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QNBFS Daily Market Report October 10, 2018

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The QSE Index rose 0.2% to close at 9,840.2

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QNBFS Daily Market Report October 10, 2018

  1. 1. Page 1 of 8 QSE Intra-Day Movement Qatar Commentary The QSE Index rose 0.2% to close at 9,840.2. Gains were led by the Insurance and Telecoms indices, gaining 0.6% and 0.5%, respectively. Top gainers were Islamic Holding Group and Dlala Brokerage & Investment Holding Company, rising 3.5% and 2.2%, respectively. Among the top losers, Ahli Bank fell 7.8%, while Zad Holding Company was down 3.4%. GCC Commentary Saudi Arabia: The TASI Index fell 0.4% to close at 7,904.7. Losses were led by the Energy and Media & Entertainment indices, falling 1.7% and 1.0%, respectively. Jazan Development Co. fell 2.7%, while Advanced Petrochemical was down 2.5%. Dubai: The DFM General Index gained 0.1% to close at 2,777.8. The Services index rose 1.9%, while the Telecommunication index gained 0.4%. Al Salam Group Holding rose 7.6%, while National Central Cooling Co. was up 2.0%. Abu Dhabi: The ADX General Index rose 0.3% to close at 5,020.5. The Real Estate index gained 0.9%, while the Industrial index rose 0.5%. Reem Investments gained 14.9%, while Abu Dhabi National Co. For Building Materials was up 4.3%. Kuwait: The Kuwait Main Market Index rose 0.2% to close at 4,738.3. Basic Materials index gained 2.5%, while Telecommunications index rose 0.3%. Al Aman Investment Co. gained 6.8%, while Tijara & Real Estate Investment was up 6.1%. Oman: The MSM 30 Index rose 0.3% to close at 4,517.4. Gains were led by the Industrial and Financial indices, rising 0.2% and 0.1%, respectively. Raysut Cement rose 2.5%, while Bank Nizwa was up 2.3%. Bahrain: The BHB Index fell 0.1% to close at 1,324.3. The Commercial Banks index declined 0.4%, while the Service index fell 0.3%. BMMI declined 2.8%, while Ahli United Bank was down 0.7%. QSE Top Gainers Close* 1D% Vol. ‘000 YTD% Islamic Holding Group 26.40 3.5 87.8 (29.6) Dlala Brokerage & Inv. Holding Co. 11.50 2.2 48.7 (21.8) Qatar Oman Investment Company 6.02 1.5 1.0 (23.8) Qatar International Islamic Bank 58.44 1.4 26.5 7.0 Widam Food Company 74.50 1.3 3.6 19.2 QSE Top Volume Trades Close* 1D% Vol. ‘000 YTD% Gulf International Services 21.01 0.0 491.3 18.7 Qatar First Bank 4.83 0.6 393.4 (26.0) Qatar Insurance Company 37.50 0.9 268.0 (17.1) Investment Holding Group 5.27 (1.1) 213.8 (13.6) Vodafone Qatar 8.70 0.1 197.7 8.5 Market Indicators 09 Oct 18 08 Oct 18 %Chg. Value Traded (QR mn) 86.5 131.6 (34.3) Exch. Market Cap. (QR mn) 548,135.0 548,534.4 (0.1) Volume (mn) 3.0 4.2 (29.8) Number of Transactions 1,763 2,442 (27.8) Companies Traded 40 41 (2.4) Market Breadth 24:14 19:20 – Market Indices Close 1D% WTD% YTD% TTM P/E Total Return 17,337.30 0.2 (0.6) 21.3 15.2 All Share Index 2,896.44 0.1 (0.8) 18.1 15.0 Banks 3,502.17 (0.1) (1.6) 30.6 13.5 Industrials 3,251.91 0.3 (0.1) 24.1 16.0 Transportation 2,086.45 0.1 (0.3) 18.0 12.3 Real Estate 1,826.26 0.2 (0.2) (4.7) 15.0 Insurance 3,140.36 0.6 (0.0) (9.8) 28.2 Telecoms 961.09 0.5 (0.3) (12.5) 36.7 Consumer 6,874.96 0.0 0.3 38.5 13.9 Al Rayan Islamic Index 3,803.57 0.4 (0.3) 11.2 15.1 GCC Top Gainers ## Exchange Close # 1D% Vol. ‘000 YTD% Qurain Petrochemical Ind. Kuwait 0.39 5.4 2,939.9 18.2 Raysut Cement Oman 0.40 2.5 40.0 (48.2) Co. for Cooperative Ins. Saudi Arabia 56.40 2.2 277.7 (40.3) Etihad Etisalat Co. Saudi Arabia 18.04 1.9 1,919.6 21.6 VIVA Kuwait Telecom Co. Kuwait 0.73 1.5 138.2 (8.6) GCC Top Losers ## Exchange Close # 1D% Vol. ‘000 YTD% Burgan Bank Kuwait 0.26 (2.6) 3,619.5 (10.7) Advanced Petrochem. Co. Saudi Arabia 50.40 (2.5) 677.1 9.8 Middle East Healthcare Saudi Arabia 35.15 (2.5) 498.9 (34.7) National Industrialization Saudi Arabia 18.94 (2.4) 1,513.4 15.5 Nat. Shipping Company. Saudi Arabia 34.10 (2.3) 1,561.0 8.3 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 29.50 (7.8) 0.2 (20.6) Zad Holding Company 100.50 (3.4) 6.1 36.5 Doha Insurance Group 12.60 (1.6) 21.9 (10.0) Qatari German Co for Med. Dev. 4.85 (1.6) 5.9 (24.9) Investment Holding Group 5.27 (1.1) 213.8 (13.6) QSE Top Value Trades Close* 1D% Val. ‘000 YTD% Qatar Fuel Company 167.55 0.3 12,239.4 64.2 Gulf International Services 21.01 0.0 10,430.8 18.7 Qatar Insurance Company 37.50 0.9 10,129.1 (17.1) QNB Group 176.10 (0.5) 10,100.4 39.8 Barwa Real Estate Company 35.80 1.0 4,852.7 11.9 Source: Bloomberg (* in QR) Regional Indices Close 1D% WTD% MTD% YTD% Exch. Val. Traded ($ mn) Exchange Mkt. Cap. ($ mn) P/E** P/B** Dividend Yield Qatar* 9,840.18 0.2 (0.6) 0.3 15.4 23.64 150,572.7 15.2 1.5 4.4 Dubai 2,777.82 0.1 (0.5) (2.0) (17.6) 27.33 99,293.8 7.4 1.0 6.1 Abu Dhabi 5,020.52 0.3 0.3 1.7 14.1 22.21 135,389.0 13.3 1.5 4.8 Saudi Arabia 7,904.74 (0.4) (1.2) (1.2) 9.4 676.96 499,452.4 16.7 1.8 3.5 Kuwait 4,738.31 0.2 (0.1) 0.1 (1.9) 37.14 32,409.7 14.7 0.9 4.4 Oman 4,517.38 0.3 (0.2) (0.6) (11.4) 1.51 19,402.1 11.1 0.8 6.0 Bahrain 1,324.26 (0.1) (0.1) (1.1) (0.6) 2.88 20,423.1 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) 9,800 9,820 9,840 9,860 9:30 10:00 10:30 11:00 11:30 12:00 12:30 13:00
  2. 2. Page 2 of 8 Qatar Market Commentary  The QSE Index rose 0.2% to close at 9,840.2. The Insurance and Telecoms 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.  Islamic Holding Group and Dlala Brokerage & Investment Holding Company were the top gainers, rising 3.5% and 2.2%, respectively. Among the top losers, Ahli Bank fell 7.8%, while Zad Holding Company was down 3.4%.  Volume of shares traded on Tuesday fell by 29.8% to 3.0mn from 4.2mn on Monday. Further, as compared to the 30-day moving average of 6mn, volume for the day was 50.3% lower. Gulf International Services and Qatar First Bank were the most active stocks, contributing 16.6% and 13.3% to the total volume, respectively. Source: Qatar Stock Exchange (* as a % of traded value) Earnings Releases, Global Economic Data and Earnings Calendar Earnings Releases Company Market Currency Revenue (mn) 3Q2018 % Change YoY Operating Profit (mn) 3Q2018 % Change YoY Net Profit (mn) 3Q2018 % Change YoY Packaging Co. Ltd Oman OMR 6.9 -3.2% – – -0.2 N/A Dhofar Poultry Oman OMR 8.1 3.4% 0.3 -12.1% 0.1 -25.1% Salalah Port Services* Oman OMR 40.9 -2.9% – – -1.9 N/A Source: Company data, DFM, ADX, MSM, TASI, BHB. (*Financials for 9M2018) Global Economic Data Date Market Source Indicator Period Actual Consensus Previous 10/09 Germany German Federal Statistical Office Trade Balance August 17.2bn 16.2bn 16.5bn 10/09 Germany German Federal Statistical Office Current Account Balance August 15.3bn 16.2bn 15.1bn 10/09 Germany Deutsche Bundesbank Exports SA MoM August -0.1% 0.4% -0.9% 10/09 Germany Deutsche Bundesbank Imports SA MoM August -2.7% -0.1% 2.8% Source: Bloomberg (s.a. = seasonally adjusted; n.s.a. = non-seasonally adjusted; w.d.a. = working day adjusted) Earnings Calendar Tickers Company Name Date of reporting 3Q2018 results No. of days remaining Status QNBK QNB Group 10-Oct-18 0 Due MARK Masraf Al Rayan 15-Oct-18 5 Due DBIS Dlala Brokerage & Investment Holding Company 15-Oct-18 5 Due MCGS Medicare Group 16-Oct-18 6 Due QNCD Qatar National Cement Company 17-Oct-18 7 Due QEWS Qatar Electricity & Water Company 17-Oct-18 7 Due QIBK Qatar Islamic Bank 17-Oct-18 7 Due DHBK Doha Bank 17-Oct-18 7 Due UDCD United Development Company 17-Oct-18 7 Due NLCS Alijarah Holding 18-Oct-18 8 Due QISI The Group Islamic Insurance Company 21-Oct-18 11 Due ABQK Ahli Bank 21-Oct-18 11 Due QIGD Qatari Investors Group 21-Oct-18 11 Due GWCS Gulf Warehousing Company 22-Oct-18 12 Due IHGS Islamic Holding Group 22-Oct-18 12 Due VFQS Vodafone Qatar 22-Oct-18 12 Due QATI Qatar Insurance Company 23-Oct-18 13 Due KCBK Al Khalij Commercial Bank 23-Oct-18 13 Due CBQK The Commercial Bank 23-Oct-18 13 Due QCFS Qatar Cinema & Film Distribution Company 25-Oct-18 15 Due QFLS Qatar Fuel Company 25-Oct-18 15 Due QIMD Qatar Industrial Manufacturing Company 25-Oct-18 15 Due Overall Activity Buy %* Sell %* Net (QR) Qatari Individuals 35.50% 39.45% (3,418,468.38) Qatari Institutions 12.09% 14.78% (2,327,854.69) Qatari 47.59% 54.23% (5,746,323.07) GCC Individuals 0.78% 0.73% 42,723.38 GCC Institutions 8.41% 4.08% 3,744,098.18 GCC 9.19% 4.81% 3,786,821.56 Non-Qatari Individuals 12.64% 12.66% (17,032.55) Non-Qatari Institutions 30.58% 28.30% 1,976,534.06 Non-Qatari 43.22% 40.96% 1,959,501.51
  3. 3. Page 3 of 8 QOIS Qatar Oman Investment Company 28-Oct-18 18 Due MERS Al Meera Consumer Goods Company 28-Oct-18 18 Due QGMD Qatari German Company for Medical Devices 28-Oct-18 18 Due AKHI Al Khaleej Takaful Insurance Company 28-Oct-18 18 Due SIIS Salam International Investment Limited 29-Oct-18 19 Due QGRI Qatar General Insurance & Reinsurance Company 29-Oct-18 19 Due DOHI Doha Insurance Group 29-Oct-18 19 Due ERES Ezdan Holding Group 29-Oct-18 19 Due Source: QSE News Qatar  Qatar Central Bank to launch platform to support Fintech – Qatar Central Bank’s (QCB) Governor, HE Sheikh Abdulla bin Saoud Al Thani announced that QCB will be launching a banking service platform before the year-end to support and promote the fast growing financial technology (Fintech). This initiative is part of the objective to transform Qatar as a knowledge-based society and enable the country to emerge as a regional hub for such innovative technology and services, including Fintech. (Peninsula Qatar)  CEO: QNB Group’s US Dollar liquidity ‘excellent’; bank has no funding need – QNB Group’s US Dollar liquidity is “excellent” and the bank has no funding need at the moment, the bank’s CEO, Ali Ahmed Al Kuwari said. “We are not in need of funding right now, but once we see an opportunity we will tap the market,” Al Kuwari said. QNB Group, the largest bank by assets in the Middle East and Africa, is in talks to refinance €2.25bn loan due in May next year, sources told Reuters last month. (Peninsula Qatar)  Hamad Port acquires 28% share in Mideast trade – Minister of Transport and Communications, HE Jassim bin Saif Al Sulaiti said that Hamad Port has acquired 28% share in the volume of trade in the Middle East. He was speaking in a panel discussion on the second day of the International Products Exhibition and Conference 2018 (IPEC). The share of Hamad Port in the volume of trade in Qatar in terms of exports and imports has reached 95%, which makes Hamad port an important part of the economy and contributes effectively to people’s daily lives. He added that Hamad Port currently connects more than 40 ports with over 24 shipping services and offers a wide range of guaranteed and reliable options for its customers. (Peninsula Qatar)  Ashghal slated to award deals worth QR10bn to local contractors in five months – The Public Works Authority (Ashghal) has awarded tender contracts worth QR3bn to local contractors in the last two months and there are plans to award more contracts worth QR7bn before the end of the year, Ashghal’s President, Saad bin Ahmad Al-Muhannadi said. He also noted that Ashghal was “able to increase the number of Qatari materials by 65% in one year of the blockade, taking the total to 159 materials.” He made the observations, while participating in a panel discussion titled ‘The role of infrastructure in determining export and import competitiveness’ at the first International Products Exhibition and Conference 2018 (IPEC). He talked about Ashghal's key initiatives to involve local companies in its projects and opportunities to participate in implementing them. Al- Muhannadi said contracts worth QR3.5bn will be awarded to local contractors over the next two weeks, while contracts of a similar value would be awarded in November and December, the official Qatar News Agency (QNA) reported. This takes the total value of contracts awarded - and slated to be awarded - to local contractors to QR10bn in five months. (Gulf-Times.com)  QP targets to increase production capability from 4.8 to 6.5mboe/d – Qatar Petroleum’s (QP) President and CEO, Saad Sherida Al Kaabi said that QP is developing its capabilities in many parts of the world with a target of increasing production capacity from 4.8 to 6.5mn barrels of oil equivalent per day (mboe/d) in 8 years. QP is highly competitive, very reliable, and is ready for the future. QP is investing in safety, efficiency, reliability, technology, preserving the environment, and most importantly, its human capital. Delivering the key note address at the opening of the Oil & Money Conference, which is being held in London under the theme “the New Energy Map”, Al Kaabi said QP is keen on investing in safety, efficiency, reliability, technology, preserving the environment, and most importantly, in human capital. QP also expects to take a final investment decision on its Golden Pass LNG project in the next few months, Al-Kaabi added. (Peninsula Qatar, Bloomberg)  UAB’s Secretary-General: Qatar’s banking sector not affected by blockade – Union of Arab Banks’ (UAB) Secretary-General, Wissam Fattouh said that the banking sector in Qatar is “solid and strong”, and enjoys high flexibility as a result of the prudent monetary policy, which made it on the top of the Arab banking systems. Fattouh said to the Qatar News Agency (QNA) that the blockade imposed on the State of Qatar did not affect its banking system, pointing out that QNB Group has the top ranking among large Arab banks. He pointed out that the effects of the blockade were limited as a result of its strategy of not relying completely on the basic segment of the economy, which is LNG. The official pointed out that the diversification of Qatar’s internal and external investments gave its economy greater flexibility, which enabled the sector to respond to economic crises. He added that the Qatar Central Bank has a very high reserve level of foreign currency, which is the main pillar of the Qatari Riyal. (Gulf-Times.com)  QFC highlights Qatar opportunities at China roadshows – Senior officials from the Qatar Financial Centre (QFC), one of the world’s leading and fastest growing onshore business and financial centers, successfully concluded panel discussions, face-to-face consultations and networking events with professionals from Chinese corporations in Xiamen, Shanghai, Beijing and Tianjin. This follows news that the Bank of China has chosen to join QFC’s onshore regulated platform. The move
  4. 4. Page 4 of 8 reaffirms QFC’s position as the region’s financial center of choice for financial services institutions looking to expand their business to Qatar and to the Middle East. (Peninsula Qatar)  QDB opens registration for 45 retail shops vacant at Al Furjan markets – Qatar Development Bank (QDB) has announced the registration for Al Furjan Markets Phase 1 raffle draw to award 45 retail spaces vacant in existing markets. The registration will start from October 21, 2018 for which the QDB has asked aspirants to apply online. The process will continue for one month. QDB will also offer 350 retail shops during the first half of 2019, through the same raffle draw system under the Al Furjan Markets’ project. (Peninsula Qatar)  Qatar Chamber seeks to strengthen ties with Turkey exporters association – Qatar Chamber discussed ways to enhance cooperation with the West Mediterranean Exporters Association in Turkey, on the sidelines of the association’s participation in the International Products Exhibition and Conference 2018 (IPEC). During the meeting, the Turkish side invited Qatar Chamber to participate in a specialized exhibition organized by the association in April in Antalya, which will be focusing on the health, sports and tourism sectors. Qatar Chamber’s Director-General, Saleh bin Hamad Al-Sharqi praised the strong relations between Qatar and Turkey, which pave the way for greater cooperation between businessmen in the two countries, while also noting the keenness of Qatar Chamber on strengthening cooperation with the West Mediterranean Exporters Association in Turkey. (Gulf-Times.com)  Qatar’s first Free Zone to open early next year – Qatar’s first Special Economic Zone (SEZ) will be ready to receive investors in the first quarter of 2019. Um Al Houl Free Zone, one of the two Free Zones under development, will start receiving both local and foreign investors from early next year, Minister of State and Chairman of the Free Zones Authority, HE Ahmed bin Mohammed Al Sayed announced. Speaking on ‘enabling foreign and local investors to register companies within the Free Zone’, on the second day of the International Products Exhibition and Conference 2018 (IPEC), the Minister said the second Free Zone, Bu Fontas, will also be launched next year. The government is working to bring some iconic projects and locations, including Musheireb, under the Free Zone law. The market will hear major announcements regarding Qatar’s aggressive FDI policies next month, he said. (Peninsula Qatar)  ITUC official: Qatar leads GCC in advancing workers’ rights – Secretary-General of the International Trade Union Confederation (ITUC) Sharan Burrow praised the efforts made by the State of Qatar in the field of labor care and the continuous progress in the development of legislation, aimed at achieving the objectives of this important group of society. At a press conference held at the International Labor Organization (ILO) office in Doha, Burrow said that the ILO office, since its establishment in Qatar, has been monitoring the developments and reforms that have been implemented by the State of Qatar and the significant positive development witnessed in the areas related to workers. She stressed that the State of Qatar has become one of the leading countries in the Gulf to promote workers’ interests and provide their needs, calling on other Gulf States to follow suit. (Peninsula Qatar)  Single window panel helped to set up over 5,000 new firms – The Coordinating Committee for the Single Window System Management has managed to establish over 5,000 local companies and 80 international firms till date and has reduced the time spent on the process of issuing licenses from one year and half to 72 hours only. Speaking during the panel discussion on the second day of the International Products Exhibition and Conference 2018 (IPEC), Salman Mohamed Kaldari, the Chairman of the Coordinating Committee for the Single Window System Management gave an overview about the privileges provided for the foreign investors. (Peninsula Qatar)  Qatar’s real estate transactions exceed QR422mn within a week – The volume of real estate transactions registered with the Real Estate Registration Department at the Ministry of Justice during September 30 to October 4 amounted to QR422,802,320. According to the weekly bulletin issued by the department, the list of real estate sold includes land, housing, residential buildings, commercial buildings, residential complexes, multiuse buildings and commercial buildings. Sales were concentrated in the municipalities of Al Rayyan, Al Daayen, Umm Salal, Doha, Al Khor, Al Dhakira and Al Wakrah. The volume of real estate trading during September 23 to September 27 was QR357,450,721. (Gulf-Times.com)  Qatar aims for self-sufficiency in farm, aqua sector in two years – Qatar is working on several projects aimed at increasing the self-sufficiency levels of the country’s agriculture and aquaculture industries as part of two-year strategy, the Chairman of the Private Sector Development and Support Committee has said. Khamis Ahmed Al-Mohannadi said Qatar had already achieved 92% self-sufficiency in dairy products, and aims to follow up the milestone by raising the current 25% self-sufficiency level for vegetables to 54% in the next two years. To do this, Al-Mohannadi said, the committee implemented several projects, including a greenhouse built over 10 plots of land spanning 100,000 square meters each. The plots of land, he said, were distributed to private sector players. (Gulf-Times.com)  Trade exchange between Qatar, Tunisia increased by 250% – The minister of commerce of the Republic of Tunisia Omar Behi revealed that the Qatari-Tunisian Economic Forum, which was held in Doha last year, contributed to increasing the trade exchange between the two countries by 250%, reflecting the important role the private sector in developing trade between the two countries. Speaking in an opening session at the International Product Exhibition and Conference 2018 (IPEC), the Tunisian minister praised the distinct and strong relations between Qatar and Tunisia, which would contribute to upgrading the bilateral relations to a promising level in the fields of economy, politics and culture. He underlined the important role of the Qatari-Tunisian Economic Forum in raising the levels of bilateral trade, enhancing the partnership between the two countries and opening up new horizons for co- operation for the private sector. (Gulf-Times.com)  Improved ports connectivity enhances Qatar, Pakistan trade relations – The improved ports connectivity between Qatar and Pakistan will play a significant role in expanding the two countries’ trade relations, Pakistan’s Ministry of Commerce Additional Secretary (Trade Diplomacy) Javed Akbar Bhatti
  5. 5. Page 5 of 8 said. “We are developing and improving this network, apart from our Karachi port, which is already functional and has connectivity with the Hamad Port,” he told attendees at a panel discussion during the International Product Exhibition and Conference 2018 (IPEC). Bhatti joined Qatar’s Minister of Transport and Communications, HE Jassim Seif Ahmed Al- Sulaiti, Public Works Authority’s (Ashghal) President, Saad bin Ahmad Al-Muhannadi and Iran’s Bushehr Province Governor, Abdul Karim Grawend in discussing ‘The Role of Infrastructure in Determining Export and Imports Competitiveness’ at the session. The panel also tackled infrastructure projects to facilitate and increase the exports and imports in Qatar, and outlining regulatory compliance with the new trade partners within the Qatar market. (Gulf-Times.com)  Qatar Chamber Chairman inaugurates Al Amodi Centre – Qatar Chamber’s (QC) Chairman, Sheikh Khalifa bin Jassim Al Thani said that QC is a strong booster to local companies and Qatari businessmen, stressing its role in helping them strengthen their position in the local market. The Chairman of Qatar’s largest and oldest private industry representative body inaugurated Al Amodi Centre for building and decoration materials, gypsum products, accessories, sanitary wares and tiles located on Salwa road. (Peninsula Qatar)  Al Houara project first phase ‘to open in 2Q2019’ – Qatari Diar Real Estate Investment Company announced the opening of the first phase of Al Houara project in Tangier, Morocco, in the beginning of the second quarter of 2019. The infrastructure of the QR700mn project will be completed by the end of 2018. (Gulf-Times.com) International  IEA urges OPEC to open taps as oil market enters ‘red zone’ – The International Energy Agency (IEA) made a direct appeal to OPEC and other major oil producers to boost output, warning that high prices are inflicting damage on the global economy. “We should all see the risky situation, the oil markets are entering the red zone,” IEA’s Executive Director, Fatih Birol said. “Expensive energy is back at a bad time, when the global economy is losing momentum. We really need more oil.” Oil prices rallied to a four year high above $85 a barrel in London earlier this month on concern that US sanctions on Iranian crude, along with chronic supply losses in Venezuela, could lead to a shortage. Prices were boosted further by storm Michael, which shut some oil fields in the Gulf of Mexico and threatened to hit the Florida panhandle as a major hurricane. (Peninsula Qatar)  Global financial stability risks rising with trade tensions, IMF says – Risks to the global financial system have risen over the past six months and can increase sharply if pressures in emerging markets escalate or global trade relations deteriorate further, the International Monetary Fund (IMF) stated. The IMF, whose autumn meetings with the World Bank get under way on the Indonesian resort island of Bali this week, also noted that, while financial stability has been shored up by regulators in the decade since the 2008 global financial crisis, easy financial conditions are contributing to a buildup of potential problems related to high debt levels and “stretched” asset valuations. But new bank resolution regimes meant to avoid future bailouts are largely untested, IMF said in its biannual global financial stability update. IMF noted that economic growth appears to have peaked in some major economies while the gap between advanced countries and emerging markets was widening. IMF on October 9 cut its global growth forecasts due to an escalating US-China trade war and growing financial strains on emerging markets. (Reuters)  German firms would face billions in extra tariffs in hard Brexit – German firms would face extra tariffs of more than €3bn ($3.4bn) a year if Britain quits the European Union (EU) without a trade deal, and their exports to Britain might drop by up to 57%, Germany’s IW institute stated. Talks on ending four decades of Britain’s membership in the European Union have entered their final stage more than two years after Britons voted for Brexit. A hard Brexit would mean Britain leaving the bloc with no trade deal. The BDI industry association - one of Germany’s most influential lobby groups - stated a breakthrough in Brexit negotiations was needed on October 17- 18 summit in Brussels. A hard Brexit will cause huge difficulties for tens of thousands of companies in Europe and hundreds of thousands of employees in Britain and the European Union. (Reuters)  Weak German trade suggests meager growth in third quarter – German exports unexpectedly fell in August, data showed, in a fresh sign that manufacturers in Europe’s largest economy shifted into a lower gear over the summer months. The Federal Statistics Office stated seasonally adjusted exports edged down by 0.1% on the month, missing a Reuters forecast of 0.3% rise. Imports dropped by 2.7%, undershooting a predicted 0.2% fall. ING economist Carsten Brzeski blamed the low trade volumes over the summer months on a general weakening of global manufacturing activity and a temporary blip in domestic demand. Household spending has become an important growth driver in Germany as consumers are reaping the benefits of record employment levels, rising real wages, increased job security and cheap credit due to the Eurozone’s expansive monetary policy. The seasonally adjusted trade surplus widened to €18.3bn ($21.0bn) in August from €15.9bn in the previous month, the data showed. Germany’s wider current account surplus, which measures the flow of goods, services and investments, rose to €15.3bn from €15.1bn in July, unadjusted data showed. The trade figures chimed with data released showed industrial output edging down unexpectedly in August, suggesting the German economy lost steam in the third quarter. (Reuters)  Japan’s August core machinery orders point to more capex gains – Japan’s core machinery orders unexpectedly rose in August after robust gains in the previous month in a sign that capital spending is set to grow as companies invest in new equipment and software to manage labor shortages. The 6.8% increase in core machinery orders, a highly volatile data series regarded as a leading indicator of capital spending, compared with the median estimate for a 4.0% decline in a Reuters poll. In July core orders rose 11.0%, the fastest increase since January 2016. Japanese companies’ capital expenditure plans remain strong for the current fiscal year, a Bank of Japan tankan survey showed last week, as companies increase investment in automation and labor-saving technologies. The trade war
  6. 6. Page 6 of 8 between the US and China poses a risk to the outlook because it could indirectly reduce sales from China, making some Japanese manufacturers less likely to buy new equipment. (Reuters) Regional  Middle East ports’ future success hinges on innovative practices – From 2011 through 2016, the compound annual growth rate (CAGR) of container throughput at Middle Eastern ports was measured at 4%, which exceeded the global average. Moreover, the throughput growth rates of other types of seaborne cargo have also been impressive. Following a period of strong growth, there are causes for concern. Overcapacity, exposure to trans-shipment and lagging port productivity threaten to slow or even reverse the upward trajectory of the region’s ports. Hence, ports in the region have to explore alternative routes to mitigate these challenges. “Middle East ports accounts for less than 3% of global GDP, while its ports handle approximately 20% of global seaborne trade. This disproportionate share is the result of both geographic advantages and well-executed investments,” Giovanni Moscatelli, Partner & Managing Director at The Boston Consulting Group Middle East said. (Gulfbase.com)  World’s top Sukuk arranger says issuance is likely past its peak – Global sales of Islamic bonds have peaked and are expected to retreat this year following record issuance in 2017, according to the debt’s top arranger. Weaker growth prospects in the Middle East and rising US interest rates will see issuance shrinking to $40bn to $45bn in 2018, compared to $56bn last year, according to CIMB Islamic Bank Berhad’s CEO, Rafe Haneef. At least Malaysia, which pioneered Islamic bonds, should see sales holding up well as consumer sentiment stays positive, he said. GCC countries, which account for about half of Sukuk issuance, are still grappling with the collapse of crude prices four years ago. (Gulf-Times.com)  Saudi Aramco, Total plan around $5bn petchem complex in Jubail – Saudi Aramco, a leading global energy company, and French oil and gas major Total have signed a joint development agreement for the front end engineering and design (FEED) of a giant petrochemical complex in Jubail. Announced in April 2018, the world-class complex will be located next to the SATORP state of the art refinery, operated by Saudi Aramco (62.5%) and Total (37.5%), in order to fully exploit operational synergies. The project represents an investment of approximately $5bn and is scheduled to start-up in 2024. (Gulfbase.com)  NCB Capital advises finance firms on IPOs – NCB Capital, the investment banking unit of Saudi Arabia’s largest lender, is advising two local finance companies, Amlak International for Real Estate Finance (Amlak) and Nayifat Finance (Nayifat), on possible share listings, according to sources. Both Amlak and Nayifat operate within sectors the government is keen to develop. Amlak, founded in Riyadh in 2007 with a paid up capital of SR906mn, provides real estate financing, while Nayifat offers financing to small and medium-sized enterprises and consumer finance. (Reuters)  CFO: Almarai faces cost pressure – Saudi Arabia-based dairy company Almarai aims to be more innovative to maintain profitability as it faces cost pressures, according to Almarai’s CFO, Paul Louis Gay. Gay said, “We will be under pressure. Pressure will come from all angles of the cost of the value chain: input cost, labor cost, tax. We have to be reactive as we have proven to be in the past and innovative in the way we work to maintain those levels of profit. Our competitive edge is to be locally present here, maintaining a supply of products. We have been able with the volume we are reaching, to match the two— certainty of supply and cost.” Almarai’s Head of Finance, Ikram ul-Haque said, "Last year we received SR289mn or SR300mn given the fact we’re using more alfalfa. More than likely the number is going to be SR100mn more and we are on track for that. The exact number will be disclosed in our annual accounts.” (Bloomberg)  Clariant CEO expects to gain CHF1-2bn from disposals – Swiss specialty chemicals maker Clariant expects to raise CHF1-2bn from selling portions of its plastics and coatings business, Clariant’s CEO, Hariolf Kottmann said. Clariant and 25% shareholder Saudi Basic Industries Corp (SABIC) are merging their high performance materials businesses, a move that will include the sale of some plastics and coatings activities. Kottmann, who is stepping down as CEO to become Chairman of Clariant, said he is still convinced SABIC has no plans to take its stake to a majority. Some analysts have said they do not expect SABIC to be satisfied with merely a minority holding. (Reuters)  Etihad Airways linked-EA Partners seek creditor consent for claims sales – Etihad Airways linked EA Partners I and II vehicles ask creditors holding $1.2bn in bonds to approve sale of claims under terms of offers disclosed in August, according to statements. At least 75% of holders of each bond needed to approve resolutions, with more than 50% voting. (Bloomberg)  Dubai’s whole economy PMI falls to 54.4 in September – Emirates NBD and IHS Markit’s purchasing managers’ index (PMI) for Dubai’s whole economy fell to 54.4 in September 2018 from 55.2 in both August 2018 and September 2017. This is the lowest rating since April 2018. (Bloomberg)  DP World’s CEO sees different investment opportunities – Dubai ports operator DP World sees opportunities to boost investments in Africa, Latin America, Indonesia, Malaysia and India, according to DP World’s Chairman and CEO, Sultan bin Sulayem. (Bloomberg)  Fitch places Kuwait Energy’s ‘CCC’ rating on watch evolving – Fitch Ratings (Fitch) placed Kuwait Energy’s Long-Term Issuer Default Rating (IDR) of ‘CCC’ on Rating Watch Evolving (RWE) following the announcement of its proposed acquisition by Hong Kong listed United Energy Group Ltd. The company's $250mn 9.5% notes due in 2019 rated ‘CCC’/Recovery Rating ‘RR4’ have also been placed on RWE. Kuwait Energy's standalone ‘CCC’ rating is driven mainly by its weak liquidity position. The proposed acquisition comprises an equity consideration of $491mn plus the assumption of Kuwait Energy's outstanding debt. The RWE is predicated on the short- term liquidity risk should the deal fail to complete without alternative sources of funding in place to repay Kuwait Energy's $250mn notes. Under this scenario, the ratings could be further downgraded to reflect the heightened probability of default as the August 2019 bond maturity approaches. (Bloomberg)  Oman sells OMR2.5mn 182-day bills at a yield of 2.446% – Oman sold OMR2.5mn of bills due April 10, 2019 on October 8.
  7. 7. Page 7 of 8 The bills were sold at a price of 98.795, have a yield of 2.446% and will settle on October 10. (Bloomberg)  Cargo handling from Salalah gets a boost – The new cargo terminal at Oman’s Salalah International Airport (Salalah) promises boost in cargo handling in Salalah, which is fast emerging as a major link for sea air cargo movement from Far East and Indian Subcontinent to Europe, Africa and the US. According to a senior official responsible for cargo movement at the airport, the new facility is a value addition to the port city’s strategic location as the shipment from Salalah is likely to be cheaper due to short shipment time and the location’s capacity to handle sea, air and road for transportation of goods. Salalah’s Commercial and Marketing Manager, Ali al Yafai spoke about the key advantages of Salalah as centre of cargo handling. The key advantages, according to him, are linking-pin between East and West, not only on the sea shipping lines but also by air. Salalah has a competitive advantage supported by a mega- container port and reduced time of connections to key markets. (Gulfbase.com)  Bahrain's VAT to boost non-oil revenues and stabilize public debt – Bahrain's move to introduce a value-added tax, days after Gulf allies pledged a $10bn aid package, will boost the Kingdom's non-oil revenues and stabilize the public debt burden. Imposing a 5% VAT in 2019, combined with wider financial measures, sends a positive signal to the market that Bahrain is serious about fiscal reform, analysts said. Fitch Solutions forecasts 25% jump in non-oil revenues in 2019 after the introduction of VAT. "On the whole, VAT implementation is a welcome step towards non-oil revenue generation and evidence of Bahrain’s institutional capacity to respond to its current vulnerable fiscal position," Ehsan Khoman, Head of Mena research and strategy at MUFG Bank, said. (Gulfbase.com)  Bahrain does not plan new US Dollar bond issue this year – Bahrain does not plan to issue new US Dollar denominated bonds this year, after the Kingdom secured a $10bn aid package from Gulf neighbors last week, sources said. A government spokesperson confirmed that in light of the government’s recently announced fiscal balance program, there was no plan to issue a new bond this year. (Reuters)
  8. 8. 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 8 of 8 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 (0.4%) 0.2% 0.2% (0.1%) 0.3% 0.3% 0.1% (0.5%) 0.0% 0.5% SaudiArabia Qatar Kuwait Bahrain Oman AbuDhabi Dubai Asset/Currency Performance Close ($) 1D% WTD% YTD% Global Indices Performance Close 1D%* WTD%* YTD%* Gold/Ounce 1,189.79 0.1 (1.1) (8.7) MSCI World Index 2,138.46 (0.2) (0.6) 1.7 Silver/Ounce 14.38 0.1 (1.8) (15.1) DJ Industrial 26,430.57 (0.2) (0.1) 6.9 Crude Oil (Brent)/Barrel (FM Future) 85.00 1.3 1.0 27.1 S&P 500 2,880.34 (0.1) (0.2) 7.7 Crude Oil (WTI)/Barrel (FM Future) 74.96 0.9 0.8 24.1 NASDAQ 100 7,738.02 0.0 (0.6) 12.1 Natural Gas (Henry Hub)/MMBtu 3.40 2.7 3.7 10.0 STOXX 600 372.93 0.2 (1.2) (8.5) LPG Propane (Arab Gulf)/Ton 103.75 (0.4) (0.5) 4.8 DAX 11,977.22 0.3 (1.4) (11.5) LPG Butane (Arab Gulf)/Ton 119.00 (1.7) (1.9) 9.7 FTSE 100 7,237.59 0.5 (0.8) (8.6) Euro 1.15 (0.0) (0.3) (4.3) CAC 40 5,318.55 0.3 (1.0) (4.4) Yen 112.96 (0.2) (0.7) 0.2 Nikkei 23,469.39 (0.8) (0.8) 2.6 GBP 1.31 0.4 0.2 (2.7) MSCI EM 993.99 (0.2) (0.7) (14.2) CHF 1.01 0.1 0.0 (1.7) SHANGHAI SE Composite 2,721.01 0.3 (4.3) (22.7) AUD 0.71 0.4 0.7 (9.0) HANG SENG 26,172.91 (0.1) (1.5) (12.8) USD Index 95.67 (0.1) 0.0 3.8 BSE SENSEX 34,299.47 (0.7) (0.1) (13.2) RUB 66.28 (0.4) (0.5) 15.0 Bovespa 86,087.55 1.0 8.9 0.0 BRL 0.27 1.7 3.5 (10.8) RTS 1,159.47 0.1 0.0 0.4 75.8 73.5 71.8

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