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QNBFS Daily Market Report October 3, 2018

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The QSE Index rose 0.3% to close at 9,817.1

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QNBFS Daily Market Report October 3, 2018

  1. 1. Page 1 of 8 QSE Intra-Day Movement Qatar Commentary The QSE Index rose 0.3% to close at 9,817.1. Gains were led by the Industrials and Transportation indices, gaining 1.0% and 0.9%, respectively. Top gainers were Ahli Bank and Gulf International Services, rising 5.3% and 3.3%, respectively. Among the top losers, Qatar Oman Investment Company fell 2.8%, while Dlala Brokerage & Investment Holding Company was down 2.5%. GCC Commentary Saudi Arabia: The TASI Index fell 0.7% to close at 7,981.2. Losses were led by the Consumer Services and Retailing indices, falling 1.6% and 1.3%, respectively. Banque Saudi Fransi declined 3.8%, while United Electronics Co. was down 3.7%. Dubai: The DFM General Index declined 0.4% to close at 2,838.7. The Invest. & Fin. Services index fell 2.2%, while the Real Estate & Const. index declined 0.8%. Dar Al Takaful fell 2.8%, while Dubai Investments was down 2.6%. Abu Dhabi: The ADX General Index rose 0.3% to close at 4,993.9. The Energy index gained 1.6%, while the Telecommunication index rose 0.5%. Sudan Telecommunication Co. gained 4.4%, while Dana Gas was up 2.6%. Kuwait: The Kuwait Main Market Index declined 0.1% to close at 4,738.9. The Financial Services index fell 0.6%, while the Real Estate index declined 0.4%. Mena Real Estate Company fell 10.0%, while Kuwait Finance & Investment Company was down 9.8%. Oman: The MSM 30 Index fell 0.1% to close at 4,535.3. However, all indices ended in green. Oman Chlorine fell 5.1%, while SMN Power Holding was down 4.3%. Bahrain: The BHB Index fell 0.4% to close at 1.330.0. The Industrial index declined 0.8%, while Commercial Banks index fell 0.6%. Nass Corporation declined 3.1%, while National Bank of Bahrain was down 1.6%. QSE Top Gainers Close* 1D% Vol. ‘000 YTD% Ahli Bank 32.00 5.3 0.5 (13.8) Gulf International Services 19.99 3.3 1,019.8 12.9 Qatari Investors Group 30.72 2.0 15.8 (16.1) Medicare Group 64.96 2.0 20.0 (7.0) The Commercial Bank 40.30 2.0 49.7 39.4 QSE Top Volume Trades Close* 1D% Vol. ‘000 YTD% Gulf International Services 19.99 3.3 1,019.8 12.9 Mesaieed Petrochemical Holding 17.15 1.6 944.8 36.2 Doha Bank 21.40 1.4 437.1 (24.9) Industries Qatar 127.85 0.5 363.0 31.8 Qatar First Bank 4.82 (0.4) 222.3 (26.2) Market Indicators 02 Oct 18 01 Oct 18 %Chg. Value Traded (QR mn) 184.2 179.3 2.7 Exch. Market Cap. (QR mn) 549,290.7 547,562.2 0.3 Volume (mn) 4.9 4.3 12.3 Number of Transactions 2,609 2,956 (11.7) Companies Traded 42 43 (2.3) Market Breadth 25:16 18:23 – Market Indices Close 1D% WTD% YTD% TTM P/E Total Return 17,296.59 0.3 0.3 21.0 15.2 All Share Index 2,895.23 0.2 0.2 18.1 15.0 Banks 3,519.63 0.0 (0.1) 31.2 13.6 Industrials 3,245.64 1.0 2.3 23.9 16.0 Transportation 2,053.72 0.9 1.8 16.2 12.1 Real Estate 1,806.98 (0.2) (2.6) (5.7) 14.9 Insurance 3,145.70 0.4 (0.7) (9.6) 28.2 Telecoms 964.25 (0.2) (0.8) (12.2) 36.8 Consumer 6,840.93 (0.5) 1.0 37.8 13.9 Al Rayan Islamic Index 3,789.73 0.3 0.1 10.8 15.0 GCC Top Gainers ## Exchange Close # 1D% Vol. ‘000 YTD% DP World Dubai 18.94 3.2 193.8 (24.2) Saudi Kayan Petrochem. Saudi Arabia 17.42 2.5 20,133.8 63.1 Mobile Telecom. Co. Saudi Arabia 6.32 2.3 5,775.9 (13.5) Co. for Cooperative Ins. Saudi Arabia 56.20 2.2 444.3 (40.5) The Commercial Bank Qatar 40.30 2.0 49.7 39.4 GCC Top Losers ## Exchange Close # 1D% Vol. ‘000 YTD% Banque Saudi Fransi Saudi Arabia 31.95 (3.8) 489.8 11.7 Bank Dhofar Oman 0.16 (3.7) 1,593.0 (23.1) Mouwasat Med. Serv. Co. Saudi Arabia 80.70 (3.0) 65.6 6.6 Aldar Properties Abu Dhabi 1.75 (2.8) 11,552.5 (20.5) Samba Financial Group Saudi Arabia 31.40 (2.6) 656.6 33.6 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% Qatar Oman Investment Co. 5.88 (2.8) 2.8 (25.6) Dlala Brokerage & Inv. Holding 11.44 (2.5) 174.2 (22.2) Al Khaleej Takaful Insurance Co. 9.20 (1.8) 2.9 (30.5) Islamic Holding Group 25.62 (1.6) 1.6 (31.7) Widam Food Company 74.55 (1.4) 22.3 19.3 QSE Top Value Trades Close* 1D% Val. ‘000 YTD% Industries Qatar 127.85 0.5 46,667.7 31.8 QNB Group 177.80 0.0 24,225.2 41.1 Qatar Fuel Company 165.01 (1.2) 21,296.6 61.7 Gulf International Services 19.99 3.3 20,254.2 12.9 Mesaieed Petrochemical Holding 17.15 1.6 16,085.4 36.2 Source: Bloomberg (* in QR) Regional Indices Close 1D% WTD% MTD% YTD% Exch. Val. Traded ($ mn) Exchange Mkt. Cap. ($ mn) P/E** P/B** Dividend Yield Qatar* 9,817.07 0.3 0.3 0.0 15.2 50.35 150,890.2 15.2 1.5 4.5 Dubai 2,838.71 (0.4) 0.5 0.1 (15.8) 53.40 100,926.6 7.6 1.1 6.0 Abu Dhabi 4,993.90 0.3 0.9 1.2 13.5 64.03 135,062.3 13.2 1.5 4.8 Saudi Arabia 7,981.19 (0.7) 1.0 (0.2) 10.4 897.16 505,187.9 16.8 1.8 3.5 Kuwait 4,738.90 (0.1) (0.5) 0.1 (1.8) 40.51 32,479.6 14.6 0.9 4.4 Oman 4,535.34 (0.1) 0.3 (0.2) (11.1) 4.75 19,484.7 11.2 0.8 6.0 Bahrain 1,329.95 (0.4) (1.4) (0.6) (0.1) 13.90 20,450.0 9.0 0.8 6.2 Source: Bloomberg, Qatar Stock Exchange, Tadawul, Muscat Securities Market and Dubai Financial Market (** TTM; * Value traded ($ mn) do not include special trades, if any) 9,760 9,780 9,800 9,820 9,840 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 0.3% to close at 9,817.1. The Industrials and Transportation indices led the gains. The index rose on the back of buying support from Qatari and non-Qatari shareholders despite selling pressure from GCC shareholders.  Ahli Bank and Gulf International Services were the top gainers, rising 5.3% and 3.3%, respectively. Among the top losers, Qatar Oman Investment Company fell 2.8%, while Dlala Brokerage & Investment Holding Company was down 2.5%.  Volume of shares traded on Tuesday rose by 12.3% to 4.9mn from 4.3mn on Monday. However, as compared to the 30-day moving average of 6.2mn, volume for the day was 20.8% lower. Gulf International Services and Mesaieed Petrochemical Holding Company were the most active stocks, contributing 20.9% and 19.4% to the total volume, respectively. Source: Qatar Stock Exchange (* as a % of traded value) Global Economic Data and Earnings Calendar Global Economic Data Date Market Source Indicator Period Actual Consensus Previous 10/02 EU Eurostat PPI MoM August 0.3% 0.2% 0.7% 10/02 EU Eurostat PPI YoY August 4.2% 3.8% 4.3% 10/02 Japan ESRI Consumer Confidence Index September 43.4 43.1 43.3 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 QNBK QNB Group 10-Oct-18 7 Due MARK Masraf Al Rayan 15-Oct-18 12 Due DBIS Dlala Brokerage & Investment Holding Company 15-Oct-18 12 Due MCGS Medicare Group 16-Oct-18 13 Due QNCD Qatar National Cement Company 17-Oct-18 14 Due QEWS Qatar Electricity & Water Company 17-Oct-18 14 Due QIBK Qatar Islamic Bank 17-Oct-18 14 Due DHBK Doha Bank 17-Oct-18 14 Due UDCD United Development Company 17-Oct-18 14 Due NLCS Alijarah Holding 18-Oct-18 15 Due GWCS Gulf Warehousing Company 21-Oct-18 18 Due ABQK Ahli Bank 21-Oct-18 18 Due QIGD Qatari Investors Group 21-Oct-18 18 Due KCBK Al Khalij Commercial Bank 23-Oct-18 20 Due CBQK The Commercial Bank 23-Oct-18 20 Due AKHI Al Khaleej Takaful Insurance Company 28-Oct-18 25 Due ERES Ezdan Holding Group 29-Oct-18 26 Due Source: QSE Overall Activity Buy %* Sell %* Net (QR) Qatari Individuals 32.82% 36.76% (7,265,904.72) Qatari Institutions 23.05% 18.20% 8,919,407.47 Qatari 55.87% 54.96% 1,653,502.75 GCC Individuals 0.61% 1.13% (957,820.45) GCC Institutions 7.84% 14.71% (12,660,799.81) GCC 8.45% 15.84% (13,618,620.26) Non-Qatari Individuals 10.52% 10.12% 734,396.87 Non-Qatari Institutions 25.17% 19.08% 11,230,720.64 Non-Qatari 35.69% 29.20% 11,965,117.51
  3. 3. Page 3 of 8 News Qatar  Qatar’s central bank sells QR500mn of Treasury bills – Qatar's central bank sold QR500mn of Treasury bills with maturities of three, six and nine months. It sold QR200mn of three-month bills at a yield of 2.18%, QR200mn of six-month bills at 2.48% and QR100mn of nine-month bills at 2.75%. (Zawya)  Al Khalij Commercial Bank selling $500mn in bonds – Al Khalij Commercial Bank is selling $500mn in five-year bonds offering 175 basis points over mid-swaps, according to a bank document seen by Reuters. Orders for the Qatari lender's debt issue topped $1.4bn. The bank, rated ‘A3’ by Moody's and Fitch, has hired Barclays, QNB Capital, Standard Chartered Bank and The Commercial Bank to arrange the issue. (Zawya)  Ahli Bank postpones $500mn bond sale to 1Q2019 – Ahli Bank has postponed its $500mn bond sale to 1Q2019. The lender will raise the final tranche of its $1.5bn bond program next year, according to Ahli Bank’s Acting CEO, Mahmoud Malkawi. (Bloomberg)  Qatalum applies for listing on QSE – QFMA’s CEO, Nasser Ahmad Al Shaibi said that Qatar Aluminum Company (Qatalum) has applied for Qatar Stock Exchange (QSE) listing and the Authority is in contact with the concerned authorities in order to finalize listing procedures, and a press conference is scheduled to announce all details on the subject. Qatalum is an equal joint venture between Qatar Petroleum and Hydro Aluminum of Norway produces more than 610,000 tons of high- quality primary aluminum products per annum from twin 1.2 kilometers potlines. Qatalum’s complex facilities include a carbon plant, port and storage facilities, as well as a captive power plant. (Peninsula Qatar)  IIF: Qatar’s external, fiscal balances to show marked improvement this year – Qatar’s external and fiscal balances are expected to show marked improvement this year despite the ongoing economic blockade and growing emerging market stress, according to a US-based economic think-tank. Although the diplomatic rift with the Saudi Arabia-led bloc is well into its second year and shows no signs of abating, economic activity has continued to pick up in Qatar, according to the Institute of International Finance (IIF). Qatar's fiscal balance is on track to return to a surplus for the first time since 2015, and remain in surplus next year. Higher hydrocarbon prices are the major driver for 2018, while non-hydrocarbon revenues are likely to increase in 2019, with the scheduled introduction of a comprehensive Value Added Tax (VAT). However, uncertainty remains over VAT implementation in view of continued high oil prices, IIF stated, highlighting that there has been 37% rise in average oil prices in 2018. The country's fiscal surplus amounted to 3.5% of Gross Domestic Product (GDP) this year, and seen further to 3.7% in 2019 compared with fiscal deficit of 2.7% in 2017. Growth is likely to rise from 1.6% in 2017 to around 2.3% in 2018, primarily on the back of the non- hydrocarbon sector (driven by construction), but aided by stable hydrocarbon production after several years of contraction. (Gulf-Times.com)  Qatar’s public debt seen falling continually over next few years – Qatar’s public debt as a percentage of the country’s GDP will fall continually over the next few years, a recent research by FocusEconomics has showed. The country’s public debt as a percentage of its GDP is seen at 53.4% this year, and will fall to 50.8% in 2019, 49.2% in 2020, 49.1% in 2021 and 48.9% in 2022. According to FocusEconomics, Qatar’s economy “performed well” in recent months, after growth decelerated in the first quarter, the last quarter for which GDP data is available. In August, business conditions in the non-oil economy improved for the 13 th straight month, although to a weaker degree than in July. Moreover, in July, industrial activity grew from the previous month last year on the back of a strong expansion in crude oil and natural gas production. Qatar’s economic growth will be driven by higher oil prices and the infrastructure push related to the 2022 FIFA World Cup this year and next year, the report noted. FocusEconomics panelists forecast growth of 2.6% in 2018 and 2.7% in 2019, which is down 0.1 percentage points from last month’s projection. (Gulf-Times.com)  Doha Bank signs deal with Bank of Ceylon for remittance to Sri Lanka – Doha Bank entered into an agreement with Bank of Ceylon, the largest bank in Sri Lanka, for remittance of funds from Qatar to Sri Lanka. The signing ceremony was held during the event ‘Qatar – Sri Lanka Bilateral Opportunities’. (Peninsula Qatar)  Al Kaabi: Japan is Qatar’s most vital LNG customer – Qatar Petroleum’s (QP) President and CEO, Saad Sherida Al Kaabi began a working visit to Japan, and talks with senior executives of major Japanese companies on enhancing relations and cooperation in the energy field. The two days of talks focus on a number of issues related to developing bilateral relations and cooperation with various Japanese customers and partner companies, particularly in the LNG trade. They include high- level discussions with Chairmen, Presidents, and senior executives of a number of Japanese energy, power generation, and shipping corporations and companies as well as financial institutions such as Mitsubishi Corporation, JGC Corporation, JERA, Cosmo Energy Holdings, Cosmo Oil, Mitsui, Itochu, Mizuho Bank, Idemitsu, Mitsubishi UFJ Financial Group, Iwatani Corporation, Tohoku Electric, Kansai Electric, Chubu Electric, Chiyoda, LNG Japan, Sumitomo Mitsui Banking Corporation, and Marubeni, in addition to a number of shipping firms. He highlighted Qatar’s commitment to its Japanese partners in ensuring a reliable and safe supply of their energy needs, particularly LNG. He also expressed hope for more future cooperation and fruitful partnerships. (Peninsula Qatar)  Sheikh Ahmed holds high-level talks in Ecuador – Coinciding with the visit of the Amir HH Sheikh Tamim bin Hamad Al Thani to Ecuador, HE Sheikh Ahmed bin Jassim Al Thani, Minister of Economy and Commerce, met with Ecuador’s Minister of Economy and Finance Richard Martinez Alvarado and Pablo Campana Sáenz, Minister of Foreign Trade and Investment. The meeting was attended by Mohammed Ali Al Malki, Ambassador of Qatar to Ecuador, Sheikh Faisal bin Thani Al Thani, Director of the Investment Department at Qatar Investment Authority, and Essa bin Mohammed Al Mannai, Director of US Affairs Department at the Ministry of Foreign Affairs. Discussions touched on issues of common interest to Qatar and Ecuador, as well as efforts to enhance trade and economic relations. Attendees also discussed investment
  4. 4. Page 4 of 8 opportunities in both countries, mainly hydropower projects and investments in the energy, tourism and services sectors. At the meeting, the two parties also discussed a number of draft agreements that bolster investment relations, including an agreement on the protection and encouragement of mutual investments, which officials agreed to sign at the earliest possible opportunity. The meeting also focused on arrangements for a meeting of the Qatari-Ecuadorian ministerial committee for economic, trade and technical cooperation. (Peninsula Qatar)  Amir’s Peru visit to open new horizons in relations – Amir HH Sheikh Tamim bin Hamad Al Thani's visit to the Republic of Peru is expected to be a milestone in the history of the relations between the two countries. The visit will push the relations forward towards broader horizons of strategic partnership and cooperation in various fields. The talks between HH the Amir and President Martin Alberto Vizcarra of the Republic of Peru are expected to discuss ways of enhancing relations and bilateral cooperation as well as exchanging views on various regional and international issues of common concern. The visit reflects HH the Amir’s keenness to open new horizons for the Qatari economy to serve Qatar’s economic plans and ambitious goals in line with Qatar National Vision 2030, in addition to build strong ties with the various countries and peoples of the world. (Peninsula Qatar)  Visa-free entry for Qataris visiting Argentina – Qataris can soon visit Argentina visa-free with the signing of an agreement during HH the Amir Sheikh Tamim bin Hamad Al-Thani’s visit to the Latin American country, it was announced. “We are preparing many Memorandums of Understanding (MoU), agreements in various fields and one specific agreement on visa waiver for all Qataris,” Argentine Ambassador, Carlos Hernandez said. (Gulf-Times.com)  Pak-Qatar Takaful Group signs agreement with Qatar Airways – Pak-Qatar Takaful Group has recently signed a corporate agreement with Qatar Airways that will allow customers and employees of the Group to avail exclusive discounts. The corporate agreement with Qatar Airways will also offer customers of Pak-Qatar Takaful Group a smoother, more convenient travel experience. (Zawya) International  Fed's Powell says US outlook 'remarkably positive' – US Federal Reserve’s Chairman, Jerome Powell hailed a “remarkably positive outlook” for the US economy that he feels is on the verge of a “historically rare” era of ultra-low unemployment and tame prices for the foreseeable future. It is a view, he said, based on how a changed economy is operating today, with businesses and households immunized by strong central bank policy from the inflationary psychology that caused unemployment, inflation and interest rates to swing wildly in the 1960s and 1970s. It is an outlook that includes an economic performance “unique in modern US data,” with unemployment of below 4% expected for at least two more years and inflation remaining modest even as wages rise. And it is an outlook he feels will even survive the Trump administration’s efforts to rewrite the global trading system, a policy shift Powell said may lead to one-time price hikes, but not to persistent changes in the annual rate of inflation going forward. (Reuters)  Eurozone’s producer prices pushed up by energy in August – Eurozone’s producer prices rose more-than-expected in August, driven higher by more costly energy, according to data released on October 2. EU statistics agency Eurostat stated prices at factory gates in the 19 countries sharing the Euro rose 0.3% MoM in August against market expectations of 0.2% rise in a Reuters poll of economists. On YoY basis, producer prices rose by 4.2% in August, against market expectations of 3.9% gain. Figures for July were also revised up to 0.7% MoM and 18- month high of 4.3% YoY. Energy prices rose 0.9% during August and were 12.0% higher than a year earlier. Without volatile energy, producer prices were unchanged MoM and up 1.5% YoY, confirming the view of European Central Bank (ECB) that spiking energy prices are the main reason for higher inflation. (Reuters)  Germany agrees on immigration law to tackle labor shortages – Germany’s coalition parties agreed on a new immigration law on October 2 to attract more skilled workers from countries outside the European Union (EU), in a politically risky push to fill a record number of job vacancies and stabilize the public pension system. Record-high employment and falling joblessness have led to a tightening labor market in Europe’s largest economy, with employers struggling to staff more than a million positions and work-related bottlenecks limiting overall economic growth. As Germany’s workforce is expected to shrink over the next decades due to an ageing population and low birth rates, more migrants are seen as crucial to help firms find workers whose pension contributions support the growing number of retirees. (Reuters)  Japan’s September services PMI slumps to 2-year low after natural disasters – Japan’s services sector grew at its slowest pace in two years in September due to heavy rains, flooding, and earthquakes, a private survey showed. The Markit/Nikkei Japan Services Purchasing Managers Index (PMI) fell to 50.2 on a seasonally adjusted basis from 51.5 in August. The index just barely held above the 50 threshold that separates expansion from contraction, the 24th consecutive month of growth, albeit the weakest rate in this period. In September, new business slowed, and some panelist mentioned that their companies were affected by an earthquake on September 6, that caused a power outage in the northern island of Hokkaido. The composite PMI, which includes both manufacturing and services, also fell to a two-year low of 50.7 from 52.0 in August. Businesses in Hokkaido have already resumed operations, meaning the slowdown in services activity is likely to be temporary. (Reuters) Regional  OPEC and traders in standoff over oil outlook – OPEC and oil traders are now in fundamental disagreement about the market outlook and the standoff is fuelling a sharp rise in prices that could spell trouble for the global economy over the next 18 months. The overall balance between supply and demand is healthy, according to a statement from the Joint Ministerial Monitoring Committee of OPEC and non-OPEC producers last month. The committee expressed its satisfaction regarding the current oil market outlook, according to a press statement. However, where the committee sees a balanced market and warned about downside risks to demand in 2019, traders see a
  5. 5. Page 5 of 8 market that is increasingly tight and are worried about the adequacy of future supply. Moreover, Russian President, Vladimir Putin and Saudi Arabian Energy Minister, Khalid Al- Falih may talk this week on the sidelines of an energy forum in Moscow, a Kremlin spokesman said. (Reuters)  Islamic finance on the advance in Europe – Latest developments showed that Europe is increasingly embracing Islamic finance to an extent that the industry is gradually becoming more influential within the continent’s banking sector. Gulf Times reported last week about the growing potential Islamic finance is gaining on the Balkans, namely in Bosnia and Herzegovina. Shari’ah compliant assets in the UK are estimated at around $700mn, and the London Stock Exchange is currently listing close to 70 Sukuk. Ireland is growing in popularity for Islamic finance players, partly because of uncertainty about the future of London as a banking hub after Brexit. (Gulf-Times.com)  HSBC: Financial return seen as top driver in ESG decision- making in the GCC – Financial return is the top driver in environment, social and governance (ESG) decision-making by investors and corporate issuers from the GCC, according to new research from HSBC, suggesting that ESG activity is taking root as a key part of business growth in the region. HSBC’s General Manager and CEO, Georges Elhedery said, “Our research tells us that many investors and corporate issuers from the GCC have an ESG strategy in place. Critically, financial returns drive ESG decision-making among GCC institutions, ahead of factors such as company policy and stakeholder pressure, which suggests that ESG is taking root as an important driver of business growth in the region.” (Gulf-Times.com)  BoE to create liquidity facility for Islamic finance – The Bank of England (BoE) plans shortly to open a liquidity facility to support the UK’s Islamic finance sector, according to BoE’s Deputy Governor, Dave Ramsden. A new BoE subsidiary will be established to house the Shari’ah Compliant Facility, Ramsden said. This will offer a non-interest-based source of liquidity to comply with Islamic law, the first such facility offered by a major western central bank. Ramsden said, “We have been progressing work to enable Islamic banks to hold Bank of England reserves to meet their regulatory requirements for holdings of high quality liquid assets in a way consistent with Islamic commercial jurisprudence.” (Gulf-Times.com)  Saudi Arabia sells SR4.78bn of domestic Sukuk – Saudi Arabia’s government sold SR4.78bn of local currency Islamic bonds in its monthly auction, the finance ministry stated. The issue was a tap of a previous Sukuk issue, bringing that issue’s total size to SR12.245bn: SR7.092bn of 5-year, SR3.005bn of 7-year and SR2.148bn of 10-year papers. Separately, state-controlled Saudi Electricity Co had plans for $2bn in Sukuk sale, according to documents seen by Reuters last month. (Gulf-Times.com)  SABIC issues $2bn dual tranche bond – Saudi Basic Industries Corp (SABIC) raised $2bn through a dual tranche US dollar bond issue, a bank document seen by Reuters showed. The amount is equally split between two tranches of five and ten year notes. SABIC, rated ‘A1’ by Moody’s and ‘A-’ by S&P has issued the 144A/Regulation S bonds through SABIC Capital II B.V, a special purpose vehicle. The five-year notes offer a 4% coupon, while the 10-year notes offer 4.5%. The deal received orders in excess of $9bn. Proceeds from the debt sale will be used to repay outstanding debt to third parties. BNP Paribas, Citi, HSBC, MUFG and Standard Chartered Bank have arranged the deal. (Reuters)  Saudi Arabia-Kuwaiti talks on shared oil said to stall over Chevron Corporation – Talks between Saudi Arabia and Kuwait to restart two oil fields in a neutral zone between the countries have stalled again, this time over the role of Chevron Corporation, according to sources. Energy Ministers from both nations met in Kuwait, seeking a resolution over Khafji and Wafra, which were halted in 2014 and 2015, respectively. Among the unresolved issues is Kuwait’s insistence that Chevron Corporation no longer operate at Wafra. Chevron Corporation, through its subsidiary Saudi Arabian Chevron Inc., is still committed to the neutral zone and is ensuring that production can resume once a decision is taken. (Bloomberg)  Softbank says it is working with Saudi Arabia’s PIF on solar power project – Japan’s SoftBank stated on October 2 that it is working closely with Saudi Arabia’s sovereign wealth fund on a solar power generation project, dismissing a Wall Street Journal report that it had shelved the $200bn project with the Public Investment Fund (PIF). SoftBank’s spokesman said, “Progress continues to be in line with expectations for a project of this scale and complexity”. (Reuters)  Jadwa REIT Saudi Fund obtains SR1bn loan from Banque Saudi Fransi – Saudi Arabia-based Jadwa Investment stated that Jadwa REIT Saudi Fund secured a SR1bn Shari’ah-compliant loan from Banque Saudi Fransi. The facility will be used to finance the fund’s new acquisitions of income-generating properties in line with the fund's investment strategy; which shall reflect positively on the fund's net income and cash dividends due to the difference between the income generated from acquired properties and the financing cost. (Tadawul)  SRECO, AIC agree to establish Alinma Alakaria RE Fund – Al Akaria Saudi Real Estate Company (SRECO), one of the largest publicly listed real estate developers on Tadawul, and Alinma Investment Company (AIC) have signed a Fund Establishment Agreement for the Alinma Alakaria RE Fund. The objective of the fund will be to develop three sites, located in Riyadh, and transform them into mixed-use developments, with a combined debt and equity structure valued at approximately SR1.5bn. Under the terms of this agreement, AIC will manage the fund in accordance with the requirements of the Capital Market Authority and will be responsible for arranging part of the development fund of the three sites. (GulfBase.com)  Saudi Aramco to unlock non-metallic materials growth potential – Saudi Aramco will pursue the non-metallic growth opportunities by unlocking its broad range of potential, aligned with its growth strategy covering the oil and gas sector as well as automotive, building and construction, packaging, and renewable sectors, according to Saudi Aramco’s Vice President of Engineering Services, Abdullah Al-Baiz. This comes in line with Saudi Vision 2030 to advance the Kingdom’s economy ranking to be among the top 15, one of Saudi Aramco’s focus areas in its long term strategy being the use of nonmetallic materials. Abdullah also highlighted the various potentials of non-metallic materials in the automotive sector, building and
  6. 6. Page 6 of 8 construction sector, packaging sector, and renewables. (GulfBase.com)  Saudi Arabia calls for more Arab cooperation in oil industry – Arab oil producing countries should cooperate to continue playing a positive role in the stability of the oil market and industry, Saudi Arabia’s Energy Minister, Khalid Al-Falih said. Al-Falih also said that Arab countries would benefit from cooperating on research and technology to develop the sector. The Minister also spoke about the Kingdom’s role in keeping a positive balance between producers and consumers in the international energy markets. He said the Kingdom was ready to relinquish its crude storage whenever a shortage comes up. (GulfBase.com)  Citigroup plans to grow offshore booking center in the UAE – Citigroup plans to boost the UAE’s role as an offshore booking center and is working towards a full banking license in Saudi Arabia, helping to propel its regional growth. Growth in the Middle East and Africa region is expected to be above the market average of around 4% in 2018 and 2019, driven by both countries, according to Atiq Rehman, Citigroup’s CEO of Middle East and Africa. Rehman said, “We are focused on what we can do within the UAE and very focused on what we can do from the UAE. We want to grow our business here and make it into a regional offshore booking center for a lot of our loans.” (Reuters)  Federal budget invests in UAE's most cherished assets – The UAE Federal Budget over the coming three years carries forward a profound message that reaffirms the government's unswerving determination to forge ahead with its ambitious developmental and investment strategy with the ultimate goal of ensuring the well-being of the human capital, being the core and crux of the comprehensive developmental drive. The largest across the country's history, the Federal Budget lays a central focus on augmenting FDI over the coming period while continuing to spend on all aspects related to sustainable development platforms. A total of AED180bn in spending packages has been allocated for the coming three years, AED60.3bn of which for 2019, a growth of 17.3% over 2018 - a move which adds to local and foreign departments belief that the sustainable development index of the country is on a consistent rise, as well as contributes to further advancing the country's rankings across global development indicators. (GulfBase.com)  Dana Gas’ 2018 Kurdistan dividend reaches AED439mn – Dana Gas, the Middle East’s largest regional private sector natural gas company, received a further AED218mn dividend payment from its joint venture operations in the Kurdistan Region of Iraq (KRI). This payment takes the total dividends received from those operations to AED439mn so far in 2018, with all payments received on time and no outstanding receivables, as reported by the company. The payment has been distributed as a dividend by Pearl Petroleum, the consortium jointly owned by Dana Gas (35%), Crescent Petroleum (35%) as well as OMV, MOL and RWE (10% each). In addition, a dividend distribution of $20mn was made to the Pearl Petroleum partners from payment for liquids (condensate and LPG) produced and sold in the KRI. In total, therefore, Dana Gas received AED218mn as a dividend from Pearl Petroleum, reflecting its equity share in the consortium. (GulfBase.com)  Dubai bank said to weigh paying Sberbank less for Turkish lender – Dubai-based Emirates NBD is considering whether to renegotiate its offer for Sberbank PJSC’s (Sberbank) wholly- owned Turkish unit after the Lira lost almost 30% of its value since the deal was signed, according to sources. Dubai’s biggest lender wants to complete its acquisition of Denizbank AS but is concerned that the price set in May is too high following the slump in the Lira. Emirates NBD struck a deal to buy Denizbank AS for TRY14.6bn, which was worth more than $3bn on May 22. A renegotiation is one option being considered, but nothing has been decided, sources said. (Bloomberg)  Bangladesh to hold talks with Emirates National Oil for LPG terminal – Bangladesh will hold talks with Dubai-based Emirates National Oil Company (ENOC) to set up a liquefied petroleum gas (LPG) terminal in the country, according to a Director of state-owned Bangladesh Petroleum Corporation, Sayed Mohammad Mozammel Haque. “ENOC has sent us a proposal for a joint venture project to build an LPG terminal. We have invited them for detailed discussions in our office in Dhaka. They are supposed to come on October 11,” he told Reuters, adding the capacity for the terminal and all other details will be discussed during the meeting. (Reuters)  DAMAC Properties calls bottom for weakened Dubai’s real estate – Dubai’s real estate market faces another few quarters of soft market conditions before starting to rebound from late 2019, DAMAC Properties’ CEO, Adil Taqi said. Residential prices in Dubai have fallen more than 15% since 2014 and this year DAMAC Properties registered its worst quarter of booked sales since going public five years ago. Taqi said, “There is a mood of positivity that we are closer to the end of the weak cycle. Fundamentally prices cannot go down much further.” Rising oil prices, which have risen to four-year highs in 2018, and an increase in government spending could have a positive impact on the property market next year, Taqi added. (Reuters)  Abu Dhabi's 2017 GDP soars to AED832.5bn at current prices – The economy of Abu Dhabi continued to perform well in 2017, with its GDP estimates at current prices surging to AED832.5bn compared to AED760.4bn the previous year, as reported by state news agency Wam, citing the Statistical Yearbook of Abu Dhabi 2018 released by the Statistics Centre - Abu Dhabi (SCAD). “The GDP per capita at current prices amounted to AED287.7bn, while total fixed capital formation was put at AED182.3bn and the compensation of employees at AED233.6bn,” showed the annual publication, which closely monitors the whole spectrum of indicators that gauge the comprehensive development taking place across the Emirate. The figures indicated that GDP at constant prices was AED785.6bn in 2017 compared to AED789.7bn the year before. The GDP per capita at constant prices stood at AED271.5bn compared to AED271.6bn in 2016. (GulfBase.com)  CBK issues KD150mn bonds, Tawarruq – The Central Bank of Kuwait (CBK) announced on October 1 the most recent issues of CBK bonds and related Tawarruq at a total value of KD150mn for six months with rate of return at 2.875%. The CBK, on September 24, issued bonds worth KD200mn with a rate of return at 2.5% for a period of three months. (GulfBase.com)
  7. 7. Page 7 of 8  Kuwait stocks shine in the third quarter as market reforms pay off – Inclusion in an emerging market benchmark and surging oil prices have helped Kuwaiti stocks outshine their regional peers in the past three months, but some major active emerging-market investors are waiting on the sidelines for more reforms. Kuwait’s main index is up nearly 9% in the third quarter, beating other Gulf markets, including oil producers Saudi Arabia and Abu Dhabi, and edging past Qatar, the MSCI emerging market index and Russia. More good news could be in store. Next year, US index provider MSCI will decide whether to reclassify its Kuwait index from the current frontier-market status to its widely used emerging-market benchmark. Analysts estimate such a move could trigger passive fund flows of $2bn. (Reuters)  Oman sells OMR6.5mn 28-day bills at a yield of 2.139% – Oman sold OMR6.5mn of bills due October 31 on October 1. The bills were sold at a price of 99.836, have a yield of 2.139% and will settle on October 3. (Bloomberg)  Bahrain’s credit risk falls to five month low on relief over aid – Bahrain’s credit risk declined to the lowest level in five months on optimism the nation’s neighbors will soon come to the island-state’s rescue with an aid package. The cost of insuring Bahrain’s debt against default fell 34 basis points in the last week on relief that Saudi Arabia, the UAE and Kuwait are stated to be considering $10bn plan. The contracts closed at 307 basis points on September 28, the lowest since May and about half the level in June, when concern over the country’s finances spurred a sell-off of Bahraini assets. (GulfBase.com)  GFH Financial Group to acquire about $200mn Sukuk from Al Rajhi Bank – GFH Financial Group signed pact to acquire about $200mn of Sukuk certificates from Al Rajhi Bank. The Sukuk were issued in 2008 to finance company’s Villamar project in Bahrain. The acquisition is expected to reflect positively on GFH Financial Group’s financials during 2H2018 due to the agreed discount for the transaction. (Bloomberg)
  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; # Market closed on October 2, 2018) 50.0 75.0 100.0 125.0 Aug-14 Aug-15 Aug-16 Aug-17 Aug-18 QSE Index S&P Pan Arab S&P GCC (0.7%) 0.3% (0.1%) (0.4%) (0.1%) 0.3% (0.4%) (1.0%) (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 1,203.34 1.2 0.9 (7.7) MSCI World Index 2,183.62 (0.2) (0.0) 3.8 Silver/Ounce 14.69 1.4 (0.0) (13.3) DJ Industrial 26,773.94 0.5 1.2 8.3 Crude Oil (Brent)/Barrel (FM Future) 84.80 (0.2) 2.5 26.8 S&P 500 2,923.43 (0.0) 0.3 9.3 Crude Oil (WTI)/Barrel (FM Future) 75.23 (0.1) 2.7 24.5 NASDAQ 100 7,999.55 (0.5) (0.6) 15.9 Natural Gas (Henry Hub)/MMBtu 3.15 0.3 3.6 1.9 STOXX 600 381.94 (0.7) (0.9) (5.7) LPG Propane (Arab Gulf)/Ton 107.50 (2.1) (0.6) 8.6 DAX 12,287.58 (0.6) (0.2) (8.6) LPG Butane (Arab Gulf)/Ton 128.50 (0.2) 3.4 18.4 FTSE 100 7,474.55 (0.7) (0.9) (6.7) Euro 1.15 (0.3) (0.5) (3.8) CAC 40 5,467.89 (0.9) (1.0) (1.1) Yen 113.65 (0.2) (0.0) 0.9 Nikkei 24,270.62 0.3 0.4 5.5 GBP 1.30 (0.5) (0.4) (4.0) MSCI EM 1,033.30 (1.3) (1.4) (10.8) CHF 1.02 (0.0) (0.2) (1.0) SHANGHAI SE Composite# 2,821.35 0.0 0.0 (19.2) AUD 0.72 (0.5) (0.5) (8.0) HANG SENG 27,126.38 (2.5) (2.5) (9.6) USD Index 95.51 0.2 0.4 3.7 BSE SENSEX# 36,526.14 0.0 (0.1) (6.5) RUB 65.48 0.8 (0.1) 13.6 Bovespa 81,612.28 6.3 5.5 (9.9) BRL 0.25 2.0 2.8 (16.0) RTS 1,181.61 (0.8) (0.9) 2.4 76.3 74.2 71.7

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