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QNBFS Daily Market Report October 17, 2018

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The QSE Index rose 2.0% to close at 10,031.6.

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QNBFS Daily Market Report October 17, 2018

  1. 1. Page 1 of 9 QSE Intra-Day Movement Qatar Commentary The QSE Index rose 2.0% to close at 10,031.6. Gains were led by the Real Estate and Transportation indices, gaining 3.2% and 3.0%, respectively. Top gainers were Qatar Cinema & Film Distribution Company and Doha Insurance Group, rising 10.0% and 6.3%, respectively. Among the top losers, Dlala Brokerage & Investment Holding Company fell 2.7%, while Zad Holding Company was down 2.0%. GCC Commentary Saudi Arabia: The TASI Index rose 1.3% to close at 7666.8. Gains were led by the Telecommunication Services and Banks indices, rising 3.8% and 2.3%, respectively. Saudi Industrial Export Co. rose 10.0%, while Saudi Ceramic Co. was up 7.4%. Dubai: The DFM General Index gained 0.5% to close at 2,727.9. The Services index rose 1.8%, while the Consumer Staples. index gained 1.7%. Deyaar Development rose 10.0%, while Almadina for Finance and Investment Company was up 2.2%. Abu Dhabi: The ADX General Index fell marginally to close at 4,930.9. The Industrial and Investment & Financial Services indices declined 1.5% each. Al Dhafra Insurance Co. declined 6.5%, while Gulf Cement Co. was down 4.4%. Kuwait: The Kuwait Main Market Index rose 0.1% to close at 4,672.6. The Oil & Gas index gained 1.2%, while Industrials index rose 0.2%. Kuwait and Middle East Financial Inv. Co. gained 9.6%, while Burgan Co. for Well Drilling. was up 9.5%. Oman: The MSM 30 Index fell 0.2% to close at 4,451.7. Losses were led by the Industrial and Services indices, falling 0.8% and 0.3%, respectively. Al Madina Investment fell 5.0%, while Oman Cement was down 2.9%. Bahrain: The BHB Index fell 0.3% to close at 1,311.6. The Hotels & Tourism index declined 6.6%, while the Commercial Banks index fell 0.8%. Gulf Hotel Group declined 9.5%, while Khaleeji Commercial Bank was down 2.5%. QSE Top Gainers Close* 1D% Vol. ‘000 YTD% Qatar Cinema & Film Distribution 16.53 10.0 0.0 (33.9) Doha Insurance Group 13.40 6.3 2.0 (4.3) Ahli Bank 31.00 5.1 3.0 (16.5) Mazaya Qatar Real Estate Dev. 7.62 4.5 3,464.7 (15.3) The Commercial Bank 39.72 4.5 64.8 37.4 QSE Top Volume Trades Close* 1D% Vol. ‘000 YTD% Mazaya Qatar Real Estate Dev. 7.62 4.5 3,464.7 (15.3) Vodafone Qatar 8.74 2.8 1,059.2 9.0 Qatar First Bank 4.75 0.8 473.7 (27.3) Qatar Gas Transport Company Ltd. 17.88 2.8 312.4 11.1 Qatar Navigation 70.01 4.5 278.6 25.2 Market Indicators 16 Oct 18 15 Oct 18 %Chg. Value Traded (QR mn) 241.1 188.0 28.2 Exch. Market Cap. (QR mn) 559,547.9 548,753.5 2.0 Volume (mn) 8.9 7.5 17.8 Number of Transactions 4,677 4,396 6.4 Companies Traded 43 38 13.2 Market Breadth 33:9 13:23 – Market Indices Close 1D% WTD% YTD% TTM P/E Total Return 17,674.55 2.0 1.7 23.7 15.5 All Share Index 2,948.79 2.0 1.3 20.2 15.2 Banks 3,554.39 1.8 0.6 32.5 13.7 Industrials 3,353.50 1.9 3.2 28.0 16.5 Transportation 2,115.13 3.0 2.3 19.6 12.5 Real Estate 1,876.52 3.2 1.7 (2.0) 15.4 Insurance 3,104.95 0.5 (0.4) (10.8) 27.8 Telecoms 968.30 2.1 0.3 (11.9) 37.0 Consumer 6,962.86 1.0 1.0 40.3 14.1 Al Rayan Islamic Index 3,860.93 1.4 1.4 12.8 15.3 GCC Top Gainers ## Exchange Close # 1D% Vol. ‘000 YTD% Arab National Bank Saudi Arabia 32.70 5.7 2,801.3 32.4 Saudi Telecom Co. Saudi Arabia 83.60 5.3 2,714.7 21.9 Banque Saudi Fransi Saudi Arabia 33.30 5.0 3,999.8 16.4 Saudi Basic Ind. Corp. Saudi Arabia 124.00 4.9 5,999.6 21.6 The Commercial Bank Qatar 39.72 4.5 64.8 37.4 GCC Top Losers ## Exchange Close # 1D% Vol. ‘000 YTD% F. A. Al Hokair Saudi Arabia 19.10 (4.6) 797.8 (37.2) Rabigh Refining & Petro. Saudi Arabia 20.64 (3.9) 3,568.1 25.5 Al Hammadi Dev. & Inv. Saudi Arabia 22.60 (3.8) 428.8 (39.1) Dar Al Arkan Real Estate Saudi Arabia 9.05 (3.3) 30,444.8 (37.2) Oman Cement Oman 0.33 (2.9) 15.3 (19.5) Source: Bloomberg (# in Local Currency) (## GCC Top gainers/losers derived from the S&P GCC Composite Large Mid Cap Index) QSE Top Losers Close* 1D% Vol. ‘000 YTD% Dlala Brokerage & Inv. Holding 11.05 (2.7) 118.8 (24.8) Zad Holding Company 99.01 (2.0) 0.0 34.5 Qatar Electricity & Water Co. 188.12 (1.1) 148.1 5.7 Salam International Inv. Ltd. 4.86 (0.8) 22.2 (29.5) Al Khaleej Takaful Insurance Co. 9.20 (0.8) 7.4 (30.5) QSE Top Value Trades Close* 1D% Val. ‘000 YTD% Industries Qatar 138.00 3.3 30,618.4 42.3 Qatar Electricity & Water Co. 188.12 (1.1) 27,971.9 5.7 Mazaya Qatar Real Estate Dev. 7.62 4.5 26,868.3 (15.3) QNB Group 179.79 1.6 24,743.4 42.7 Qatar Fuel Company 171.20 1.9 21,059.5 67.7 Source: Bloomberg (* in QR) Regional Indices Close 1D% WTD% MTD% YTD% Exch. Val. Traded ($ mn) Exchange Mkt. Cap. ($ mn) P/E** P/B** Dividend Yield Qatar* 10,031.59 2.0 1.7 2.2 17.7 65.98 153,707.8 15.5 1.5 4.4 Dubai 2,727.87 0.5 (1.0) (3.8) (19.1) 59.91 98,158.2 7.3 1.0 6.2 Abu Dhabi 4,930.90 (0.0) (0.7) (0.1) 12.1 48.61 133,281.2 13.0 1.5 4.9 Saudi Arabia 7,666.80 1.3 1.8 (4.2) 6.1 1,998.68 488,146.8 16.2 1.7 3.7 Kuwait 4,672.62 0.1 (1.0) (1.3) (3.2) 63.78 32,095.5 14.5 0.9 4.4 Oman 4,451.65 (0.2) (0.8) (2.0) (12.7) 5.00 19,175.1 10.2 0.8 6.1 Bahrain 1,311.64 (0.3) (0.3) (2.0) (1.5) 3.41 20,217.4 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 9,900 10,000 10,100 9:30 10:00 10:30 11:00 11:30 12:00 12:30 13:00
  2. 2. Page 2 of 9 Qatar Market Commentary  The QSE Index rose 2.0% to close at 10,031.6. The Real Estate and Transportation indices led the gains. The index rose on the back of buying support from non-Qatari shareholders despite selling pressure from Qatari and GCC shareholders.  Qatar Cinema & Film Distribution Company and Doha Insurance Group were the top gainers, rising 10.0% and 6.3%, respectively. Among the top losers, Dlala Brokerage & Investment Holding Company fell 2.7%, while Zad Holding Company was down 2.0%.  Volume of shares traded on Tuesday rose by 17.8% to 8.9mn from 7.5mn on Monday. Further, as compared to the 30-day moving average of 5.8mn, volume for the day was 52.0% higher. Mazaya Qatar Real Estate Development and Vodafone Qatar were the most active stocks, contributing 39.0% and 11.9% 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 Muscat Finance* Oman OMR – – 5.1 13.5% 2.8 -9.9% Dhofar Fisheries and Food Ind.* Oman OMR 5.0 65.3% – – -1.0 N/A Oman Cables Industry* Oman OMR – – – – 5.5 -21.4% Oman Oil Marketing* Oman OMR 468.6 24.7% – – 7.9 17.1% National Life & General Insurance* Oman OMR 109.5 21.0% – – 7.5 4.5% Takaful Oman Insurance* Oman OMR – – – – 1.7 11.9% Salalah Mills* Oman OMR 38.5 -11.0% – – 2.2 -32.2% Salalah Beach Resort* Oman OMR 1.5 30.1% – – -0.4 N/A Gulf International Chemicals* Oman OMR 1.8 -8.4% – – 0.1 -53.4% National Gas* Oman OMR 63.9 15.2% – – 1.5 43.3% Muscat Gases* Oman OMR 6.7 -8.1% – – 0.3 -16.8% Source: Company data, DFM, ADX, MSM, TASI, BHB. (*Financials for 9M2018) Global Economic Data Date Market Source Indicator Period Actual Consensus Previous 10/16 US Federal Reserve Industrial Production MoM September 0.3% 0.2% 0.4% 10/16 UK UK Office for National Statistics Employment Change 3M/3M August -5k 15k 3k 10/16 EU Eurostat Trade Balance SA August 16.6bn 14.7bn 12.6bn 10/16 EU Eurostat Trade Balance NSA August 11.7bn – 17.6bn 10/16 Germany German Federal Statistical Office Import Price Index MoM August 0.0% 0.0% -0.2% 10/16 Germany German Federal Statistical Office Import Price Index YoY August 4.8% 5.2% 5.0% 10/16 China National Bureau of Statistics PPI YoY September 3.6% 3.5% 4.1% 10/16 China National Bureau of Statistics CPI YoY September 2.5% 2.5% 2.3% 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 WDAM Widam Food Company 17-Oct-18 0 Due QNCD Qatar National Cement Company 17-Oct-18 0 Due QEWS Qatar Electricity & Water Company 17-Oct-18 0 Due QIBK Qatar Islamic Bank 17-Oct-18 0 Due DHBK Doha Bank 17-Oct-18 0 Due UDCD United Development Company 17-Oct-18 0 Due NLCS Alijarah Holding 18-Oct-18 1 Due QISI The Group Islamic Insurance Company 21-Oct-18 4 Due ABQK Ahli Bank 21-Oct-18 4 Due QIGD Qatari Investors Group 21-Oct-18 4 Due Overall Activity Buy %* Sell %* Net (QR) Qatari Individuals 28.77% 41.10% (29,710,594.13) Qatari Institutions 24.72% 25.08% (863,276.23) Qatari 53.49% 66.18% (30,573,870.36) GCC Individuals 0.99% 1.25% (624,516.47) GCC Institutions 3.10% 7.17% (9,806,637.64) GCC 4.09% 8.42% (10,431,154.11) Non-Qatari Individuals 12.73% 15.35% (6,312,980.39) Non-Qatari Institutions 29.67% 10.05% 47,318,004.86 Non-Qatari 42.40% 25.40% 41,005,024.47
  3. 3. Page 3 of 9 GWCS Gulf Warehousing Company 22-Oct-18 5 Due IHGS Islamic Holding Group 22-Oct-18 5 Due VFQS Vodafone Qatar 22-Oct-18 5 Due QATI Qatar Insurance Company 23-Oct-18 6 Due KCBK Al Khalij Commercial Bank 23-Oct-18 6 Due CBQK The Commercial Bank 23-Oct-18 6 Due IQCD Industries Qatar 24-Oct-18 7 Due MRDS Mazaya Qatar Real Estate Development 24-Oct-18 7 Due QCFS Qatar Cinema & Film Distribution Company 25-Oct-18 8 Due QFLS Qatar Fuel Company 25-Oct-18 8 Due QIMD Qatar Industrial Manufacturing Company 25-Oct-18 8 Due IGRD Investment Holding Group 28-Oct-18 11 Due BRES Barwa Real Estate Company 28-Oct-18 11 Due GISS Gulf International Services 28-Oct-18 11 Due QOIS Qatar Oman Investment Company 28-Oct-18 11 Due MERS Al Meera Consumer Goods Company 28-Oct-18 11 Due QGMD Qatari German Company for Medical Devices 28-Oct-18 11 Due AKHI Al Khaleej Takaful Insurance Company 28-Oct-18 11 Due MPHC Mesaieed Petrochemical Holding Company 29-Oct-18 12 Due AHCS Aamal Company 29-Oct-18 12 Due QFBQ Qatar First Bank 29-Oct-18 12 Due SIIS Salam International Investment Limited 29-Oct-18 12 Due QGRI Qatar General Insurance & Reinsurance Company 29-Oct-18 12 Due DOHI Doha Insurance Group 29-Oct-18 12 Due ERES Ezdan Holding Group 29-Oct-18 12 Due QNNS Qatar Navigation (Milaha) 30-Oct-18 13 Due MCCS Mannai Corporation 30-Oct-18 13 Due Source: QSE News Qatar  Qatar affirmed at ‘AA-‘ by Fitch with ‘Stable’ Outlook –Qatar’s ‘AA-’ ratings reflect a return to budget surpluses, a strong net external and public sector asset position and one of the world’s highest ratios of GDP per capita. Fitch forecasted Qatar’s general government surplus at 4.7% of GDP in 2018 from a deficit of 2.9% of GDP in 2017, including the estimated investment income on public sector external assets, as the recovery in hydrocarbon revenue outpaces spending. Fitch sees Qatar’s annual fiscal surplus to widen slightly to 5.1% of GDP in 2019, before moderating to 3.3% of GDP in 2020. (Bloomberg)  MCGS posts 104.7% YoY increase but 41.4% QoQ decline in net profit in 3Q2018 – Medicare Group's (MCGS) net profit rose 104.7% YoY (but declined 41.4% on QoQ basis) to QR7.5mn in 3Q2018. The company's operating income came in at QR111.7mn in 3Q2018, which represents an increase of 4.7% YoY. However, on QoQ basis, operating income fell 5.7%. In 9M2018, MCGS reported net profit of QR40.8mn as compared to QR36.3mn for the same period of the previous year. EPS amounted to QR1.45 in 9M2018 as compared to QR1.29 in 9M2017. (QSE)  Tekzen becomes partner in business of Al Meera Holding – Turkey's most wide-spread home improvement company, Tekzen has signed a strategic partnership agreement with Al Meera Holding, the biggest retailer of Qatar. The aim of Al Meera Holding is to create an additional trade volume up to $100mn in the next two years, along with giving priority to Turkish partners. Founded in 2005, Al Meera Holding is the biggest retailer of Qatar for the last 11 years in food and non- food products. (Zawya)  QGTS to disclose 3Q2018 financial statements on October 28 – Qatar Gas Transport Company Limited (QGTS) announced its intent to disclose 3Q2018 financial statements for the period ended September 30, 2018, on October 28, 2018. (QSE)  ZHCD to disclose 3Q2018 financial statements on October 30 – Zad Holding Company (ZHCD) announced its intent to disclose 3Q2018 financial statements for the period ended September 30, 2018, on October 30, 2018. (QSE)  Qatar needs strategy shift to maintain global LNG title – With major changes happening in the global LNG space, both on the supply and demand sides, Qatar needs to readjust its strategy in order to maintain its leading position as global LNG supplier. Delivering Carnegie Mellon University-Qatar Dean’s Lecture Series, Ibrahim Ibrahim, Economic Advisor at Amiri Diwan said on the supply side, major challenges are coming from the development of shale gas in the US and tremendous expansion of LNG supply from Australia. The expected ascendance of LNG positions of Russia and countries in Africa are another major challenge. Speaking on the demand side, Ibrahim said the real change is coming from the expected expansion of gas consumption in giant economies such as China, India, and Brazil, and from many smaller and less developed economies. These changes will have impact not only on the level of LNG price, but also on the conditions of sales such as fixed destination, price indexation, the duration and the prevalence of fixed contracts, and the role of the spot market. In future, Qatar should adhere to the pillars of its already developed LNG
  4. 4. Page 4 of 9 strategy which are: fully integrated model, cost optimization, brand name based on reliability, flexibility, loyalty, and strict compliance to its contractual obligations. Ibrahim wanted Qatar to further intensify the development of its gas resource. Qatar recently lifted the moratorium on expanding production from the North Field, and announced its intention to increase its LNG production capacity by 32mn tons. This decision was based on detailed technical assessment of the North Field reserve during which a long-term moratorium on expansion was imposed. This announcement is expected to affect future projects from marginal suppliers, and the resulting capacity will allow Qatar to maintain its position as a leading world LNG exporter for years to come. (Peninsula Qatar)  QP announces a five-year LPG supply agreement with Oriental Energy – Qatar Petroleum (QP) has announced the signing of a sale and purchase agreement to directly supply China with 600,000 metric tons of Liquefied Petroleum Gas (LPG) per year for a period of five years. The long-term agreement was signed by Qatar Petroleum for Sale of Petroleum Products Company Ltd. (QPSPP) and Oriental Energy (Singapore), with the contract starting in January 2019. QP’s President and CEO, Saad Sherida Al-Kaabiwelcomed the signing, and said, “This agreement reflects our marketing strategy for promoting direct engagement with end-users, especially in China. I will like to thank Oriental Energy for concluding this important agreement. We hope this deal will further enhance our energy relationship with China, as we place greater importance to meeting the needs of the world’s largest growing LPG market.” (Gulf- Times.com)  Qatar Petroleum doubles down on LNG investment plans – LNG Canada's recent final investment decision (FID) announcement has set off a chain reaction, prompting other major LNG players to double down their own plans. Qatar Petroleum (QP) is now ahead of the pack of new potential US LNG FIDs, with plans to make a final decision on Golden Pass LNG in the next few months. Golden Pass is fully permitted and will serve as a focal point for Qatar’s ambitions to diversify global supply and recapture market share. Qatargas also plans to add a fourth train to original expansion plans, pushing the country's output to 110mn metric tons per annum by 2024. FID for the expansion is still expected by end of 2019. The company is therefore targeting to commission almost 49mn metric tons of LNG capacity within the next decade, just shy of China's total expected imports for 2019. (Bloomberg)  Kamco: Qatar’s breakeven oil price rose 95% between 2008 and 2018 – Qatar’s fiscal breakeven price of oil has risen 95% between 2008 and 2018 compared to high three-digit increases in the UAE and Saudi Arabia, according to Kamco based Kuwait. The fiscal breakeven price of oil in Qatar amounted to $47.1 per barrel in 2018 against $24.2 in 2008, Kamco stated in its special report ‘Gulf Cooperation Council (GCC): A Decade since the Global Financial Crisis’. “Initiatives to shore up fiscal balances and transform economies in the GCC are now paramount, as the fiscal breakeven oil price of major oil producers in the region (Saudi Arabia, Kuwait, the UAE and Qatar) are higher by 120% on average,” the report noted, adding the price of Brent crude (spot) is now $82.7 a barrel compared to $35.8 during 2008. (Gulf-Times.com)  Draft program eyed for Joint Germany-Qatar Economic Commission – A working program is being formulated in time for the Joint Germany-Qatar Economic Commission meeting slated in February 2019 in Berlin, according to German Ambassador, Hans-Udo Muzel. The joint commission, which will be headed by both countries’ economy ministers, will steer the direction of the Qatari investments to be poured into the German economy, among other plans, Muzel said. Muzel’s statement comes in the wake of the €10bn Qatar intends to invest in Germany over the next five years, which was announced in Berlin by HH the Amir, Sheikh Tamim bin Hamad Al-Thani. “We are keeping our promise, there is action being taken, there’s lots of work to do and we are looking forward to it,” Muzel stated on the sidelines of a press conference to announce the ‘Back to Business’ networking event slated for October 29. (Gulf-Times.com)  Italy to strengthen ties with Qatar in agro-food sector, says envoy – Amid the growth in agro-food sector in the past two years, Italy is strengthening the ties of Qatari and Italian private sectors in the fields of agriculture and livestock production, feed production and food processing, Italian Ambassador, Pasquale Salzano said. These efforts also include introducing Qatari businessmen to major Italian agricultural products, Salzano said in a speech during a recent press conference that announced the ‘Back to Business’ networking event to be held on October 29. The new agreement between Coldiretti and LuLu marks an important milestone in this direction. Coldiretti, as a matter of fact, is the leading Italian organization of cultivators representing half a million Italian farmers. “The next step, hopefully, will be the opening of Italian-Qatari companies to handle the distribution of Italian food in Doha to meet the fast-growing demand for the outlets of international quality food required to create a sophisticated offer for expats, tourists and, of course, 2022,” Salzano said. (Gulf-Times.com)  Ashghal inks contracts to implement QR2.7bn residential schemes – The Public Works Authority (Ashghal) has signed five contracts worth QR2.7bn with Qatari companies for developing infrastructure facilities for 5,192 plots of land in different areas under the citizens’ residential scheme. At the signing ceremony, Ashghal authorities also announced that at least eight more new contracts for facilitating similar developments will be awarded before the end of the year. The eight projects for citizens’ sub-divisions will be tendered before the end of the year in Al Kharaitiyyat, Ezghawa, Al Ebb and Leabib, Al Mashaf South and Jeryan Njeima. Speaking at the meeting, Ashghal’s President, Saad bin Ahmed Al-Muhannadi recalled that at least 75 projects worth QR12bn were awarded for building infrastructure facilities, including drainage, and also public buildings since the beginning of 2018. (Gulf- Times.com)  New law on exit permits to come into effect on October 28 – The new legislation on exit permits - Law No 13 of 2018, amending certain provisions of Law No 21 of 2015 regulating the entry, exit and residency of expatriates, will come into effect on October 28, the joint committee for coordination between the Ministry of Interior (MoI) and Ministry of Administrative Development, Labor and Social Affairs (MADLSA) announced.
  5. 5. Page 5 of 9 The MADLSA has also called upon employers and establishments subject to the provisions of Labor Law No 14 of 2004 to identify the employees, whose work nature requires prior approval for leaving the country, and submit them through the ministry's website, QNA reported. The percentage of such workers shall not exceed 5% of the total number of employees. (Gulf-Times.com)  Qatar stresses importance of ties between Arab world and Latin America – Qatar has underlined the importance of cooperation between the Arab world and Latin America, highlighting HH the Amir, Sheikh Tamim bin Hamad Al-Thani’s recent visits to Ecuador, Peru, Paraguay and Argentina, and the Arab-South American Summit hosted by Doha in 2009. This came in a speech delivered by Qatar’s Minister of Municipality and Environment, HE Mohamed bin Abdullah Al-Rumaihi, to an international conference about the partnership between the Arab world and Latin America, organized by the Institute for Spanish and Portuguese Studies in Rabat. Minister Al-Rumaihi stressed the need for interaction between the Arab world and Latin American countries which, when combined, account for 30% of the UN member-states. The minister urged commitment to the decisions issued at the summits held between the two sides, especially in terms of visit exchange, and called for holding periodic meetings every year and a half at the level of ministers concerned with trade and industry and chambers of commerce in the Arab world and Latin America, and for forming joint committees in order to follow up the decisions of summits and ministerial councils. The Minister also addressed issues related to trade exchange of food, energy, and raw materials. (Gulf-Times.com)  Qatar bets on Spanish real estate with Inmobiliaria Colonial stake increase – Qatar Investment Authority (QIA) raised its bet on Spanish real estate by doubling its stake in Inmobiliaria Colonial as part of a deal that includes the sale of its shares in property company, Societe Fonciere Lyonnaise. QIA will invest in a non-cash capital increase that will boost its stake to 20%, making it Colonial’s biggest shareholder. The fund will get €203mn ($235mn) from the transaction as Inmobiliaria Colonial also agreed to acquire an additional 22% of Societe Fonciere Lyonnaise in a stock and cash deal valued at €718mn that takes its stake in its French unit to 81%. (Bloomberg)  QDB disburses QR1.5bn loans to SMEs in last 10 months – Qatar Development Bank (QDB) has revealed that it has disbursed over QR1.5bn loans to small and medium enterprises (SMEs), including micro businesses, over the last 10 months of this year, which is already above the target set for 2018, said a senior official of the state-backed agency. QDB, which is mainly responsible for developing and supporting SMEs in the non- hydrocarbons sector, with an aim to achieve economic diversification in the country, offers all kinds of possible support under a wide range of products and services, to establish and promote such businesses, which include providing easy access to financing. The financing is done through different ways, including its Al Dhameen program- a popular credit guarantee scheme by QDB. (Peninsula Qatar)  Total Marketing Qatar and TEC open jointly branded center – Total Marketing Qatar continues to strengthen and consolidate its position in the Qatari market, following its recent agreement with Tyres & Equipment Center (TEC). TEC, an agent for Pirelli tires and also one of the largest importers of tires in Qatar, will now market Total Marketing Qatar lubricants through its network of 16 strategically located retail outlets. (Peninsula Qatar)  ILO Inspectorate praises regulations and laws adopted by Qatar in recent years – International Labor Organization’s (ILO) Inspectorate, Joaquim Pintado has praised the package of laws and regulations adopted by Qatar in recent years to promote fundamental principles and rights related to work and laborers. ILO labor inspectorate said the opening of the ILO office in Doha last April was an important step in taking care of this group, QNA reported. This came during a meeting held by the Qatar Chamber (QC) with a delegation from the ILO, during which they discussed means of enhancing cooperation on common issues and matters related to work and laborers. QC’s Second Vice-Chairman, Rashid bin Hamad Al Athba affirmed the commitment of private sector companies in Qatar to apply international best practices in the field of work and laborers, and abide by all laws and regulations governing the relationship between the employer and his employees. (Peninsula Qatar) International  WEF: US regains crown as most competitive economy for the first time since 2008 – The US economy sits atop the World Economic Forum’s (WEF) annual global competitiveness survey for the first time since the 2007-2009 financial crisis, benefiting from a new ranking methodology this year, the Swiss body stated. In its closely-watched annual Global Competitiveness Report, WEF stated the US is the country closest to the “frontier of competitiveness,” an indicator that ranks competitive productivity using a scale from zero to 100. The US beat Singapore, Germany, Switzerland and Japan, the other top four markets, with a score of 85.6 out of 100, the report stated, due to its “vibrant” entrepreneurial culture and “strong” labor market and financial system. (Reuters)  US industrial output rises; job openings at record high – US industrial production increased for a fourth straight month in September, boosted by gains in manufacturing and mining output, but momentum slowed sharply in the third quarter. Other data showed job openings hit a record high in August, far outpacing a rise in hiring, suggesting that companies were increasingly being starved of workers. There are concerns that the worker shortage, especially in manufacturing and construction industries, could hinder economic growth. The Federal Reserve stated industrial production rose 0.3% last month after increasing 0.4% in August. Economists polled by Reuters had forecasted industrial output rising 0.2% in September. Industrial production grew at a 3.3% annualized rate in the third quarter, decelerating from the 5.3% pace logged in the second quarter. (Reuters)  UK workers see strongest growth in basic pay in nearly a decade – The basic wages of workers in Britain rose at their fastest pace in nearly a decade over the summer months, backing up the Bank of England’s (BoE) view that a long period of weak pay increases is ending. Earnings, excluding volatile bonus payments, rose by an annual 3.1% in the three months to August, the Office for National Statistics stated. That was the highest since January 2009 and above all forecasts in a Reuters
  6. 6. Page 6 of 9 poll of economists. The Pound Sterling increased to its highest level of the day against the US Dollar and government bond prices edged down as investors factored the stronger-than- expected wage growth into their projections for when the BoE will next raise interest rates. Philip Shaw, an economist at Investec, said he expected a rate hike in February, assuming Britain can seal a deal to avoid an economically damaging exit from the European Union in March, followed by another hike later in 2019. (Reuters)  ZEW: Germany’s economic outlook clouded by trade dispute, Brexit – Germany’s economic outlook is clouded by an escalating trade dispute between the US and China and by the growing threat of Britain crashing out of the European Union (EU) without a divorce deal, the ZEW institute stated. “Expectations for the German economy are dampening above all due to the intensifying trade dispute between the US and China,” ZEW’s researcher, Wambach said. “A further negative influence on economic and export expectations is the danger of a ‘hard Brexit’, which is becoming ever more likely,” Wambach added. (Reuters)  China to step up banks' reserve requirement cuts in 2019 as growth risks build – China’s central bank is increasingly expected to cut the amount of funds banks need to hold as reserves next year, as the government looks to funnel cash into an economy hit by slowing domestic demand and a trade war with the US. That should help economic growth hold up in the face of both internal and external challenges, with a Reuters poll showing economists keeping forecasts for GDP growth in 2018 and 2019 unchanged from a July poll. The median forecast of 73 economists Reuters polled was for GDP growth in the world’s second-biggest economy to expand by 6.6% in 2018 and 6.3% in 2019. Since the last poll, China reported second quarter growth of 6.7%, down slightly from 6.8% in the third quarter, and GDP growth is expected to slow to 6.6% and 6.5% in the third and fourth growth quarters, respectively. Economists in the poll expect the People’s Bank of China to keep the reserve requirement rate (RRR) steady for the rest of this year, but forecast a 1.5 percentage point reduction in the rate to 13% by the end of 2019, a deeper cut than the 0.75 percentage point cut tipped in the July poll. The current RRR is 14.5%. (Reuters) Regional  MENA's M&A transaction value surges to $45.1bn in 9M2018 – The value of the merger and acquisition (M&A) transactions with any Middle Eastern and North African (MENA) involvement during the first nine months of the year has hit $45.1bn, up 65% over the same period last year, thus hitting an eight year high, according to Refinitiv, formerly, the financial and risk business division of Thomson Reuters. Deals with a MENA target reached an all-time high rising to $27.1bn, up 89% from the same period in 2017 while inter-MENA or domestic deals were up 106% from year-to-date last year, stated Refinitiv. Energy & Power deals accounted for 28.9% of MENA involvement by value, followed by the financial sector with a 24.5% market share but counting with 91 transactions, 32 more than the 59 recorded in the Energy & Power industry. (GulfBase.com)  Islamic finance blooms in Central Asia, but has hard time in Russia – The growth of Islamic finance in post-Soviet Central Asia, namely in Kazakhstan, is attracting the attention of the international banking industry. The country is on the way to become the new hub for Islamic finance in the entire region, particularly through the new Astana International Financial Center, which was launched this July this year and is focusing on several areas, including asset management, private banking, capital markets development and financial technologies with a special angle on Islamic finance. Experts are at strife as to why it is difficult to bring Islamic finance into gear in Russia. Some said that it is mostly because there is still no legal framework to speak of for the industry, while others believe there is simply not enough mature demand for Islamic banking services for the just little more than 7mn Muslims in a country of 145mn. (GulfTimes.com)  Saudi Arabia-Kuwait talks over two shared oil fields reportedly break down – Discussions between Saudi Arabia and Kuwait over the fields of Khafji and Whafia located in the Neutral Zone, have broken down, S&P Global Platts reported, citing sources. Saudi Arabia’s Crown Prince, Mohammed bin Salman and Kuwaiti Emir, Sabah al-Ahmed failed to resolve issues of sovereignty over the contested area in a meeting on September 30. (Bloomberg)  IMF's Lagarde defers trip to Saudi Arabia as crisis continues – IMF’s Chief, Christine Lagarde deferred her trip to Saudi Arabia, where she had planned to attend the ‘Davos in the Desert’ summit as part of the Saudi Arabia investment conference. Lagarde deferred her trip, adding to a growing number of business and finance leaders who also planned on skipping the event due to the reported death of Saudi Arabian journalist, Jamal Khashoggi. (Bloomberg)  Softbank ‘anxiously’ monitoring Saudi Arabia’s situation – Softbank’s COO, Marcelo Claure said it is “business as usual” at companies backed by its nearly $100bn Vision Fund, despite a tense situation with Saudi Arabia, which provided nearly half of the fund’s capital. Claure said Softbank is “anxiously looking at what is happening” regarding the fate of journalist Jamal Khashoggi. (Reuters)  Saudi Arabia orders restoring of annual allowances to state employees – Saudi Arabia ordered the restoration of annual allowances to all state employees starting from the new year, reported Okaz newspaper. Government-linked Okaz stated the orders came upon “high instructions.” Another online Saudi Arabian media outlet, Sabq, stated the decree came from King Salman bin Abdulaziz. (Reuters)  Maalem Financing raises SR100mn in debut Sukuk – Saudi Arabia-based Maalem Financing raised SR100mn from a debut sale of Sukuk, as the firm seeks to develop a crowdfunding product and expand its operations, a Senior Executive said. The Sukuk from Maalem Financing, a Shari’ah-compliant commercial and consumer financing firm, is a small but novel deal in a market that is dominated by issuance from sovereign institutions and Islamic banks. (Reuters)  Middle East Paper Co. announces banking facility agreement – Middle East Paper Co. signed a SR100mn Shari’ah-compliant loan agreement with Bank Albilad. Middle East Paper Co. will use the credit facility to finance its operating capital and meet its business requirements. (Tadawul)
  7. 7. Page 7 of 9  Clariant says Saudi Arabia commitment to endure any Saudi Aramco-SABIC tie up – Saudi Basic Industries Corporation’s (SABIC) CEO, Ernesto Occhiello said that he sees no impact from any acquisition of SABIC by Saudi Aramco. Chairman Hariolf Kottmann said, “It’s unrealistic that when Saudi Aramco and SABIC are talking that a 25% participation in a small Swiss specialty chemicals company would have any kind of impact.” The Chairman said that SABIC can increase stake and “if they decide to do so, they will let us know.” The Chairman also said that currently they were not working on any divestments. (Bloomberg)  Trump defends Saudi Arabia from criticisms in journalist case – US President, Donald Trump defended Saudi Arabia from what he characterized as efforts to condemn Riyadh over the disappearance of journalist Jamal Khashoggi before all the facts were known, telling the Associated Press in an interview it was a case of “guilty until proven innocent.” (Reuters)  Europe's top bankers shun Saudi investment conference – The bosses of some of Europe’s biggest banks and finance firms have pulled out of a high-profile investment conference in Saudi Arabia, joining a growing list of business chiefs to abandon the event amid widespread concern about the fate of a missing journalist. The Chief Executives of HSBC, Standard Chartered, Credit Suisse and the London Stock Exchange, as well as the Chairman of BNP Paribas withdrew from the future investment initiative. However, BlackRock’s CEO, Larry Fink said that he would not cut ties with Saudi Arabia even as pressure mounts on the country to explain the disappearance of a prominent critic. (Reuters)  UAE’s digital health start-ups raise $11.5bn in 2017 – Arab Health, an exhibition for healthcare and trade professionals in the MENA region, has outlined the role of tech start-ups in playing a more vital role in the healthcare industry in areas such as personalized medicine and more efficient technology enabled care models. The report, titled ‘Technology: Accelerating Innovation Across Healthcare’, revealed that digital health start-ups are said to have raised $11.5bn in 2017, up 27% from 2016, exponentially increasing the pace of digital innovation in healthcare. “Over the years, we have seen growing interest in new products and innovations that will contribute to shaping the future of healthcare. Hospitals, medical device manufacturers and service providers across the globe are facing increasing pressure to innovate in order to become competitive,” said Ross Williams, Exhibition Director of Arab Health. According to Research and Markets, the global wearables medical devices market will reach $14.41bn by 2022, up from $6.22bn in 2017 at a compound annual growth rate of 18.3% during the forecast period. (GulfBase.com)  DP World amends terms of $2bn green loan – Dubai port operator DP World has reprised and extended the maturity of $2bn green loan comprising conventional and Islamic revolving credit facilities, Standard Chartered stated. A total of 19 banks provided the facility, which was extended by two years and was now due in 2023, stated the bank which is coordinating the transaction. The loan pricing is linked to DP World’s carbon emission intensity as a way to incentivize the company to reduce its greenhouse gas emission. (Reuters)  Emaar Development to hold its General Meeting on October 17 to propose distribution of AED1.04bn special dividend – Emaar Development, the UAE build-to-sell property development business majority-owned by Emaar Properties, will hold a General Meeting on October 17, 2018. If the meeting falls short of quorum, the next General Meeting will be held on October 24, 2018. The meeting will discuss the proposal of the board of directors to distribute a special cash dividend of AED1.04bn, representing 26% of the share capital being AED0.026 per share, to the shareholders. (DFM)  SHUAA Capital executes 20% buy-back through Integrated Capital – Shuaa Capital stated that the company has bought back a total of 20% of shares from the open market till October 14. SHUAA Capital bought 1mn shares or 10% of the issued capital at AED1.05 each on October 11, and the company bought back the next 10% or 8.8mn shares for AED1.07 each. The buy-back was done through Integrated Securities. The company plans to buy-back 95mn shares from the shareholders. (GulfBase.com)  BKSB posts 15.6% YoY rise in net profit to OMR21.9mn in 9M2018 – Bank Sohar (BKSB) recorded net profit of OMR21.9mn in 9M2018, an increase of 15.6% YoY. Operating income rose 26.9% YoY to OMR69.7mn in 9M2018. Operating profit rose 38.4% YoY to OMR39.8mn in 9M2018. Total assets stood at OMR3.0bn at the end of September 30, 2018 as compared to OMR2.6bn at the end of September 30, 2017. Net loans and advances stood at OMR2.2bn (+10.8% YoY), while deposits from customers stood at OMR1.7bn (+9.8% YoY) at the end of September 30, 2018. (MSM)  BKIZ's net profit rises to OMR1.3mn in 9M2018 – Alizz Islamic Bank (BKIZ) recorded net profit of OMR1.3mn in 9M2018 as compared to net loss of OMR3.1mn in 9M2017. Net operating income rose 64.8% YoY to OMR14.1mn in 9M2018. Total assets stood at OMR662.7mn at the end of September 30, 2018 as compared to OMR528.5mn at the end of September 30, 2017. Financing receivables stood at OMR556.2mn (+32.3% YoY), while total deposits stood at OMR560.7mn (+33.0% YoY) at the end of September 30, 2018. (MSM)  Revenues of Omani hotels rise 8.7% in the first eight months of 2018 – The total revenue of Omani hotels in the three to five star category rose by 8.7% to OMR131.96mn in the first 8 months of 2018 from OMR121.45mn for the same January- August period of last year. Hotel occupancy rates also increased by 3.4% to 56.5% during the January-August period of 2018 against 54.6% for the same period of 2017, showed the latest monthly statistics released by the National Centre for Statistics and Information. However, the total number of guests in Omani hotels in the January-August period of 2018 declined by 5.3% to 942,514 from 995,541 in the same period of 2017. (GulfBase.com)  Alizz Islamic Bank, Al Raffd Fund sign MoU to finance SMEs – Reinforcing its position as one of the Oman’s most dynamic and innovative Islamic banking institutions, Alizz Islamic Bank has signed an MoU with Al Raffd Fund in the field of financing small and medium enterprises (SMEs). As per the agreement Alizz Islamic Bank will provide facilities and benefits to entrepreneurs nominated by Al Raffd Fund to obtain financing according to the terms and conditions stipulated by the bank.
  8. 8. Page 8 of 9 The nominated entrepreneurs of Al Raffd Fund will benefit from the services provided by Alizz Islamic Bank in the event that the amount exceeds the funding limit of the financing ceiling of the fund’s financing programs. (GulfBase.com)  Oman sells OMR30mn 28-day bills at a yield of 2.22% – Oman sold OMR30mn of bills due November 14 on October 15. Investors offered to buy 1.17 times the amount of securities sold. The bills were sold at a price of 99.83, have a yield of 2.22% and will settle on October 17. (Bloomberg)
  9. 9. 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 9 of 9 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 1.3% 2.0% 0.1% (0.3%) (0.2%) (0.0%) 0.5% (0.8%) 0.0% 0.8% 1.6% 2.4% SaudiArabia Qatar Kuwait Bahrain Oman AbuDhabi Dubai Asset/Currency Performance Close ($) 1D% WTD% YTD% Global Indices Performance Close 1D%* WTD%* YTD%* Gold/Ounce 1,224.94 (0.2) 0.6 (6.0) MSCI World Index 2,091.21 1.8 1.3 (0.6) Silver/Ounce 14.67 (0.2) 0.4 (13.4) DJ Industrial 25,798.42 2.2 1.8 4.4 Crude Oil (Brent)/Barrel (FM Future) 81.41 0.8 1.2 21.7 S&P 500 2,809.92 2.1 1.5 5.1 Crude Oil (WTI)/Barrel (FM Future) 71.92 0.2 0.8 19.0 NASDAQ 100 7,645.49 2.9 2.0 10.7 Natural Gas (Henry Hub)/MMBtu 3.29 0.3 2.2 6.5 STOXX 600 364.99 1.6 1.9 (9.6) LPG Propane (Arab Gulf)/Ton 100.25 2.6 3.9 1.3 DAX 11,776.55 1.4 2.4 (12.1) LPG Butane (Arab Gulf)/Ton 112.13 2.6 4.3 3.3 FTSE 100 7,059.40 0.7 1.1 (10.5) Euro 1.16 (0.0) 0.1 (3.6) CAC 40 5,173.05 1.5 1.7 (6.2) Yen 112.25 0.4 0.0 (0.4) Nikkei 22,549.24 0.9 (0.8) (0.6) GBP 1.32 0.2 0.2 (2.5) MSCI EM 984.66 1.3 0.5 (15.0) CHF 1.01 (0.4) 0.2 (1.6) SHANGHAI SE Composite 2,546.33 (0.8) (2.2) (27.5) AUD 0.71 0.2 0.4 (8.6) HANG SENG 25,462.26 0.1 (1.3) (15.2) USD Index 95.05 (0.0) (0.2) 3.2 BSE SENSEX 35,162.48 1.5 1.8 (10.0) RUB 65.32 (0.5) (1.2) 13.4 Bovespa 85,717.56 3.1 4.7 (0.1) BRL 0.27 0.3 1.6 (11.1) RTS 1,165.87 1.7 2.1 1.0 74.7 73.2 72.4

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