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QNBFS Daily Market Report October 9, 2018

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The QSE Index declined 0.3% to close at 9,819.7

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QNBFS Daily Market Report October 9, 2018

  1. 1. Page 1 of 8 QSE Intra-Day Movement Qatar Commentary The QSE Index declined 0.3% to close at 9,819.7. Losses were led by the Banks & Financial Services and Insurance indices, falling 0.8% and 0.5%, respectively. Top losers were Salam International Investment Limited and Qatari Investors Group, falling 1.6% each. Among the top gainers, Gulf International Services gained 6.1%, while Qatar Islamic Insurance Company was up 2.9%. GCC Commentary Saudi Arabia: The TASI Index rose 0.6% to close at 7,939.2. Gains were led by the Retailing and Banks indices, rising 1.7% and 1.3%, respectively. Dar Al Arkan Real Estate Development Co. rose 3.8%, while Nama Chemicals Co. was up 3.4%. Dubai: The DFM General Index declined 0.6% to close at 2,774.6. The Invest. & Fin. Services index fell 2.2%, while the Consumer Staples and Dis. index declined 1.2%. Al Ramz Corporation Inv. fell 6.1%, while Dubai Investments was down 2.7%. Abu Dhabi: The ADX General Index rose 0.3% to close at 5,003.4. The Consumer Staples index gained 7.3%, while the Banks index rose 0.5%. Emirates FoodStuff & Mineral Water Co. gained 11.5%, while Ras Al-Khaimah Cement Co. was up 6.2%. Kuwait: The Kuwait Main Market Index declined 0.2% to close at 4,729.3. The Insurance index fell 0.9%, while the Industrials index declined 0.6%. Wethaq Takaful Insurance Company fell 10.0%, while Warba Insurance Co. was down 8.5%. Oman: The MSM 30 Index fell 0.2% to close at 4,505.4. Losses were led by the Financial and Industrial indices, falling 0.5% and 0.3%, respectively. Ominvest fell 3.2%, while Oman Fisheries was down 2.3%. Bahrain: The BHB Index gained 0.1% to close at 1,325.3. The Commercial Banks index rose 0.4%, while the other indices ended flat or in red. Ahli United Bank rose 0.8%. QSE Top Gainers Close* 1D% Vol. ‘000 YTD% Gulf International Services 21.00 6.1 676.8 18.6 Qatar Islamic Insurance Company 52.00 2.9 10.9 (5.4) Qatar Fuel Company 167.03 1.2 98.5 63.7 Qatari German Co for Med. Devices 4.93 1.2 7.4 (23.7) Mesaieed Petrochemical Holding 17.10 1.2 373.3 35.8 QSE Top Volume Trades Close* 1D% Vol. ‘000 YTD% Gulf International Services 21.00 6.1 676.8 18.6 Qatar First Bank 4.80 (0.4) 562.0 (26.5) Vodafone Qatar 8.69 0.2 383.5 8.4 Mesaieed Petrochemical Holding 17.10 1.2 373.3 35.8 Doha Bank 21.55 (1.5) 360.5 (24.4) Market Indicators 08 Oct 18 07 Oct 18 %Chg. Value Traded (QR mn) 131.6 67.9 93.7 Exch. Market Cap. (QR mn) 548,534.4 550,661.8 (0.4) Volume (mn) 4.2 2.0 111.2 Number of Transactions 2,442 1,383 76.6 Companies Traded 41 40 2.5 Market Breadth 19:20 5:28 – Market Indices Close 1D% WTD% YTD% TTM P/E Total Return 17,301.29 (0.3) (0.8) 21.0 15.2 All Share Index 2,893.75 (0.3) (0.9) 18.0 15.0 Banks 3,505.89 (0.8) (1.5) 30.7 13.5 Industrials 3,243.77 (0.0) (0.3) 23.8 16.0 Transportation 2,084.73 (0.2) (0.4) 17.9 12.3 Real Estate 1,821.90 0.1 (0.5) (4.9) 15.0 Insurance 3,122.88 (0.5) (0.6) (10.3) 28.0 Telecoms 956.26 0.2 (0.8) (13.0) 36.5 Consumer 6,872.23 0.7 0.3 38.5 13.9 Al Rayan Islamic Index 3,790.23 (0.2) (0.6) 10.8 15.0 GCC Top Gainers ## Exchange Close # 1D% Vol. ‘000 YTD% Dar Al Arkan Real Estate Saudi Arabia 10.02 3.8 18,363.1 (30.4) Riyad Bank Saudi Arabia 16.96 2.4 1,440.0 35.7 Qurain Petrochem. Ind. Kuwait 0.37 2.2 1,050.2 12.2 Jarir Marketing Co. Saudi Arabia 188.00 2.2 160.2 28.1 Alawwal Bank Saudi Arabia 14.64 1.9 398.6 23.6 GCC Top Losers ## Exchange Close # 1D% Vol. ‘000 YTD% Ominvest Oman 0.36 (3.2) 561.3 (14.1) Almarai Co. Saudi Arabia 45.45 (2.9) 743.9 (15.4) Dubai Investments Dubai 1.79 (2.7) 2,575.2 (25.7) Saudi Int. Petrochemical Saudi Arabia 21.28 (2.4) 775.3 21.9 Etihad Etisalat Co. Saudi Arabia 17.70 (2.3) 2,092.0 19.4 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% Salam International Inv. Ltd. 4.90 (1.6) 13.5 (28.9) Qatari Investors Group 29.83 (1.6) 41.0 (18.5) Doha Bank 21.55 (1.5) 360.5 (24.4) The Commercial Bank 39.00 (1.4) 19.9 34.9 Gulf Warehousing Company 40.20 (1.2) 1.6 (8.6) QSE Top Value Trades Close* 1D% Val. ‘000 YTD% Qatar Fuel Company 167.03 1.2 16,410.9 63.7 Industries Qatar 128.43 (0.3) 15,511.1 32.4 Gulf International Services 21.00 6.1 14,024.3 18.6 QNB Group 177.00 (1.1) 13,900.9 40.5 Doha Bank 21.55 (1.5) 7,799.5 (24.4) Source: Bloomberg (* in QR) Regional Indices Close 1D% WTD% MTD% YTD% Exch. Val. Traded ($ mn) Exchange Mkt. Cap. ($ mn) P/E** P/B** Dividend Yield Qatar* 9,819.74 (0.3) (0.8) 0.1 15.2 35.99 150,682.4 15.2 1.5 4.5 Dubai 2,774.62 (0.6) (0.6) (2.1) (17.7) 45.20 99,237.9 7.4 1.0 6.1 Abu Dhabi 5,003.38 0.3 (0.1) 1.4 13.8 34.12 134,951.4 13.2 1.5 4.8 Saudi Arabia 7,939.17 0.6 (0.7) (0.8) 9.9 755.60 501,465.5 16.8 1.8 3.5 Kuwait 4,729.31 (0.2) (0.3) (0.1) (2.0) 34.04 32,359.9 14.6 0.9 4.4 Oman 4,505.35 (0.2) (0.5) (0.8) (11.6) 3.52 19,397.8 11.1 0.8 6.1 Bahrain 1,325.26 0.1 0.0 (1.0) (0.5) 6.64 20,439.5 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 9,880 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 declined 0.3% to close at 9,819.7. The Banks & Financial Services and Insurance indices led the losses. The index fell on the back of selling pressure from GCC and non-Qatari shareholders despite buying support from Qatari shareholders.  Salam International Investment Limited and Qatari Investors Group were the top losers, falling 1.6% each. Among the top gainers, Gulf International Services gained 6.1%, while Qatar Islamic Insurance Company was up 2.9%.  Volume of shares traded on Monday rose by 111.2% to 4.2mn from 2.0mn on Sunday. However, as compared to the 30-day moving average of 6.1mn, volume for the day was 30.2% lower. Gulf International Services and Qatar First Bank were the most active stocks, contributing 16.0% 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 United Electronics Company Saudi Arabia SR 895.0 15.0% 34.1 21.4% 30.9 18.4% Oman Cable Industry* Oman OMR 185.3 3.4% – – 5.5 -21.7% Al Batinah Hotels* Oman OMR 0.8 22.2% – – -0.3 N/A Celebrity National Financial Services*# Oman OMR 98.4 23.1% – – -195.3 N/A Source: Company data, DFM, ADX, MSM, TASI, BHB. (*Financials for 9M2018, # Values in ‘000) Global Economic Data Date Market Source Indicator Period Actual Consensus Previous 10/08 EU Sentix Behavioral Indices Sentix Investor Confidence October 11.4 11.6 12.0 10/08 Germany Deutsche Bundesbank Industrial Production SA MoM August -0.3% 0.3% -1.1% 10/08 Germany Bundesministerium fur Wirtschaft Industrial Production WDA YoY August -0.1% -0.1% 1.5% 10/08 China Markit Caixin China PMI Composite September 52.1 – 52.0 10/08 China Markit Caixin China PMI Services September 53.1 51.4 51.5 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 1 Due MARK Masraf Al Rayan 15-Oct-18 6 Due DBIS Dlala Brokerage & Investment Holding Company 15-Oct-18 6 Due MCGS Medicare Group 16-Oct-18 7 Due QNCD Qatar National Cement Company 17-Oct-18 8 Due QEWS Qatar Electricity & Water Company 17-Oct-18 8 Due QIBK Qatar Islamic Bank 17-Oct-18 8 Due DHBK Doha Bank 17-Oct-18 8 Due UDCD United Development Company 17-Oct-18 8 Due NLCS Alijarah Holding 18-Oct-18 9 Due QISI The Group Islamic Insurance Company 21-Oct-18 12 Due ABQK Ahli Bank 21-Oct-18 12 Due QIGD Qatari Investors Group 21-Oct-18 12 Due GWCS Gulf Warehousing Company 22-Oct-18 13 Due IHGS Islamic Holding Group 22-Oct-18 13 Due VFQS Vodafone Qatar 22-Oct-18 13 Due QATI Qatar Insurance Company 23-Oct-18 14 Due KCBK Al Khalij Commercial Bank 23-Oct-18 14 Due CBQK The Commercial Bank 23-Oct-18 14 Due Overall Activity Buy %* Sell %* Net (QR) Qatari Individuals 39.08% 31.58% 9,879,671.68 Qatari Institutions 17.69% 18.38% (910,897.01) Qatari 56.77% 49.96% 8,968,774.67 GCC Individuals 0.83% 0.35% 630,701.20 GCC Institutions 4.75% 7.94% (4,194,596.11) GCC 5.58% 8.29% (3,563,894.91) Non-Qatari Individuals 12.90% 11.68% 1,602,791.49 Non-Qatari Institutions 24.75% 30.08% (7,007,671.25) Non-Qatari 37.65% 41.76% (5,404,879.76)
  3. 3. Page 3 of 8 QFLS Qatar Fuel Company 25-Oct-18 16 Due QIMD Qatar Industrial Manufacturing Company 25-Oct-18 16 Due QOIS Qatar Oman Investment Company 28-Oct-18 19 Due MERS Al Meera Consumer Goods Company 28-Oct-18 19 Due QGMD Qatari German Company for Medical Devices 28-Oct-18 19 Due AKHI Al Khaleej Takaful Insurance Company 28-Oct-18 19 Due QGRI Qatar General Insurance & Reinsurance Company 29-Oct-18 20 Due DOHI Doha Insurance Group 29-Oct-18 20 Due ERES Ezdan Holding Group 29-Oct-18 20 Due Source: QSE News Qatar  QNB Group’s CEO: Moody’s outlook upgrade reflects confidence in Qatar’s banking sector – Qatar’s banking sector, which was upgraded recently to ‘Stable’ from ‘Negative’ by global credit rating agency, Moody’s, remains ‘the best’ performing in the region, QNB Group’s CEO, Ali Ahmed Al-Kuwari said. The latest outlook shows ‘confidence in the local system’, which had also witnessed a ‘12% YoY’ growth, according to Al-Kuwari, who was among the panelists in the discussion ‘Strategies and Initiatives towards National Vision 2030’ held at the International Products Exhibition and Conference 2018 (IPEC). “In terms of non-performing loans (NPLs), Qatar’s banking system is one of the best in the world- 1.8% in aggregate. The capital adequacy of the local banks is north of 16.5%, which is higher than the Basel III requirement of 12.5%, so this reflects, how strong the banking system is in Qatar,” Al-Kuwari said. Earlier, Moody’s stated the upgrade of Qatar’s banking sector outlook to ‘Stable’ from ‘Negative’ reflects the resilience of the country’s economy and banking system to the ongoing economic and diplomatic blockade. It also noted that Qatar’s banking sector profitability will remain ‘stable’ with capital buffers remaining ‘strong’. (Gulf-Times.com)  Qatar to see bigger spending in next fiscal – Minister of Finance, HE Ali Shareef Al Emadi announced that the national budget 2019 will see increase in budgetary allocations for capital expenditure and spending in several key sectors, including infrastructure and social sectors. Al Emadi, speaking at a panel discussion with other ministers and dignitaries on the opening day of the first International Products Exhibition and Conference 2018 (IPEC), noted that the moderate rise in the prices of oil & gas has further strengthened Qatar’s position, especially in terms of the international balance. Powered by more trade surplus and improved balance of payment position, the government will further expand its developmental activities and continue implementing infrastructure projects, in line with the Qatar National Vision 2030. The Minister stressed the continued focus of the budget on capital expenditure, explaining that spending in general, especially in the health, education and infrastructure projects, will see a rise, and revenues will also see a recovery in 2019. The national budget for 2018 was prepared at an assumed oil price of $45 per barrel, while prices of oil now hover around $80 per barrel. Al Emadi said that the growth in Qatar is largely driven by the performance of the private sector, where the growth rate reached more than 4%, which exceeded the official expectations, adding that it is expected to continue. (Peninsula Qatar)  MoJ, RICS sign deal to regulate real estate market – The Ministry of Justice (MoJ) and Royal Institution of Chartered Surveyors (RICS) signed a significant Memorandum of Understanding (MoU) to improve market transparency and investor confidence by regulating the real estate market in accordance with international standards. As part of the partnership, competency-based training will be provided to the public to support the professional development of the sector. The signing of this agreement supports the efforts of the MoJ to organize and develop the real estate market in Qatar and to benefit from the advanced professional, technical and ethical standards promoted by RICS. (Peninsula Qatar)  PM: Qatar has entered new phase of sustainable development – Prime Minister and Interior Minister HE Sheikh Abdullah bin Nasser bin Khalifa Al Thani said that Qatar has entered a new phase in its journey of sustainable development. The Prime Minister was speaking after inaugurating the International Products Exhibition and Conference 2018 (IPEC) at Doha Exhibition and Convention Center. “Qatar received high rankings in the global economic and development indicators in the past few years, and today it commences a new chapter to achieve sustainable development on economic, social, environmental and other levels, through executing many development projects and programs across various sectors, and it also witnesses a significant phase of implementing major development projects, in addition to the 2022 FIFA World Cup related projects,” the Prime Minister said. (Peninsula Qatar)  GWCS postpones disclosure of the 3Q2018 financial statements to October 22 – Gulf Warehousing Company (GWCS) announced that the company will postpone its board meeting from October 21, 2018 to October 22, 2018 to discuss financials of the company for 3Q2018 for the period ended September 30, 2018. (QSE)  QOIS to disclose 3Q2018 financial statements on October 28 – Qatar Oman Investment Company (QOIS) announced its intent to disclose 3Q2018 financial statements for the period ended September 30, 2018, on October 28, 2018. (QSE)  QGRI to disclose 3Q2018 financial statements on October 29 – Qatar General Insurance & Reinsurance Company (QGRI) announced its intent to disclose 3Q2018 financial statements for the period ended September 30, 2018, on October 29, 2018. (Peninsula Qatar)  SIIS to disclose 3Q2018 financial statements on October 29 – Salam International Investment Limited (SIIS) announced its intent to disclose 3Q2018 financial statements for the period ended September 30, 2018, on October 29, 2018. (QSE)
  4. 4. Page 4 of 8  QCFS to disclose 3Q2018 financial statements on October 25 – Qatar Cinema & Film Distribution Company (QCFS) announced its intent to disclose 3Q2018 financial statements for the period ended September 30, 2018, on October 25, 2018. (QSE)  Qatar sets aside $2bn to attract MNCs – Qatar has allocated $2bn to attract multi-national companies (MNCs) to its financial center. Companies that set up a hub in Doha will be provided free offices and tax incentives, as well as seed capital to cover five years of operating expenses in return for a commitment of at least a decade, Qatar Financial Centre Authority’s CEO, Yousuf Al Jaida said. Qatar’s financial hub is targeting to launch the incentive plan in the first quarter once all the governance structures have been put in place. (Peninsula Qatar)  Milaha achieves five-star grading in the British Safety Council’s occupational health and safety audit – Qatar Navigation (Milaha) has successfully completed a best practice ‘Five Star Occupational Health and Safety Audit’ conducted by the British Safety Council, making it one of the very few companies in Qatar to hold the coveted five-star grading. The achievement demonstrates Milaha’s commitment towards the continuous improvement of its health and safety management systems and associated arrangements. (QSE)  QFC plans to build ‘mutual recognition frameworks’ in Islamic finance with other bourses worldwide – Underscoring the significant role of government-to-government (G2G) relations, the Qatar Financial Centre (QFC) plans to build ‘mutual recognition frameworks’ with other bourses worldwide in the area of Islamic finance, QFC’s CEO, Yousuf Mohamed Al-Jaida said. Speaking at a panel discussion at the International Products Exhibition and Conference 2018 (IPEC) titled ‘Strategies and Initiatives towards National Vision 2030’, Al- Jaida said that Qatar has forged “stronger” relationships with many “friendly nations,” especially after the 2017 economic blockade on Qatar. “Friendly nations have formed stronger relations with the state of Qatar, as a financial center, we think there is an opportunity on these G2G relations,” Al-Jaida pointed out during the discussion. “One area that we are currently looking at very closely is the financial centers in friendly nations, and we’re trying to form mutual recognition frameworks in the area of Islamic finance, meaning if you are a financial institution, these nations can build similar legal frameworks and mutually recognize each other, which means entry to those markets without any restrictions,” he continued. Also, Al-Jaida said the QFC has signed 21 memoranda of understanding (MoUs) with several European countries in the area of asset management. The MoUs, he noted, would provide Qatar-based asset managers “easy access” to other markets in Europe. QFC is targeting to attract more than 1,000 companies and create more than 10,000 jobs in the financial and non- financial sectors in the country by 2022. (Gulf-Times.com, Peninsula Qatar)  Qatar, Turkey trade set to reach $2bn by 2018-end – Trade exchange between Ankara and Doha is expected to reach about $2bn by the end of this year, up from around $1.5bn in the first eight months of 2018, Turkish Deputy Minister of Trade, Gonca Yilmaz Batur said. During the opening session of the International Products Exhibition and Conference 2018 (IPEC), Batur called for deepening economic relations between Qatar and Turkey and promoting them towards having stronger and more resilient prospects. She said this would positively impact the volume of trade exchange between the two countries, which had “already grown remarkably” and amounted to $1.3bn in 2017, driven by several bilateral agreements and partnerships. She pointed to a new agreement to be signed between Qatar and Turkey in December in this regard. Batur praised the strategic ties between her country and Qatar that have been developed into a fraternal relationship, praising in this regard the $15bn investment package announced by Qatar. (Gulf-Times.com)  Spain urges Qatar to play key role in final push to Doha Round of WTO – Spain has urged Qatar to shoulder more responsibility in bringing the global leaders to Doha to give a final push to Doha Round in the WTO (World Trade Organization) as part of strategies to achieve meaningful and effective multilateralism. “Qatar has a role to play, it has the responsibility and the friends of Qatar have to support the country in achieving multilateralism,” Spain’s former Foreign Minister, Miguel Angel Moratinos told the International Products and Exhibition Conference 2018 (IPEC). He said it is going to be 20 years in 2021 after the ministerial conference of WTO launched the Doha Round, which aims to achieve major reform of the international trading system through the introduction of lower trade barriers and revised trade rules. The round was officially launched at the WTO’s fourth Ministerial Conference in Doha, in November 2001. The Doha Ministerial Declaration provided the mandate for the negotiations, including on agriculture, services and an intellectual property topic, which began earlier. (Gulf-Times.com)  Qatar Airways sees 39% increase in stopover passengers – Qatar Airways has seen 39% increase in the number of stopover passengers “by promoting Qatar to the world as a tourism and stopover destination” through its subsidiaries, Qatar Airways’ CEO, Akbar Al-Baker said. “Through our commitment to excellence, we bring Qatar to the world, hoping to earn the right to bring the world to Qatar, and our strategy is working,” Al- Baker said during his special address at the International Products Exhibition and Conference 2018 (IPEC). Meanwhile, Qatar Airways Cargo undertook a massive airlift of food and other essential items, when the illegal blockade on the country was first initiated in June last year, according to Al-Baker. These undertakings, arranged entirely by Qatar Airways Cargo, lasted several weeks and used own fleet, as well as other leased aircraft. Al-Baker said, “Thanks to our excellent team, world- class facilities and modern fleet, Qatar Airways helped to ensure residents did not go without essential supplies.” Qatar Airways Cargo is the world’s second largest cargo carrier flying a young and modern fleet of 23 freighters to more than 60 dedicated cargo destinations. (Gulf-Times.com) International  IMF cuts world economic growth forecasts as import tariffs, emerging market issues bite – The International Monetary Fund (IMF) cut its global economic growth forecasts for 2018 and 2019, saying that trade policy tensions and the imposition of import tariffs were taking a toll on commerce, while emerging markets struggle with tighter financial conditions and capital
  5. 5. Page 5 of 8 outflows. The new forecasts, released on the Indonesian resort island of Bali, where the IMF and World Bank annual meetings are getting underway, showed that a burst of strong growth, fueled partly by US tax cuts and rising demand for imports, was starting to wane. IMF stated in an update to its World Economic Outlook stated it was now predicting 3.7% global growth in both 2018 and 2019, down from its July forecast of 3.9% growth for both years. (Reuters)  UK's summer spending spree cools in September – British consumers turned more cautious about their spending in September, after going on a summer spree, two surveys showed, suggesting the overall economy can no longer cope on them quite as much to soften the drag of Brexit. Shops reported total spending edged up by an annual 0.7% last month, the slowest rise since October last year apart from a slump in April, which was distorted by the timing of the Easter holiday, the British Retail Consortium stated. A broader measure of consumer spending by Barclaycard increased by the smallest amount in five months, rising by an annual 3.9%. Household consumption accounts for about 60% of Britain’s economy. The Bank of England and other forecasters have been surprised by its strength since the Brexit vote in 2016, even as pay growth has lagged behind inflation. The propensity of consumers to spend has helped to soften a slowdown in the overall economy. (Reuters)  Eurozone’s investor morale falls on Italy, car industry worries – Investor morale in the Eurozone fell more than expected in October, a survey showed, as concerns about Italy’s fiscal policies and tighter scrutiny of the car industry’s compliance with emissions rules weighed on sentiment. Sentix’s index for the Eurozone fell to 11.4 from 12 points in September. The Reuters consensus forecast was for a dip to 11.7. A sub-index measuring expectations rose slightly to -8.3 from -8.8. A sub- index on current conditions fell to 33 from 35, hitting its lowest level since April 2017. German carmakers and the government hashed out a compromise deal to cut pollution from diesel vehicles last week after environmental groups won a victory in February, which allowed cities to ban older diesel cars. The government has asked carmakers to offer owners trade-in incentives and hardware fixes. Not all carmakers committed to the retrofits, as the hardware fixes are known, which would cost billions of Euros and eat into profit margins. Investors also worry about Italy, where the government is so far defying the European Commission’s calls to bring the planned budget deficits down, in line with EU rules. (Reuters)  China’s central bank lends ¥441.50bn via medium-term facility in September – China's central bank lent ¥441.50bn to financial institutions via its medium-term lending facility (MLF) in September. Outstanding MLF was ¥5,383.00bn at the end of September compared with ¥5,118.00bn at the end of August, it said. The People's Bank of China uses the MLF and the standing lending facility as tools for managing short- and medium-term liquidity in the country’s banking system. (Reuters) Regional  Riyad Bank announces the redemption of its SR4bn Sukuk due 2020 – Riyad Bank announced that its intention to redeem its SR4bn Sukuk due 2020, in full, at their face value (100% of issue price) at the end of year five. The Sukuk were issued on November 11, 2013 for an aggregate value of SR4bn with an original maturity of seven years due on November 11, 2020 and are callable on or nearest to November 11, 2018. Regulatory approval has already been obtained in this regard. (Tadawul)  Saudi Arabia invests SR500bn in industrial, service projects to diversify economy – Saudi Arabia has invested SR500bn in industrial, service and logistics projects and contracts, which will go a long way in cutting dependence on oil, and in diversifying the national economy. The Kingdom is also witnessing a remarkable demand in industrial investment after intensified efforts by the Saudi Industrial Property Authority (MODON) and other government agencies. More than SR500bn has been invested in 6,271 industrial, service and logistics projects and contracts in the Kingdom. MODON has established 35 industrial cities with total industrial land exceeding 196mn square meters on October 8. (GulfBase.com)  No new taxes in Saudi Arabia till 2030 says the Crown Prince – Saudi Arabia will not impose any new taxes until 2030 and the unemployment rate in the Kingdom will begin to decline from 2019, Crown Prince Mohammed bin Salman bin Abdulaziz said. In an interview with Bloomberg, he said that the Kingdom is moving in the right direction, and a major deal will be announced in two weeks. (GulfBase.com)  Almarai plans to sell Sukuk by year end, CFO says – Almarai, the Saudi Arabian dairy company, expects to issue a new Sukuk before the end of 2018 as part of an ongoing debt refinancing strategy, according to Almarai’s CFO, Paul Gay. He said, “We have no plans to grow our debt facilities – on the contrary, we are working on a process to refinance our existing debt, and are considering options for a new Sukuk which we plan to issue before the end of the year.” Banks have yet to be appointed and Paul Gay declined to disclose the size of the issue. (GulfBase.com)  Exotix partners up with Saudi Arabia's NCB Capital – Exotix Capital, an investment bank specializing in developing markets, has teamed up with Saudi Arabia’s NCB Capital to provide frontier and emerging markets research and local execution services. Exotix Capital, part owned by NEX Group’s founder Michael Spencer, said the partnership with NCB Capital, which has more than $37bn of assets under management, is part of an expansion of the firm’s global research and trading capabilities. (Reuters)  UAE investment law to apply selectively, will not hurt locals – A new law allowing 100% foreign ownership of companies in the UAE will only apply to some sectors of the economy, limiting the risk that it could disrupt existing business, Dubai investment officials told Reuters. The UAE cabinet, chaired by Dubai ruler Sheikh Mohammed bin Rashid al-Maktoum, said in May that it would permit 100% foreign ownership of some UAE-based businesses, up from the current 49% limit, by the end of 2018. Few details of the law have been revealed so far. However, Raed Safadi, Chief Economic Advisor at Dubai’s Department of Economic Development, said that it would only apply to strategic sectors of the economy. This means it will not damage the interests of UAE citizens who currently benefit from acting as silent partners in foreign-invested businesses, Safadi said. In fact, the new law will create opportunities for UAE citizens because they have a lot to offer in terms of
  6. 6. Page 6 of 8 knowledge of local markets, the networks and the connectivity, he added. (Reuters)  UAE plans initial coin offerings to boost capital markets – The UAE plans to introduce initial coin offerings (ICOs) next year to provide companies with a fresh way to raise money, according to the Head of the securities regulator, Obaid Saif al-Zaabi. In ICOs, companies issue cryptocurrency tokens to investors, in much the same way as they issue shares in an initial public offer of equity. “The board of the Emirates Securities & Commodities Authority has approved considering ICOs as securities. As per our plan we should have regulations on the ground in the first half of 2019,” al-Zaabi said. (Reuters)  UAE increases overall annual spend by 15.6% – The UAE adopted a general expansionary fiscal policy during the first quarter of 2018 and increased its overall annual spending by 15.6% due to the recovery in oil prices, which led to increased proceeds from petroleum based products. The recovery was also driven by a 21.7% increase in annual salaries and wages, as well as 15.9% rise in subsidies and transfers to government companies. Grants also increased by 15.6%, while social benefits increased 7.5%. As part of country’s spending policy, the purchase of goods and services recorded the highest annual increase, jumping by 157%, compared to only a slight increase during the same period last year. (GulfBase.com)  Abraaj's stake in $1bn healthcare fund to be split among other investors – AlixPartners, the interim manager of Abraaj’s $1bn healthcare fund, has decided to redistribute the troubled private equity firm’s stake in the fund to its other investors, according to sources. The move reflects a desire by some of the fund’s other investors to sever ties with Dubai based Abraaj ahead of TPG taking over the management of the fund. However, it has prompted local banks whose loans to Abraaj were secured against the stake in the fund to consider legal action against AlixPartners, as the decision leaves them facing the prospect of no returns. TPG is in exclusive talks to add Abraaj’s healthcare fund to its Rise Fund, according to a letter sent by AlixPartners to employees of the fund. (Reuters)  Baker Hughes acquires 5% of ADNOC Drilling for $550mn – Baker Hughes, the world’s second-largest oil services company, will take 5% stake in Abu Dhabi National Oil Company’s (ADNOC) drilling unit for $550mn under a tie-up. Baker Hughes (BHGE) becomes the first foreign company to take a stake in one of state-owned ADNOC’s services companies under the agreement, which values ADNOC Drilling at about $11bn. It will allow Baker Hughes to cement its presence in the Middle East, the fastest growing region for oil and gas operations, and enable ADNOC Drilling to gain access to the know-how and technical expertise of a global player. The transaction is expected to close before the end of this year, with operations starting in 2019, ADNOC and Baker Hughes stated. (Reuters)  Wataniya Airways currently negotiating with government to settle claims – Wataniya Airways is currently negotiating with the government to settle claims related to the cancellation of some flights and action taken by the executive authority for the airways to operate charter flights, Al-Anba daily reported, quoting sources. The financial settlement includes Wataniya Airways’ waiver on its real estate assets, indicating the government is calling for about KD2mn from the airways in return for transporting passengers and the cost of settlement will be determined in the coming days. (GulfBase.com)  Moody's: Omani banking system outlook is ‘Negative’ on weaker government support, softening asset quality – Moody's maintained its ‘Negative’ outlook for Oman's banking system, reflecting the diminishing capacity of Oman's government to support the country's banks in case need. The ‘Negative’ outlook also reflects banks' softening asset quality and relatively tight funding. (Moody’s)  Oman to privatize two electricity firms in 2019 – Oman plans to privatize two electricity companies next year to attract foreign investment and reduce subsidies, a senior official said, as the Arab oil producer seeks to boost state coffers that were depleted by a slump in oil prices. Oman’s state-owned Electricity Holding Co’s Vice President, Mansoor al Hinai said that the state aimed to sell stakes in Oman Electricity Transmission and Muscat Electricity Distribution, which have combined assets worth $3.2bn. Hinai said, “It took us some time to move to this step but we feel the sector is ready for privatization. We are confidently selling these assets. We’ll be looking for big players with a track record of actively owning such assets to come onboard in a consortium to deliver new technology to Oman such as electricity smart meters.” (Reuters)  Oman could announce US Dollar Sukuk sale as early as Monday – The government of Oman could announce a plan to issue new US Dollar denominated Sukuk, as early as October 8, according to sources. Oman has borrowed extensively in the international markets over the past few years to finance state spending and development projects at a time of lower oil prices. Its latest foray in the foreign debt markets was a $6.5bn conventional bond, the country’s largest ever, sold in January this year. With that bond, Oman covered the vast majority of $7.79bn deficit projected in its 2018 state budget. Oman’s Sukuk would be the country’s second public Islamic bond issue in international markets. It sold its first last year, raising $2bn with a seven- year maturity. (Reuters)  Alba’s production jump by 8% YoY for 9M2018 – Aluminium Bahrain (Alba) delivered strong operational performance with its overall sales and production volumes for 9M2018. Total sales volume topped 750,202 metric tons (mt), an increase of 7% YoY, versus 700,629 mt for 9M2017, while total production rose by 8% YoY to stand at 762,952 mt. For 3Q2018, the company reported a flat growth in its sales and production volume wherein total sales and production volume touched 248,970 mt and 251,472 mt respectively. Alba closed the third quarter and the nine months of 2018 with Value-Added Sales averaging 60% and 59% respectively. (Bahrain Bourse)  Bahrain's parliament gives final approval to VAT law – Bahrain’s upper house gave final approval to a draft law that will see value-added tax (VAT) imposed for the first time, state news agency BNA reported. Introducing VAT at 5% was part of a GCC agreement in 2018, a big step for governments that have traditionally levied little tax and relied instead on oil revenues. (Reuters)  GFH gets central bank’s approval for sale of real estate portfolio – Gulf Finance House (GFH) stated it has received a conditional approval from the Central Bank of Bahrain for sale of its real estate portfolio. GFH also confirmed that the offer received
  7. 7. Page 7 of 8 reached $1bn, with an expected upfront payment that ranges in between $250-$380mn, the company stated. The remaining payment is based on joint development terms over five years. The transaction will be subject to GFH’s shareholders approval before the execution. (GulfBase.com)
  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 8, 2018) 45.0 70.0 95.0 120.0 Aug-14 Aug-15 Aug-16 Aug-17 Aug-18 QSE Index S&P Pan Arab S&P GCC 0.6% (0.3%) (0.2%) 0.1% (0.2%) 0.3% (0.6%)(0.8%) (0.4%) 0.0% 0.4% 0.8% SaudiArabia Qatar Kuwait Bahrain Oman AbuDhabi Dubai Asset/Currency Performance Close ($) 1D% WTD% YTD% Global Indices Performance Close 1D%* WTD%* YTD%* Gold/Ounce 1,188.16 (1.2) (1.2) (8.8) MSCI World Index 2,143.57 (0.4) (0.4) 1.9 Silver/Ounce 14.37 (1.9) (1.9) (15.2) DJ Industrial 26,486.78 0.2 0.2 7.2 Crude Oil (Brent)/Barrel (FM Future) 83.91 (0.3) (0.3) 25.5 S&P 500 2,884.43 (0.0) (0.0) 7.9 Crude Oil (WTI)/Barrel (FM Future) 74.29 (0.1) (0.1) 23.0 NASDAQ 100 7,735.95 (0.7) (0.7) 12.1 Natural Gas (Henry Hub)/MMBtu 3.31 0.9 0.9 7.1 STOXX 600 372.21 (1.4) (1.4) (8.7) LPG Propane (Arab Gulf)/Ton 104.13 (0.1) (0.1) 5.2 DAX 11,947.16 (1.6) (1.6) (11.7) LPG Butane (Arab Gulf)/Ton 121.00 (0.2) (0.2) 11.5 FTSE 100 7,233.33 (1.3) (1.3) (9.0) Euro 1.15 (0.3) (0.3) (4.3) CAC 40 5,300.25 (1.4) (1.4) (4.7) Yen 113.23 (0.4) (0.4) 0.5 Nikkei# 23,783.72 0.0 0.0 3.5 GBP 1.31 (0.2) (0.2) (3.1) MSCI EM 995.50 (0.5) (0.5) (14.1) CHF 1.01 (0.0) (0.0) (1.8) SHANGHAI SE Composite 2,716.51 (4.6) (4.6) (22.9) AUD 0.71 0.4 0.4 (9.4) HANG SENG 26,202.57 (1.3) (1.3) (12.6) USD Index 95.76 0.1 0.1 3.9 BSE SENSEX 34,474.38 0.5 0.5 (12.7) RUB 66.58 (0.0) (0.0) 15.5 Bovespa 86,083.91 7.8 7.8 (0.9) BRL 0.26 1.7 1.7 (12.4) RTS 1,158.25 (0.1) (0.1) 0.3 76.0 73.6 71.7

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