0) (3.5) 76.1 75.1 73.4

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