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QNBFS Daily Market Report November 5, 2018

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The QSE Index rose 0.5% to close at 10,331.1

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QNBFS Daily Market Report November 5, 2018

  1. 1. Page 1 of 7 QSE Intra-Day Movement Qatar Commentary The QSE Index rose 0.5% to close at 10,331.1. Gains were led by the Banks & Financial Services and Industrials indices, gaining 0.8% and 0.5%, respectively. Top gainers were Industries Qatar and Qatar International Islamic Bank, rising 1.4% and 1.3%, respectively. Among the top losers, Ahli Bank fell 8.4%, while Doha Insurance Group was down 6.0%. GCC Commentary Saudi Arabia: The TASI Index fell 0.4% to close at 7,846.9. Losses were led by the Pharma, Biotech. and Transportation indices, falling 4.2% and 1.9%, respectively. Saudi Ground Services declined 6.0%, while Nama Chemicals Co. was down 5.4%. Dubai: The DFM General Index declined 0.4% to close at 2,795.0. The Services index fell 3.4%, while the Real Estate & Const. index declined 0.7%. Amanat Holdings fell 4.3%, while Gulf General Investments Company was down 2.4%. Abu Dhabi: The ADX General Index fell marginally to close at 4,919.8. The Real Estate index declined 2.5%, while the Telecommunication index fell 0.6%. Gulf Cement Co. declined 8.5%, while Aldar Properties was down 2.8%. Kuwait: The Kuwait Main Market Index declined 0.1% to close at 4,715.2. The Technology index fell 16.0%, while the Consumer Goods index declined 0.7%. Automated Systems Co. fell 16.0%, while Salbookh Trading Co. was down 10.3%. Oman: The MSM 30 Index rose 0.1% to close at 4,424.9. Gains were led by the Financial and Services indices, rising 0.1% each. Nat. Pharmaceutical Ind. rose 1.6%, while Ahli Bank was up 1.3%. Bahrain: The BHB Index gained 0.1% to close at 1,315.2. The Services index rose 1.3%, while the Investment index gained 0.4%. Bahrain Telecommunication Co. rose 2.4%, while GFH Financial Group was up 1.5%. QSE Top Gainers Close* 1D% Vol. ‘000 YTD% Industries Qatar 142.00 1.4 52.5 46.4 Qatar International Islamic Bank 62.99 1.3 94.0 15.4 The Commercial Bank 41.00 1.2 52.7 41.9 Qatar Islamic Bank 156.00 1.1 42.5 60.8 United Development Company 14.03 0.8 225.6 (2.4) QSE Top Volume Trades Close* 1D% Vol. ‘000 YTD% Vodafone Qatar 8.10 (1.0) 362.5 1.0 Zad Holding Company 99.00 (1.0) 309.6 34.4 Mazaya Qatar Real Estate Dev. 7.53 (0.9) 263.5 (16.3) Qatar Gas Transport Company Ltd. 17.65 (0.8) 236.6 9.6 United Development Company 14.03 0.8 225.6 (2.4) Market Indicators 04 Nov 18 01 Nov 18 %Chg. Value Traded (QR mn) 140.2 135.7 3.3 Exch. Market Cap. (QR mn) 580,500.8 578,520.7 0.3 Volume (mn) 3.5 4.1 (12.9) Number of Transactions 2,306 3,129 (26.3) Companies Traded 43 39 10.3 Market Breadth 12:30 16:20 – Market Indices Close 1D% WTD% YTD% TTM P/E Total Return 18,202.31 0.5 0.5 27.3 15.3 All Share Index 3,043.50 0.3 0.3 24.1 15.4 Banks 3,802.06 0.8 0.8 41.8 14.3 Industrials 3,364.94 0.5 0.5 28.4 16.0 Transportation 2,089.99 (1.0) (1.0) 18.2 12.1 Real Estate 1,909.70 (0.5) (0.5) (0.3) 17.2 Insurance 3,060.53 (0.6) (0.6) (12.0) 18.2 Telecoms 953.91 (0.1) (0.1) (13.2) 38.7 Consumer 6,942.41 (0.5) (0.5) 39.9 14.2 Al Rayan Islamic Index 3,906.43 0.3 0.3 14.2 15.3 GCC Top Gainers ## Exchange Close # 1D% Vol. ‘000 YTD% Saudi Cement Co. Saudi Arabia 44.45 3.4 270.6 (6.3) Bahrain Telecom. Co. Bahrain 0.26 2.4 430.0 25.5 Yanbu Cement Co. Saudi Arabia 22.30 2.4 365.4 (34.1) Makkah Const. & Dev. Co. Saudi Arabia 84.00 2.2 44.0 10.9 Mobile Telecom. Co. Saudi Arabia 6.40 1.7 4,853.0 (12.4) GCC Top Losers ## Exchange Close # 1D% Vol. ‘000 YTD% Saudi Ground Serv. Co. Saudi Arabia 33.65 (6.0) 2,197.8 (14.4) National Petrochem. Co. Saudi Arabia 28.65 (3.0) 307.6 54.6 Aldar Properties Abu Dhabi 1.72 (2.8) 1,785.5 (21.8) Saudi Arabian Fertilizer Saudi Arabia 80.00 (2.6) 149.8 22.9 Saudi Kayan Petrochem. Saudi Arabia 15.02 (2.3) 7,350.4 40.6 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% Ahli Bank 29.04 (8.4) 0.7 (21.8) Doha Insurance Group 12.57 (6.0) 0.3 (10.2) Qatar Islamic Insurance Company 52.61 (3.3) 4.9 (4.3) Mannai Corporation 57.10 (3.2) 3.2 (4.0) Qatari German Co for Med. Dev. 4.55 (3.0) 34.4 (29.6) QSE Top Value Trades Close* 1D% Val. ‘000 YTD% Zad Holding Company 99.00 (1.0) 30,647.2 34.4 QNB Group 195.50 0.8 19,580.5 55.1 Masraf Al Rayan 37.94 0.6 7,730.3 0.5 Barwa Real Estate Company 37.85 (0.4) 7,431.4 18.3 Industries Qatar 142.00 1.4 7,425.6 46.4 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* 10,331.14 0.5 0.5 0.3 21.2 38.45 159,463.6 15.3 1.5 4.2 Dubai 2,794.98 (0.4) (0.4) 0.4 (17.1) 24.40 99,510.1 7.5 1.0 6.3 Abu Dhabi 4,919.84 (0.0) (0.0) 0.4 11.9 10.30 134,448.2 13.1 1.4 4.9 Saudi Arabia 7,846.93 (0.4) (0.4) (0.8) 8.6 652.90 497,417.1 16.3 1.8 3.6 Kuwait 4,715.21 (0.1) (0.1) 0.5 (2.3) 46.98 32,257.2 14.8 0.9 4.4 Oman 4,424.86 0.1 0.1 0.0 (13.2) 1.83 19,125.6 10.5 0.8 5.9 Bahrain 1,315.18 0.1 0.1 0.0 (1.2) 1.18 20,351.6 8.9 0.8 6.2 Source: Bloomberg, Qatar Stock Exchange, Tadawul, Muscat Securities Market and Dubai Financial Market (** TTM; * Value traded ($ mn) do not include special trades, if any) 10,200 10,250 10,300 10,350 10,400 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 0.5% to close at 10,331.1. The Banks & Financial Services and Industrials 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.  Industries Qatar and Qatar International Islamic Bank were the top gainers, rising 1.4% and 1.3%, respectively. Among the top losers, Ahli Bank fell 8.4%, while Doha Insurance Group was down 6.0%.  Volume of shares traded on Sunday fell by 12.9% to 3.5mn from 4.1mn on Thursday. Further, as compared to the 30-day moving average of 5.6mn, volume for the day was 37.4% lower. Vodafone Qatar and Zad Holding Company were the most active stocks, contributing 10.3% and 8.8% to the total volume, respectively. Source: Qatar Stock Exchange (* as a % of traded value) Earnings Releases Company Market Currency Revenue (mn) 3Q2018 % Change YoY Operating Profit (mn) 3Q2018 % Change YoY Net Profit (mn) 3Q2018 % Change YoY Saudi Arabian Amiantit Co. Saudi Arabia SR 270.1 103.4% 18.7 N/A 0.7 -87.8% Qassim Cement Co. Saudi Arabia SR 74.4 -43.1% 3.3 -93.0% 5.7 -88.9% Saudi Ground Services Co. Saudi Arabia SR 700.7 0.5% 85.5 -46.2% 92.7 -42.1% Jarir Marketing Co. Saudi Arabia SR 1.9 17.0% 0.3 17.6% 0.3 16.8% Saudi Pharmaceutical Industries and Medical Appliances Corp. Saudi Arabia SR 213.7 -23.0% 3.6 -68.2% -3.4 N/A Kingdom Holding Co. Saudi Arabia SR 481.6 -12.5% 423.1 -18.1% 248.6 0.4% Al Mazaya Holding Company Kuwait KD 5.2 -67.0% 3.6 -5.4% 1.9 -29.0% Emaar Malls Dubai AED 1,129.0 28.9% – – 537.0 10.5% National General Insurance Company Dubai AED 169.4 13.5% – – 22.0 155.4% Emirates Driving Company Abu Dhabi AED 49.7 -14.0% – – 27.3 2.4% Umm Al Qaiwain General Investment Co. Abu Dhabi AED – – – – 16.2 -3.8% Bahrain Telecommunication Company Bahrain BHD 101.5 5.1% – – 19.7 130.5% Inovest Bahrain USD 4.6 16.3% – – 2.1 30.8% Source: Company data, DFM, ADX, MSM, TASI, BHB. News Qatar  Amiri order reshuffles Qatar’s Cabinet – HH the Amir Sheikh Tamim bin Hamad al-Thani issued yesterday the Amiri Order No 7 of 2018, reshuffling the Cabinet. The Amiri Order appoints HE Issa bin Saad Al-Jafali Al-Nuaimi as Minister of Justice, HE Abdullah bin Abdulaziz bin Turki Al-Subaie as Minister of Municipality and Environment, HE Ali bin Ahmed Al-Kuwari as Minister of Commerce and Industry, HE Yousef bin Mohamed Al-Othman Fakhro as Minister of Administrative Development, Labor and Social Affairs and HE Saad bin Sharida Al-Kaabi as Minister of State for Energy Affairs and member of the Cabinet. HE Al-Nuaimi will assume the duties of the Minister of State for Cabinet Affairs in addition to the duties of his post. (Gulf- Times.com)  Qatar appoints QNB Group’s CEO as Trade and Industry Minister – Qatar appointed the CEO of QNB Group as Qatar's Trade and Industry Minister. Ali Ahmed Al-Kuwari was named to the post in a cabinet reshuffle that included changes to the justice, labor and social affairs ministries. (Zawya)  Amir issues decision restructuring Qatar Petroleum’s board of directors – HH the Amir Sheikh Tamim bin Hamad Al-Thani issued decision No 73 of 2018, on restructuring the board of directors of Qatar Petroleum. The decision stipulated that the board of directors of Qatar Petroleum be restructured with HH the Deputy Amir Sheikh Abdullah bin Hamad Al-Thani as Chairman and HE the Minister of State for Energy Affairs as Vice-Chairman and Managing Director. The members of the board will include HE the Minister of Finance, HE the Minister of Commerce and Industry, Nasser Khalil Al-Jaidah, Sheikh Khalid bin Khalifa bin Jassim Al-Thani and Saeed Mubarak Al- Muhannadi. (Gulf-Times.com)  Amir appoints QFMA board of directors – HH the Amir Sheikh Tamim bin Hamad Al-Thani issued decision No 76 of 2018, appointing the board of directors of Qatar Financial Markets Authority (QFMA). The decision stipulated that the board of directors of the QFMA will comprises HE Sheikh Mohamed bin Hamad bin Qassim Al-Abdullah Al-Thani as Chairman, Yahya Saeed Al-Nuaimi as Vice-Chairman, and the memberships will Overall Activity Buy %* Sell %* Net (QR) Qatari Individuals 26.96% 51.00% (33,712,009.49) Qatari Institutions 31.68% 36.13% (6,239,969.00) Qatari 58.64% 87.13% (39,951,978.49) GCC Individuals 0.24% 0.13% 157,498.92 GCC Institutions 4.47% 0.76% 5,210,262.43 GCC 4.71% 0.89% 5,367,761.35 Non-Qatari Individuals 10.94% 6.92% 5,634,197.61 Non-Qatari Institutions 25.71% 5.06% 28,950,019.53 Non-Qatari 36.65% 11.98% 34,584,217.14
  3. 3. Page 3 of 7 comprise of Sheikh Khalid bin Saud bin Fahad Al-Thani, Abdulrahman Mohamed Yousuf Jolo, Michael Rayan, Khalid Nasser Al-Khater and Mohamed Abdulaziz Saleh Al-Khulaif. (Gulf-Times.com)  Qatar Investment Authority’s board of directors revamped – HH the Amir Sheikh Tamim bin Hamad Al-Thani issued decision No 72 of 2018, restructuring Qatar Investment Authority’s board. The decision stipulated that the board of directors of Qatar Investment Authority is restructured as follows: HE Sheikh Mohamed bin Abdulrahman Al-Thani as President, HE Mohamed bin Hamad bin Khalifa Al-Thani as Deputy President, HE Ali Sherif Al-Emadi, HE Ali bin Ahmed Al- Kuwari, HE Saad bin Sherida Al-Kaabi, HE Sheikh Abdulla bin Saoud Al-Thani, HE Hussain Ali Al-Abdulla and HE Nasser bin Ghanim Al-Khulaifi as members. (Gulf-Times.com)  Amir establishes National Tourism Council – HH the Amir Sheikh Tamim bin Hamad Al-Thani issued decision No 74 of 2018, establishing the National Tourism Council. The council shall have a legal identity and a budget to be attached to the general budget of the State. It shall pertain to the cabinet and have its headquarters within the country, and can also have offices outside the State. The council aims to provide suitable circumstances to implement the national strategy for tourism and related programs in a way that sustains the comprehensive development plans for tourism. It will also be engaged in the regulation of the sector and promotion of tourism both within and outside the country. The tenure of the board of directors of the council is set at four years, which is renewable for a similar period. The new law cancels Qatar Tourism Authority and the government committee to coordinate conferences and events. All functions of these entities shall be allocated to the new council. (Gulf-Times.com)  Amir issues decision establishing Planning and Statistics Authority – HH the Amir Sheikh Tamim bin Hamad Al-Thani issued Decree No 70 of 2018, establishing the Planning and Statistics Authority. The Amir also issued Decree No 71 of 2018 appointing HE Saleh Mohamed Salem Al-Nabit as Chairman of the Planning and Statistics Authority. The authority shall have a legal identity and a budget to be attached to the cabinet budget. It shall pertain to the cabinet with headquarters in Doha. The authority will aim to follow up on the implementation of the comprehensive development vision and establishing a statistics system in the State with all relevant tasks. The Planning and Statistics Authority shall be the official source for all official data and statistical operations in the country. The chairman of the authority shall be appointed by an Amiri decision and have the necessary authority to run it and achieve its targets in accordance with applicable laws and regulations within the approved annual budget. The new decree details all the departments and sections of the Planning and Statistics Authority as well as the jurisdiction and tasks of each. Starting from the date the decision is applicable, the new authority shall take over all the rights, liabilities and financial allocations of the Ministry of Development Planning and Statistics. (Gulf-Times.com)  Amir appoints adviser to Deputy Amir’s Office – HH the Amir Sheikh Tamim bin Hamad Al-Thani issued Amiri Order No 6 of 2018, appointing HE Masoud bin Mohamed Al-Amri as Adviser at HH the Deputy Amir’s Office. (Gulf-Times.com)  Hamad Port records robust 76% YoY jump in net tonnage in September – Qatar’s maritime sector has remained strong, despite the continuing economic and trade embargo, as Hamad Port witnessed a robust 76% YoY growth in net tonnage to 2.53mn tons in September. The number of vessels calling on Hamad Port stood at 146, which, however saw an about 3% YoY dip, according to figures released by the Ministry of Development Planning and Statistics in its monthly statistics bulletin. On a MoM basis, net tonnage through Hamad Port witnessed more than 7% growth driven by more than 7% increase in the vessels calling on the port. Hamad Port covers 28.5 square kilometers and will have the yearly capacity for 1.7mn tons of general freight and 1mn tons of grain, with a specialist terminal supporting the entry of around 500,000 vehicles per year. (Gulf-Times.com)  Qatar’s ties with emerging markets in Asia seen strengthening – Growth in the emerging market and the developing economies’ group is set to remain steady at 4.7% in 2018 and 2019. Among the emerging market and the developing economies, the growth prospects of many energy exporters have been lifted by higher oil prices, but growth was revised down for certain countries, reflecting country-specific factors, tighter financial conditions, geopolitical tensions, and higher oil import bills. Qatar and China mark the 30th anniversary of the official establishment of diplomatic relations between the two friendly countries. Trade volume between Qatar and China was at $10.6bn in 2017 on the strength of energy exports- namely natural gas from Qatar, as well as Chinese shipments of electronics and building materials to Qatar. Qatar is already the second largest supplier of LNG to China. The volume of LNG imports from Qatar is expected to rise substantially in the near future as the demand for energy is growing at a rapid pace in China. Chinese companies are looking to enter the Qatari market to tap the growing demand for various products and services. The bilateral trade between Qatar and India during in 2017-18 was close to $10bn. Qatar’s major exports to India include petrochemicals, LNG, fertilizers, sulphur and iron pyrites. Qatar’s major imports from India include accessories, manmade yarn, fabrics, made-ups, cotton yarn, transport equipment, machinery and instruments, metals, ores and minerals etc (Gulf-Times.com)  GCC tourism to leap on sport events in Qatar – Three major sport events that Qatar is hosting - World Athletics Championships in 2019, FIFA World Cup 2022 and the World Aquatics Championships (2023), are expected to generate significant demand for the GCC tourism and hospitality industry, a new report showed. Qatar is expected to witness highest revenue growth in five years up to 2022 on account of significant investment activities in the tourism and hospitality sector for the upcoming FIFA World Cup 2022 event, which is expected to attract over 1.5mn tourist arrivals, Alpen Capital said in a recent report. The country is witnessing an increase in hotel supply on account of FIFA World Cup 2022, the report noted. Qatar’s hotel supply stood at 22,461 hotel rooms and 2,706 service apartments in 2017. Qatar is expected to have a hotel supply of 46,000 rooms by 2022, Alpen Capital stated.
  4. 4. Page 4 of 7 Qatar National Tourism Strategy 2030 aims to increase the tourism spending up to QR40bn and tourism’s contribution to 4% of the country’s GDP in 2023 from 2.3% in 2016. Qatar’s hospitality market is expected to register CAGR of 12.1% (2017- 2022) to $1.4bn by 2022. (Gulf-Times.com)  Dell EMC underscores commitment to digital transformation in Qatar – Dell EMC’s President for Europe, Middle East, and Africa, Aongus Hegarty said that the transformation initiatives of the Qatari government and agenda laid down by the leadership is driving significant opportunity for technology- driven transformation across sectors. Annually, Dell EMC invests more than $4bn in research & development globally, to streamline transformation initiatives and achieve more impactful results in markets around the world. Hegarty also announced that Dell EMC will be investing in bringing the Dell Technologies Forum to Doha in early 2019. This event, held in multiple cities around the world each year, brings together the Dell EMC customer and partner community, and showcases advances in technology that have a direct impact on human progress, Hegarty said during his recent visit to Qatar. Dell EMC leaders stressed on the growing roster of customers that the company is working with in Qatar, which spans across public and private and industry sectors. (Peninsula Qatar) International  BEA data: Private goods-producing industries’ share of the US economy rose to the highest level in eleven quarters – The share of the US economy from private goods-producing industries increased to the highest level in 11 quarters, according to data released from the Bureau of Economic Analysis (BEA). The private goods-producing sector, which consists of agriculture, forestry, fishing, and hunting; mining; construction; and manufacturing for durable and nondurable goods, increased its contribution to almost 18% of overall GDP, as of the end of the second quarter this year, up from a record low of 17.1% at the end of 2016. Private goods-producing industries make up a greater share of US GDP, among the sectors with the largest growth in gross output by industry being mining, and in particular, support activities for mining, petroleum and coal product manufacturing and primary metal manufacturing. Among the service-producing industries, the fastest growth was seen in the data processing, internet publishing, and other information services field. (Bloomberg)  Japan invests in service industry, reshaping its legendary hospitality – Japan’s capital expenditure boom is shifting to the services sector, stirring fears that self-checkout systems and software will take the human touch out of omotenashi, the country’s vaunted commitment to hospitality. The economic forces at work are undeniable. The working-age population is forecast to shrink by about a third in the next half century, and companies simply cannot hire enough workers. Turning to automation raises productivity and removes a bottleneck to economic growth, but marks a retreat from a services-oriented culture, where the customer is king. Capital expenditure in the services sector, which started to accelerate in the last quarter of 2016, rose 9.2% in the first half of this year, the fastest increase in almost three years. The investment could pay off in Japan, which has the lowest productivity among the Group of Seven countries. (Reuters) Regional  Almarai Company announces full compliance in importing 100% of its Alfalfa and Green Forage requirements – Almarai Company has stopped the production of alfalfa and green forage in Saudi Arabia. Almarai Company has reached full compliance with the resolution by securing 100% of the supply of all forage outside Saudi Arabia, to support its dairy and poultry businesses. These imports originate from different locations, including US, Argentina, Spain and Eastern Europe, from selected third party suppliers or from the company run farms. The total investments realized in these countries for this purpose amounts to approximately $500mn over the period 2014 to 2018. Since the resolution announcement, the company has gradually increased the imported percentage of its alfalfa and green forage requirement from 52% in 2016, to more than 75% in 2017 to reach 100% in 2018 and be fully compliant. The full annual cost impact of this new sourcing model consisting of the importation of forage versus local production is estimated at SR350mn. This adverse effect is anticipated to take place over a period of two years due to the large forage stock. (GulfBase.com)  Jarir Marketing Company announces the distribution of cash dividend for third quarter – Jarir Marketing Company’s board of directors has recommended the distribution of SR2.35 per share to the shareholders for 3Q2018. Total amount of dividend distributed is SR282mn. The eligibility of dividends shall be for the shareholders who own shares on maturity date which is on November 12, 2018 and registered with the Securities Depository Center Company (Depository Center) at the end of the second trading day following the date of maturity. (GulfBase.com)  Saudi Arabia to boost supplies over Iran oil sanctions – With the US poised to curtail Iran’s oil exports, OPEC member Saudi Arabia and its partners stand ready to ramp up supplies even as market conditions remain uncertain, analysts said. The renewal of sanctions on the Islamic republic comes at a time of major supply disruptions in several producer nations and as US President, Donald Trump aims to prevent an oil price hike. Analysts expect that Iran’s oil exports, which reach around 2.5mn bpd in normal times, to plunge by 1mn to 2mn bpd when the sanctions come into effect. That is expected to strain an already tight market. Outages in Libya, Venezuela, Nigeria, Mexico, Angola and others forced OPEC and non-OPEC producers in June to abandon an agreed cut in output and boost supplies. (Gulf-Times.com)  SAFCO announces signing non-binding MoU with SABIC – Saudi Arabian Fertilizer Company (SAFCO) announced signing a non-binding memorandum of understanding (MoU) with SABIC. The MoU defines the principles of cooperation between the two parties regarding SAFCO acquisition of SABIC's investments in the affiliates that produce agri-nutrients and some relevant products. (Tadawul)  AW Rostamani acquires stake in UK car retailer – The UAE based conglomerate AW Rostamani announced that it has acquired a majority stake in car retailer Brayleys, marking the company’s first investment in the UK’s motor retail sector. The privately owned company, well known for its car retailer subsidiary Arabian Automobiles that sells Nissan, Infinity and
  5. 5. Page 5 of 7 Renualt in the UAE, did not disclose the amount it paid for the stake. The statement from AW Rostamani further indicated that the company’s acquisition of Brayleys is part of its efforts to improve its global footprint through strategic acquisitions. It did not reveal its next target but implied that it is looking closely at the UK market. “The acquisition of a majority stake in Brayleys is underlined by our strategy to expand and build our business in the UK, a key automotive market,” said Khalid Al Rostamani, Chairman of AW Rostamani. (GulfBase.com)  New law enhances discretionary powers of UAE’s central bank – The new Central Bank Law (Federal Law No. 14 of 2018), entrusts the Central Bank of the UAE with the responsibility of licensing and regulation of all kinds of financial services activities in the UAE. The law expands on previous provisions and confirms that no financial activities may be carried out in or from the UAE without a license. “The law reconfirms the jurisdiction of the UAE Central Bank over banking activities in the UAE as the relevant licensing authority, which now also includes the activity of promoting financial products. It introduces more prescriptive licensing requirements and processes for financial institutions, both for existing and any new entrants,” Jody Waugh, Partner, Head of Banking & Finance, Al Tamimi & Company said. While the law gives a new set of powers to the central bank in setting conditions for issuance, cancellation and renewal of licenses for financial services activities, it incorporates a long list of financial service activities - ranging from taking deposits, provision of credit, currency exchange, payment services and other financial products - that requires a license from the central bank within the UAE. (GulfBase.com)  Higher loan yields lift profitability of UAE banks – Year-to-date bank results showed that the UAE banks have benefited from rising interest rates, after the three rate hikes by the Federal Reserve. It is important to maintain interest rates at par or in close range with US rates, to prevent capital flight in the event of higher rates offered on Dollar deposits. Analysts said that banks in the UAE continue to hold significantly large low cost deposits in current and savings accounts (CASA), the pricing of which is not hugely impacted by the Fed rate hike because of the comfortable liquidity situation and relatively modest credit growth. On the lending side, banks have more flexibility on the pricing, leading to better yield and net interest margins. (GulfBase.com)  EIBank reports net profits narrowing to AED32.77mn in 9M2018 – Emirates Investment Bank (EIBank) reported net profit of AED32.77mn in 9M2018 as compared to AED44.38mn reported in the same period in 2017. Operating income stood at AED108.39mn for the nine-month period ended 30 September 2018 as compared to AED132.27mn reported in the same period last year. Total assets under EIBank’s management amounted to AED10.77bn as compared to AED10.53bn at year-end 2017. EIBank’s CEO, Khaled Sifri said, “We entered the second half of the year knowing that it will be a period of challenging market conditions, underpinned by higher interest rates and continued volatility in the regional and global markets. While this has resulted in a period of slower activity for EIBank, our assets under management continued to grow over the course of the third quarter.” (GulfBase.com)  DEWA raises solar power purchase deal with ACWA Power – Dubai Electricity and Water Authority (DEWA) stated that it had agreed to increase the amount of electricity it would purchase from a solar park being built by a consortium led by Saudi Arabia's ACWA Power. As a result of the increased purchases by DEWA, the park's capacity would increase to 950 megawatts (MW) from 700 MW, the Dubai government stated. "Following the amendment, the total investment for the ambitious project has reached $4.4bn," it stated. The project's cost before the capacity increase was estimated at $3.9bn. The project would feature a 260-meter tower receiving focused sunlight, the world’s tallest tower, the Dubai government stated. The first stage of the project is due to be commissioned in late 2020. (GulfBase.com)  October brings some cheer for Dubai’s property market – Property sales in Dubai crossed 1,500 units in October for the first time since May (when it totaled 2,006 units sold). In the year to end October, off-plan transactions are down by 28% - 14,475 units compared to 20,235 units in the first 10 months of 2017. The difference between end October and last year is a marginal 134 units. Deals involving ready homes totaled 9,865 units from January till end of October, while 2017 saw 10,099. The next eight weeks could well see ready properties sold this year overtaking 2017’s by a decisive margin. (GulfBase.com)  Deutsche Bank's DWS Group to buy stake in Dubai-based digital investment firm – DWS Group, Deutsche Bank’s asset manager, has entered into a binding agreement to acquire an equity stake of 15% in Dubai-based Neo Technologies, the companies stated. The deal comes as Dubai and other cities across the Gulf region compete to establish themselves as regional powerhouses in financial technology or fintech. Under the agreement, DWS Group and Neo Technologies will form a partnership to collaborate on the development and expansion of digital asset management services in the MENA region, sources said. The value of the transaction was not disclosed. (Reuters)  Abu Dhabi’s economic performance ‘positive’ in 2Q2018 – The macroeconomic and sectoral indexes of the second quarter of this year reflect a positive economic performance in Abu Dhabi, particularly in non-oil activities, a report stated. This confirms the rising levels of investor confidence and business optimism about the Emirate's economic outlook, Wam news agency report stated citing the second quarter economic follow-up report issued by the Department of Economic Development - Abu Dhabi (ADDED), based on the data produced by the Statistics Centre - Abu Dhabi. Saif Al Hajeri, Chairman of ADDED, said that the results are issued at the time when a range of economic and development initiatives and associated programs have been announced by federal and local governments to stimulate the domestic economy, enhance business environment and support the development drive in the Emirate of Abu Dhabi and the UAE. He referred to the AED50bn stimulus package for Abu Dhabi and to Abu Dhabi Government Accelerators Program 'Ghadan 21' in addition to the resolutions of the Federal Government on foreign ownership, residence facilities for investors, qualified personnel and retirees along with the other initiatives launched at the level of national entities in the Emirate. The report expected that the implementation of the announced economic and
  6. 6. Page 6 of 7 development initiatives and associated programs will contribute to enhancing investor confidence and eliminating concerns about the future. (GulfBase.com)  ADNOC to boost oil output capacity to 4mn bpd by 2020 – Abu Dhabi National Oil Company (ADNOC) plans to increase its oil production capacity to 4mn bpd by the end of 2020 and 5mn bpd by 2030 after new oil and gas finds, the company stated. Abu Dhabi’s Supreme Petroleum Council (SPC) approved ADNOC’s new integrated gas strategy and its plan for capital investment in between 2019-2023. The SPC approved $132.33bn in capital expenditure to support ADNOC’s five-year growth plan. (Reuters)  ADNOC announces new discoveries in oil and gas – Abu Dhabi announced the new discovery of gas totaling 15tn standard cubic feet that is expected to enable the UAE achieve self- sufficiency in gas and potentially become a net gas exporter. Currently, Abu Dhabi is tapping sour gas through the Shah gas project in the Western region of Abu Dhabi. The project reached its full production capacity of one billion cubic feet per day and there are plans to increase the capacity further. The UAE also imports gas from its neighboring countries to meet the demand through the Dolphin gas project. “The gas strategy will sustain LNG production to 2040 and allow ADNOC to seize incremental LNG and gas-to-chemicals growth opportunities, where they arise, from the UAE’s dynamic demand or supply position and evolving energy mix,” ADNOC stated. (GulfBase.com)  Kuwait Petroleum Corp. said to be in talks for $3.3bn loan – Kuwait Petroleum Corp. is in talks with local banks to raise $3.3bn revolving loan to help fund its expansion plans, according to sources. KPC is expected to finalize the financing by the end of the year, sources said. The company has a $105bn investment strategy for the next five years and plans to finance half with debt and the rest with equity, sources added. The company will also tap international markets for loans, bonds and Sukuk to finance its expansion, sources said. Kuwait has earmarked around $500bn for energy projects until 2040. Oil companies are boosting spending after crude prices rebounded in the past two years. (Bloomberg)  OOMCO showcases fuel bunkering capabilities – Oman Oil Marketing Company’s ship bunker fuel supply capabilities were showcased to industry leaders from Europe, Asia, USA, and the Middle East at the Gas & LNG Middle East Summit 2018. OOMCO's CEO, David Kalife participated in a commercial panel entitled "From Producers to End-Users". Hosted in Muscat, under the patronage Dr Mohammed bin Hamad Al Rumhy, Minister of Oil and Gas, this year’s summit focused on key areas for the development of gas infrastructure, paying special attention to Liquefied Natural Gas (LNG) as a "future proof" fuel. The only fuel marketing company speaking at the event, Kalife underscored the increasing international demand for bunker fuels within the shipping sector, highlighting the great potential for LNG as an alternative to high-sulfur fuel due to its environmentally friendly benefits. With mandates for cleaner fuels coming into effect by 2020, industry experts predict that by 2030, demand for LNG will grow from its current 1mn tons per annum to anywhere between 20mn and 30mn tons per annum. (GulfBase.com)  Oman's oil output touches 265.46mn barrels in 9M2018 – Oman’s crude oil production, including condensates, stood at 265.46mn barrels for the first nine months of 2018. This is against an output of 264.61mn barrels for the corresponding January-September period of 2017, according to the latest data released by the National Centre for Statistics and Information (NCSI). Out of the total production, crude oil production was down by 2.2% at 236.01mn barrels, while condensates production rose 25.8% to touch 29.46mn barrels. The Sultanate recorded a daily average crude oil production of 972,400 barrels during the January-September period of 2018, added the NCSI report. The average price of Oman crude surged ahead by 32.7% to $67.2 per barrel in the January-September period, from $50.6 per barrel in the same period last year, the NCSI report stated. (GulfBase.com)  ABC's net profit narrows to $46mn in 3Q2018 – Arab Banking Corporation (ABC) recorded net profit of $46mn in 3Q2018 as compared to $49mn in 3Q2017. The bank’s net interest income was stable YoY at $140mn in 3Q2018. Total operating income came in at $203mn as compared to $221mn in 3Q2017. Total assets stood at $27.89bn at the end of September 30, 2018 as compared to $29.50bn at the end of December 31, 2017. Loans and advances stood at $14.42bn, while customers’ deposits stood at $16.16bn at the end of September 30, 2018. EPS came in at $0.01 in 3Q2018 as compared to $0.02 in 3Q2017. (Bahrain Bourse)  Batelco Group plans to sell its Kuwait subsidiary – Bahrain Telecommunication Company (Batelco) has signed an initial agreement on November 1, 2018 with Kuwait Telecommunications Company (VIVA) to sell its 90% shareholding of its Kuwait subsidiary, QualityNet General Trading and Contracting Company WLL (QualityNet). QualityNet’s shares will be transferred to VIVA Kuwait after signing the final definitive agreements and fulfilling the terms, conditions and covenants agreed between the parties and obtaining the necessary regulatory approvals in the State of Kuwait. The price consideration will be established on the completion of the full transfer of shares and fulfillment of the conditions agreed between the parties; thus, there is no financial impact at this stage of the transaction. (Bahrain Bourse)
  7. 7. Contacts Saugata Sarkar, CFA, CAIA Shahan Keushgerian Zaid al-Nafoosi, CMT, CFTe Head of Research Senior Research Analyst Senior Research Analyst Tel: (+974) 4476 6534 Tel: (+974) 4476 6509 Tel: (+974) 4476 6535 saugata.sarkar@qnbfs.com.qa shahan.keushgerian@qnbfs.com.qa zaid.alnafoosi@qnbfs.com.qa QNB Financial Services Co. W.L.L. Contact Center: (+974) 4476 6666 PO Box 24025 Doha, Qatar Disclaimer and Copyright Notice: This publication has been prepared by QNB Financial Services Co. W.L.L. (“QNBFS”) a wholly-owned subsidiary of Qatar National Bank (Q.P.S.C.). QNBFS is regulated by the Qatar Financial Markets Authority and the Qatar Exchange. Qatar National Bank (Q.P.S.C.) is regulated by the Qatar Central Bank. This publication expresses the views and opinions of QNBFS at a given time only. It is not an offer, promotion or recommendation to buy or sell securities or other investments, nor is it intended to constitute legal, tax, accounting, or financial advice. QNBFS accepts no liability whatsoever for any direct or indirect losses arising from use of this report. Any investment decision should depend on the individual circumstances of the investor and be based on specifically engaged investment advice. We therefore strongly advise potential investors to seek independent professional advice before making any investment decision. Although the information in this report has been obtained from sources that QNBFS believes to be reliable, we have not independently verified such information and it may not be accurate or complete. QNBFS does not make any representations or warranties as to the accuracy and completeness of the information it may contain, and declines any liability in that respect. For reports dealing with Technical Analysis, expressed opinions and/or recommendations may be different or contrary to the opinions/recommendations of QNBFS Fundamental Research as a result of depending solely on the historical technical data (price and volume). QNBFS reserves the right to amend the views and opinions expressed in this publication at any time. It may also express viewpoints or make investment decisions that differ significantly from, or even contradict, the views and opinions included in this report. This report may not be reproduced in whole or in part without permission from QNBFS. COPYRIGHT: No part of this document may be reproduced without the explicit written permission of QNBFS. Page 7 of 7 Rebased Performance Daily Index Performance Source: Bloomberg Source: Bloomberg Source: Bloomberg Source: Bloomberg (*$ adjusted returns) 45.0 70.0 95.0 120.0 Oct-14 Oct-15 Oct-16 Oct-17 Oct-18 QSE Index S&P Pan Arab S&P GCC (0.4%) 0.5% (0.1%) 0.1% 0.1% (0.0%) (0.4%)(0.6%) (0.3%) 0.0% 0.3% 0.6% SaudiArabia Qatar Kuwait Bahrain Oman AbuDhabi Dubai Asset/Currency Performance Close ($) 1D% WTD% YTD% Global Indices Performance Close 1D%* WTD%* YTD%* Gold/Ounce 1,232.95 (0.0) (0.0) (5.4) MSCI World Index 2,036.70 (0.2) 2.8 (3.2) Silver/Ounce 14.75 0.0 0.4 (12.9) DJ Industrial 25,270.83 (0.4) 2.4 2.2 Crude Oil (Brent)/Barrel (FM Future) 72.83 (0.1) (6.2) 8.9 S&P 500 2,723.06 (0.6) 2.4 1.8 Crude Oil (WTI)/Barrel (FM Future) 63.14 (0.9) (6.6) 4.5 NASDAQ 100 7,356.99 (1.0) 2.6 6.6 Natural Gas (Henry Hub)/MMBtu 3.26 (2.7) (0.3) (7.9) STOXX 600 364.08 0.0 3.2 (11.4) LPG Propane (Arab Gulf)/Ton 82.00 0.3 (4.7) (16.1) DAX 11,518.99 0.2 2.7 (15.6) LPG Butane (Arab Gulf)/Ton 92.12 (0.1) 1.0 (12.8) FTSE 100 7,094.12 (0.6) 3.3 (11.6) Euro 1.14 (0.2) (0.1) (5.1) CAC 40 5,102.13 0.1 2.6 (9.1) Yen 113.20 0.4 1.2 0.5 Nikkei 22,243.66 2.1 3.8 (2.8) GBP 1.30 (0.3) 1.1 (4.0) MSCI EM 996.72 2.6 6.1 (14.0) CHF 1.00 (0.1) (0.6) (2.9) SHANGHAI SE Composite 2,676.48 3.2 3.8 (23.6) AUD 0.72 (0.2) 1.5 (7.9) HANG SENG 26,486.35 4.4 7.4 (11.6) USD Index 96.54 0.3 0.2 4.8 BSE SENSEX 35,011.65 1.9 5.2 (10.0) RUB 66.20 0.7 0.7 14.9 Bovespa 88,419.05 0.0 2.7 3.7 BRL 0.27 0.1 (1.5) (10.4) RTS 1,134.80 0.3 3.3 (1.7) 77.7 75.1 74.7

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