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QNBFS Daily Market Report September 5, 2018

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The QSE Index rose 0.2% to close at 9,820.2.

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QNBFS Daily Market Report September 5, 2018

  1. 1. Page 1 of 6 QSE Intra-Day Movement Qatar Commentary The QSE Index rose 0.2% to close at 9,820.2. Gains were led by the Real Estate and Consumer Goods & Services indices, gaining 1.9% and 0.7%, respectively. Top gainers were Qatar First Bank and Investment Holding Group, rising 4.9% and 4.1%, respectively. Among the top losers, Doha Insurance Group fell 5.7%, while Dlala Brokerage & Investment Holding Company was down 1.2%. GCC Commentary Saudi Arabia: The TASI Index rose 0.3% to close at 7,968.2. Gains were led by the Pharma, Biotech & Life Sci. and Media indices, rising 2.8% and 1.2%, respectively. Saudi Real Estate Co. rose 6.7%, while Knowledge Economic City was up 5.0%. Dubai: The DFM General Index gained 0.3% to close at 2,837.2. The Banks index rose 0.6%, while the Real Estate & Const. index gained 0.3%. Drake & Scull International rose 4.4%, while Aan Digital Services Holding Co. was up 2.8%. Abu Dhabi: The ADX General Index rose 0.9% to close at 4,984.0. The Energy index gained 2.0%, while the Investment & Financial Services index rose 1.5%. Union National Bank gained 14.8%, while Abu Dhabi Commercial Bank was up 12.8%. Kuwait: The Kuwait Main market Index rose 0.1% to close at 4,868.0. The Banks index gained 1.1%, while the Telecom. index rose 0.8%. Burgan Co for Well Drilling, Trading & Maint. gained 7.8%, while Specialities Group Holding Co. was up 5.8%. Oman: The MSM 30 Index rose marginally to close at 4,429.2. Gains were led by the Industrial and Financial indices, rising 0.2% and 0.1%, respectively. Al Anwar Ceramic Tiles and Muscat Finance were up 3.5% each. Bahrain: The BHB Index gained 0.3% to close at 1,338.5. The Service index rose 0.6%, while the Commercial Banks index gained 0.3%. Al Salam Bank - Bahrain rose 6.2%, while Nass Corporation was up 2.1%. QSE Top Gainers Close* 1D% Vol. ‘000 YTD% Qatar First Bank 5.35 4.9 1,050.3 (18.1) Investment Holding Group 5.83 4.1 2,938.7 (4.4) Ezdan Holding Group 10.33 2.7 972.0 (14.5) Salam International Inv. Ltd. 5.18 2.6 106.5 (24.8) Qatar Oman Investment Company 6.10 1.7 13.6 (22.8) QSE Top Volume Trades Close* 1D% Vol. ‘000 YTD% Investment Holding Group 5.83 4.1 2,938.7 (4.4) Qatar First Bank 5.35 4.9 1,050.3 (18.1) Ezdan Holding Group 10.33 2.7 972.0 (14.5) Qatar Gas Transport Company Ltd. 17.50 0.5 674.9 8.7 Vodafone Qatar 8.91 (0.9) 640.1 11.1 Market Indicators 04 Sep 18 03 Sep 18 %Chg. Value Traded (QR mn) 114.9 99.6 15.3 Exch. Market Cap. (QR mn) 542,617.7 540,421.0 0.4 Volume (mn) 8.2 4.5 80.2 Number of Transactions 2,682 2,405 11.5 Companies Traded 42 41 2.4 Market Breadth 27:11 9:30 – Market Indices Close 1D% WTD% YTD% TTM P/E Total Return 17,302.07 0.2 (0.7) 21.1 14.6 All Share Index 2,871.66 0.4 (0.6) 17.1 14.9 Banks 3,517.25 0.2 (1.0) 31.1 14.3 Industrials 3,151.54 0.6 (0.1) 20.3 15.6 Transportation 2,032.56 0.2 (0.2) 15.0 12.7 Real Estate 1,845.50 1.9 0.3 (3.7) 15.7 Insurance 3,112.22 (0.6) (0.8) (10.6) 29.1 Telecoms 1,002.96 (0.8) (3.0) (8.7) 39.3 Consumer 6,252.07 0.7 1.6 26.0 13.6 Al Rayan Islamic Index 3,819.19 0.2 (0.1) 11.6 16.5 GCC Top Gainers ## Exchange Close # 1D% Vol. ‘000 YTD% Union National Bank Abu Dhabi 4.43 14.8 654.8 16.6 Abu Dhabi Comm. Bank Abu Dhabi 8.00 12.8 10,227.7 17.6 Al Salam Bank-Bahrain Bahrain 0.10 6.2 25.0 (9.6) Knowledge Economic City Saudi Arabia 10.84 5.0 2,757.9 (15.5) Alawwal Bank Saudi Arabia 14.96 4.8 776.3 26.4 GCC Top Losers ## Exchange Close # 1D% Vol. ‘000 YTD% Savola Group Saudi Arabia 29.25 (4.1) 569.6 (25.9) Middle East Healthcare Saudi Arabia 39.35 (3.6) 1,102.3 (26.9) Emaar Economic City Saudi Arabia 9.12 (2.8) 10,875.0 (32.4) Mouwasat Medical Serv. Saudi Arabia 82.90 (2.5) 61.5 9.5 Al Tayyar Travel Group Saudi Arabia 22.70 (2.1) 1,121.4 (16.0) 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% Doha Insurance Group 13.10 (5.7) 4.4 (6.4) Dlala Brokerage & Inv. Holding 13.60 (1.2) 76.5 (7.5) Medicare Group 67.58 (0.9) 33.3 (3.2) Vodafone Qatar 8.91 (0.9) 640.1 11.1 Ooredoo 70.80 (0.7) 71.2 (22.0) QSE Top Value Trades Close* 1D% Val. ‘000 YTD% Investment Holding Group 5.83 4.1 17,129.1 (4.4) Qatar Gas Transport Co. Ltd. 17.50 0.5 11,806.5 8.7 Ezdan Holding Group 10.33 2.7 9,778.1 (14.5) QNB Group 175.51 0.3 7,535.7 39.3 Industries Qatar 124.00 0.8 7,379.5 27.8 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* 9,820.18 0.2 (0.7) (0.7) 15.2 31.45 149,057.1 14.6 1.5 4.5 Dubai 2,837.17 0.3 (0.1) (0.1) (15.8) 30.71 101,257.8 7.6 1.1 6.0 Abu Dhabi 4,983.98 0.9 (0.1) (0.1) 13.3 48.67 135,190.1 13.1 1.5 4.8 Saudi Arabia 7,968.24 0.3 0.3 0.3 10.3 666.70 505,599.9 17.5 1.8 3.6 Kuwait 4,868.02 0.1 (0.6) (0.6) 0.8 50.00 33,579.7 15.1 0.9 4.3 Oman 4,429.19 0.0 0.2 0.2 (13.1) 3.68 18,845.9 10.7 0.9 6.2 Bahrain 1,338.49 0.3 0.0 0.0 0.5 2.19 20,541.1 9.0 0.8 6.1 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 9,860 9:30 10:00 10:30 11:00 11:30 12:00 12:30 13:00
  2. 2. Page 2 of 6 Qatar Market Commentary  The QSE Index rose 0.2% to close at 9,820.2. The Real Estate and Consumer Goods & Services 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 First Bank and Investment Holding Group were the top gainers, rising 4.9% and 4.1%, respectively. Among the top losers, Doha Insurance Group fell 5.7%, while Dlala Brokerage & Investment Holding Company was down 1.2%.  Volume of shares traded on Tuesday rose by 80.2% to 8.2mn from 4.5mn on Monday. Further, as compared to the 30-day moving average of 6.5mn, volume for the day was 26.1% higher. Investment Holding Group and Qatar First Bank were the most active stocks, contributing 35.9% and 12.8% to the total volume, respectively. Source: Qatar Stock Exchange (* as a % of traded value) Global Economic Data Date Market Source Indicator Period Actual Consensus Previous 09/04 US Markit Markit US Manufacturing PMI August F 54.7 54.5 54.5 09/04 EU Eurostat PPI MoM July 0.4% 0.3% 0.4% 09/04 EU Eurostat PPI YoY July 4.0% 3.9% 3.6% Source: Bloomberg (s.a. = seasonally adjusted; n.s.a. = non-seasonally adjusted; w.d.a. = working day adjusted) News Qatar  ILO praises Qatar’s legislation ending exit permit system – Praising the new law pertaining to ending exit permit, the International Labour Organization (ILO) stated that the new legislation marks a ‘significant step in upholding the fundamental rights’ of migrant workers in Qatar. Under the new legislation, migrant workers in Qatar covered by the Labor Law will no longer have to obtain exit permits in order to leave the country. “The ILO welcomes the enactment of Law No. 13, which will have a direct and positive impact on the lives of migrant workers in Qatar. This first step towards full suppression of exit permits is a clear sign of commitment by the Government of Qatar to labour reforms and a key milestone in the process. The ILO will continue to work closely with the government of Qatar on these reforms,” Houtan Homayounpour, the Head of the ILO Project Office for the State of Qatar, stated. Emir HH Sheikh Tamim bin Hamad Al Thani issued the Law No. 13 of 2018, amending certain provisions of the Law No. 21 of 2015 regulating the entry, exit and residency of expatriates. The law has amended the article No. 7 of the law 21 of 2015. The amendment stipulates that the expatriates under the labor law have the right to leave the country temporarily or permanently without exit permit while his work contract is valid. The law stipulates that the employers have the right to submit a list of employees who require prior permit to leave the country to the Ministry of Administrative Development, Labor and Social Affairs. The request must indicate clearly the reasons and the list must not exceed 5% of the company’s employees to take approval before leaving the country, as per the nature of their works. (Peninsula Qatar)  New law allows permanent residency for expats in Qatar – Emir HH Sheikh Tamim Bin Hamad Al Thani issued the Law No. 10 of 2018 on permanent residency. The law, consisting of 13 articles, is effective and is to be published in the official gazette and the Minister of Interior will issue decisions and executive regulations needed for the implementation of the law. A permanent committee called ‘Committee for Granting Permanent Residency Permit’ will be set up at the Ministry of Interior to look into the application as per the provisions of this law. According to the law, the expatriates in Qatar could obtain permanent residency permit (PRP) of Qatar under certain rules and conditions. For obtaining PRP, any expatriate in Qatar should complete 20 years in the country on a legal ordinary residency permit if he/she is born abroad and 10 years for those expatriates who are born in Qatar. The residency duration should be uninterrupted and completed prior to the date of application. Under the law, the continuation of the residency should not be interrupted by staying outside Qatar for more than 60 days in a year and in all cases the duration of stay out of the country will be deducted from the balance of the residency duration in Qatar. The Minister of Interior will grant an ID card called ‘Permanent Residency Permit’ to the eligible candidates. According to the Law, PRP should not be given to more than 100 people in a year. It is allowed to increase the number of issuance of PRP after approval from HH the Emir upon the recommendation of the Minister of Interior, which will be different in number for each year. PRP holders can invest in the activities of national economic sectors which will be specified by a Cabinet decision without a Qatari partner to establish a company as per the provisions of the law for regulating commercial companies. PRP holder can own Overall Activity Buy %* Sell %* Net (QR) Qatari Individuals 35.92% 46.89% (12,598,146.05) Qatari Institutions 22.40% 13.52% 10,197,666.14 Qatari 58.32% 60.41% (2,400,479.91) GCC Individuals 1.70% 2.45% (862,864.08) GCC Institutions 1.95% 5.07% (3,579,434.51) GCC 3.65% 7.52% (4,442,298.59) Non-Qatari Individuals 16.78% 18.34% (1,789,828.53) Non-Qatari Institutions 21.25% 13.73% 8,632,607.03 Non-Qatari 38.03% 32.07% 6,842,778.50
  3. 3. Page 3 of 6 residential properties and invest in Al Manatiq as per the rules and regulations to be specified by a Cabinet decision. A decision will be issued by the Minister of Interior to specify the fees for applying for PRP, granting PRP ID, and validity. (Peninsula Qatar)  The Group Islamic Insurance Company postpones its EGM to September 11 due to lack of quorum – The Group Islamic Insurance Company, formerly known as Qatar Islamic Insurance Company, announced that due to non-legal quorum for the first Extraordinary General Assembly Meeting (EGM) on September 4, 2018, it postponed the meeting to the second (substitute) on September 11, 2018. (QSE)  Qatar’s GDP may exceed QR773bn by 2022 – Qatar’s gross domestic product (GDP) may exceed QR773bn ($212bn) by 2022, according to a recent report. FocusEconomics, in its country report, noted that Qatar’s GDP this year would be QR632bn ($173bn) and QR666bn ($183bn) in 2019. GDP per capita in Dollar terms will be $62,493 this year and $75,032 in 2022. The country’s international reserves will scale up to $28.7bn (QR104.5bn) in 2022. FocusEconomics noted that higher oil prices and infrastructure push related to FIFA 2022 should drive the country’s growth this year. FocusEconomics sees Qatar’s international reserves totaling $22.2bn this year. Qatar’s merchandise trade balance would amount to $47.3bn (QR172.1bn) by the year-end. Next year, it would be nearly $47.1bn (QR171.4bn). Qatar’s current account balance (as a percentage of GDP) will be 7.6% this year, according to an estimate by FocusEconomics. Next year, it will be 6.8% of the country’s GDP. Fiscal balance (as a percentage of GDP) will be 3.3% in 2022 from -1.7% this year. The country’s public debt (as a percentage of GDP) is expected to drop to 51% in 2022 from 55.6% this year and 55% in 2019. (Gulf-Times.com)  QFCRA signs 21 MoUs with securities regulators in EU – The Qatar Financial Centre Regulatory Authority (QFCRA) completed the signing of 21 memoranda of understanding (MoU) with securities regulators in the European Union (EU). The MoUs were coordinated by the European Securities and Markets Authority (ESMA), following its review of Qatar Financial Centre’s (QFC) legislative and supervisory framework and its approval of QFCRA as a MoU counterparty. The signatories to the MoUs with the QFCRA include the securities regulators in France, the UK, Netherlands, Ireland, Portugal, Luxembourg, Cyprus, Sweden, Denmark, Norway, Iceland, Liechtenstein, Malta, Lithuania, Greece, Poland, Estonia, Latvia, Slovak Republic, Bulgaria and Austria. The MoUs create the opportunity for QFC’s Fund Managers to manage and market funds (such as real estate funds, private equity funds and hedge funds) to professional investors in the EU and represent a significant opportunity for asset managers authorized in the Qatar Financial Centre. (Gulf-Times.com)  Al-Baker: India an important market for Qatar Airways – Qatar and India share a “substantive and strong relationship” that has evolved over the years, making India an important market for Qatar Airways, said company’s Chief Executive, Akbar Al- Baker. “India is on track to become the third largest global aviation market by 2025 and we are determined to further grow our presence in the Indian market by offering passengers the award-winning quality of service that they deserve,” Al-Baker said at the International Aviation Summit in New Delhi. “That India is an important market for Qatar Airways is reflected on the 102 weekly flights we provide to 13 destinations across India,” Al-Baker noted. (Gulf-Times.com)  Volume of approvals under Al Dhameen Program reaches QR1.5bn in 1H2018 – Qatar Development Bank (QDB) announced that the volume of approvals within Al Dhameen Program in 1H2018 amounted to about QR1.5bn, in addition to the issuance of guarantees of about QR1bn through 8 partner banks to more than 250 Qatari firms. This was revealed by Jawahar Humaid Al Nuaimi, Director of Al Dhameen Program at QDB, during the ‘Best Partner Bank Award’ ceremony, organized by QDB for supporting small and medium-sized enterprises (SMEs). (Peninsula Qatar)  Qatar’s ICT market likely to reach $4.4bn in 2021 – Information and Communication Technology (ICT) sector is poised for strong growth in coming years. Minister of Transport and Communications, HE Jassim bin Saif Al Sulaiti said that Qatar’s ICT market, which was estimated to be around $3.9bn in 2017, is expected to grow by 2.3% per annum to reach $4.4bn in 2021. The Minister was speaking at the ‘Qatar IT Business Awards 2018’ which was organized by the Ministry of Transport and Communications (MOTC). (Peninsula Qatar)  TMQ renews supply agreement with Qatar Automobiles Co. – Total Marketing Qatar (TMQ) renewed the supply agreement with Qatar Automobiles Co., the authorized distributor of Mitsubishi Motors and FUSO in Qatar and a subsidiary of NBK Group Company, for the supply of high performance Total branded lubricants in their service centers across Qatar. Total Marketing Qatar, an international lubricant company, with prominent share in the country, will support Mitsubishi network and its customers to provide the latest generation of TOTAL QUARTZ lubricants to enhance the performance of Mitsubishi vehicles. (Peninsula Qatar) International  US factory activity hits 14-year high; supply constraints rising – US manufacturing activity accelerated to more than a 14-year high in August, boosted by a rise in new orders, but increasing bottlenecks in the supply chain because of a robust economy and import tariffs could restrain further growth. The Institute for Supply Management (ISM) survey was at odds with another survey published that suggested a peak in manufacturing and pointed to a slowdown in the months ahead against the backdrop of a strong Dollar. Recent surveys have also signaled a cooling in regional factory activity. The ISM said its index of national factory activity jumped to 61.3 last month, the best reading since May 2004, from 58.1 in July. A reading above 50 indicates growth in manufacturing, which accounts for about 12% of the US economy. The ISM described demand as remaining “robust,” but cautioned that “the nation’s employment resources and supply chains continue to struggle.” According to the ISM, survey respondents were “again overwhelmingly concerned about tariff-related activity, including how reciprocal tariffs will impact company revenue and current manufacturing locations.” (Reuters)  Eurozone’s producer prices up more than expected in July – Eurozone’s producer prices rose slightly more than forecast in July, driven by expensive energy, data released by the European
  4. 4. Page 4 of 6 Union statistics agency showed. Eurostat stated prices at factory gates in the 19 countries sharing the Euro rose 0.4% MoM in July against market expectations of a 0.3% rise in a Reuters poll of economists. On YoY basis, producer prices rose 4.0% in July, against market expectations of a 3.9% gain. Energy prices rose 1.1% on the month and were 10.7% higher than a year earlier, making energy the biggest variable in the overall index. Without volatile energy, producer prices rose only 0.1% MoM and 1.7% YoY, confirming the view of the European Central Bank’s Chief, Mario Draghi that spiking energy prices are the main reason for higher inflation. (Reuters)  Japan’s August services PMI hits four-month high, pace of hiring increases – Activity in Japan’s services sector rose in August to the highest level in four months due to higher sales and new store openings, a private survey showed, highlighting the strength of domestic demand. The Markit/Nikkei Japan Services Purchasing Managers Index (PMI) increased to 51.5 on a seasonally adjusted basis from 51.3 in July. The index has remained above the 50 threshold that separates expansion from contraction for 23 consecutive months. In August, new business expanded at the fastest pace in four months and companies added workers at the highest rate in 14 months, suggesting the economy remains healthy. Factory activity also picked up in August, according to earlier Markit/Nikkei survey, but economists warn that trade protectionism is a risk to Japan’s export-oriented economy. (Reuters)  Caixin PMI: China’s services sector growth slows further in August, inflation pressures rising – Growth in China’s services sector weakened again in August as new business picked up only slightly from July’s more than two-year low, a private survey showed. The downturn in the key part of the economy comes at a trying time for Beijing, which is facing an escalating trade war with the US that threatens the country’s massive manufacturing sector at a time of a deepening domestic slowdown. For August, the Caixin/Markit services purchasing managers’ index (PMI) fell to 51.5, the lowest in 10 months, from July’s 52.8. The 50-mark separates growth from contraction. Government officials have long touted a strong expansion in services as evidence of the economy rebalancing to more sustainable growth, though weaker consumer spending and a housing slowdown may be putting a dent in overall output. (Reuters) Regional  Infrastructure projects to drive demand for suppliers in the GCC – In the coming 20 years, non-OECD (Organisation for Economic Co-operation and Development) states are projected to spend more than $57tn on infrastructure projects, compared to $34tn by OECD countries, according to Strategy& Middle East. In conjunction with these spendings, policymakers in non-OECD countries have increased their commitment to promote localization of their infrastructure spends. Nearly 300 local content requirements measures are currently in place in non- OECD countries. According to the Strategy& report, such an approach is particularly important for the GCC, where governments are investing significant sums to develop infrastructure. Saudi Arabia is likely to spend $1.1tn from 2019- 2038, while the UAE is scheduled to invest $350bn over a similar time frame. These large development schemes can allow local companies not just to substitute imports, but also grow non-oil exports by enhancing their capabilities. (GulfBase.com)  Moody’s: Sukuk issuance likely to reach $100bn in 2018 – Global Sukuk issuance is expected to reach $90-$100bn in 2018, in line with 2017 levels, according to Moody’s Investors Service (Moody’s). The expectation of Moody’s of broadly stable issuance for the year, despite 12% decrease to $55bn in 1H2018, is supported by regular issuance from government and corporate entities in Malaysia (‘A3’ ‘Stable’) and Indonesia (‘Baa2’ ‘Stable’) in 2H2018. The decrease in Sukuk issuances during 1H2018 was driven by lower volumes from the GCC region. “Over the long term, we expect Sukuk issuance volumes to continue to grow as governments across the core Islamic finance markets shift their financing mix towards a combination of conventional and Islamic instruments,” Nitish Bhojnagarwala, a Vice President and Senior Credit Officer at Moody’s said. (Peninsula Qatar)  Markaz: EM currencies depreciation weighs on GCC market – GCC markets gave up some of their recent gains in the previous months due to emerging market (EM) currencies depreciation against the US Dollar and the selling pressure. The month of August halted the positive momentum, amongst majority of GCC markets, which prevailed in the recent months as the investors booked profits. Turmoil in Turkey and pullout of much and long awaited IPO of Saudi Aramco contributed to the negative sentiment, Kuwait Financial Centre (Markaz) noted in its monthly market review. In terms of YTD performance, Qatar index delivered 16% since the beginning of the year making it the best performing market across emerging and developed markets globally. Qatar markets continued to remain strong post Moody’s decision to change the country’s sovereign outlook from ‘Negative’ to ‘Stable’.  MSCI to launch tradable index with Saudi Arabia’s exchange in 4Q2018 – Global index provider MSCI stated it signed an agreement with Tadawul to jointly launch a tradable index later this year in a move that could spur the growth of derivatives and exchange-traded funds. Tadawul stated in a separate statement it would introduce exchange-traded derivatives in 1H2019. The moves come after MSCI classified the Saudi Arabian equity market as an emerging market in June, which is expected to attract billions of Dollars of passive funds. MSCI stated the index would be based on the broader MSCI Saudi Arabia index series, part of the MSCI Emerging Markets Index. The joint tradable index will be available in 4Q2018. Further, Tadawul will introduce exchange-traded derivatives in 1H2019 and launch an index futures contract based on the tradable index jointly developed with MSCI. Saudi Arabia’s inclusion into the major emerging markets indices further validates the need for this market. Tadawul is planning to launch additional derivative products gradually as part of its strategy to diversify its product offering and provide more investment opportunities for market participants. (Reuters, Tadawul)  Saudi Arabia’s PIF to sign $11bn loan next week – Saudi Arabia’s sovereign wealth fund, Public Investment Fund (PIF), is set to sign $11bn syndicated loan next week, according to bankers close to the deal, which will help to fund the Kingdom’s economic transformation plans. The deal will be the first commercial loan for PIF, which is tasked with helping to deliver
  5. 5. Page 5 of 6 Saudi Arabia’s Vision 2030 reform plan, as the country reduces its reliance on oil exports. The loan will have a five-year maturity and is structured as a club loan, with 14-16 banks making commitments of up to $1bn at three different levels. (Reuters)  PMI: Saudi Arabia’s private-sector growth in August is fastest this year – Growth in Saudi Arabia’s non-oil private sector edged up in August to its fastest rate this year, a survey of companies showed, suggesting a long-awaited recovery of the economy may have begun. The economy has been hit hard in the last few years by low oil prices and government austerity, but the International Monetary Fund predicts it will start picking up this year as state spending and oil output increase. The corporate survey indicated that process may now be underway. The seasonally adjusted Emirates NBD Saudi Arabia Purchasing Managers’ Index rose to 55.1 last month from 54.9 in July; a level above 50 indicates expansion. Output growth accelerated to 59.7 from 58.8, while growth of new orders climbed to 59.0 from 58.5. Employment growth slowed marginally, however, to 51.0. (Reuters)  Saudi Aramco plans to ship first crude oil to Malaysia JV refinery in October – Saudi Aramco plans to deliver the first crude oil cargo to its joint-refinery (JV) project with Petronas in Malaysia in October as the companies prepare for trial runs at the new plant, according to sources. The project, Refinery and Petrochemical Integrated Development, is a $27bn complex located between the Malacca Strait and the South China Sea, conduits for Middle East oil and gas bound for China, Japan and South Korea. (Reuters)  Saudi Arabia’s Ministry of Finance denies imposing fees on foreign worker remittances – Saudi Arabia’s Ministry of Finance denied reports that it was planning to impose fees on the remittances of foreign workers. The ministry stated it was committed to supporting the free movement of capital through official channels in accordance with international standards and practices. The Kingdom is home to more than 10mn foreign workers, who in 2017, sent almost $38bn to their home countries. (GulfBase.com)  UAE’s private-sector growth slows in August as employment slumps – Expansion of the UAE’s’ non-oil private sector slowed to a five-month low in August as total employment shrank for the first time on record, a survey of companies showed. The seasonally adjusted Emirates NBD UAE Purchasing Managers’ Index (PMI), which covers manufacturing and services, fell to 55.0 last month from 55.8 in July. A reading above 50 indicates expansion and below that level, contraction. Output growth accelerated to 63.1 from 61.9, but growth in new orders slowed to a 20-month low of 57.1 from 60.6. The reading for employment sank to 49.0 from 50.2, falling below 50 for the first time since the survey was launched in August 2009. (Reuters)  Higher yield on credit drives profitability of leading UAE banks – Improved yield on credit saw a significant rise in profitability for the top ten UAE banks in 2Q2018, according to an analysis of data by global professional services firm Alvarez & Marsal (A&M). Net interest margin (NIM) of these banks again increased by 2.61%, at a higher rate than 2.55% in 1Q2018. The increase was driven by a rise in yield on credit, which more than offset a parallel increase in cost of funds. Only three of the top ten banks reported a decrease in NIM. Data showed UAE banks’ profitability continued to increase, with operating income and net interest margins significantly higher than in the previous quarter. Deposits grew at faster rate of 2.18% than loans and advances at 1.75%, resulting in a slightly reduced average loan- to-deposit (LDR) ratio for 2Q2018. Despite this, eight of the top ten banks remained in the LDR green zone of between 80% and 100%. (GulfBase.com)  Bahrain Islamic Bank inks Fontana Project finance deal – Bahrain Islamic Bank stated it has signed a joint venture agreement with Royal Ambassador Property Management, a real estate property management company to provide private financing for potential residents of the Fontana Project. This should enable both national and expats working in Bahrain, or the GCC to buy residential units the real estate development. (GulfBase.com)
  6. 6. 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 6 of 6 Rebased Performance Daily Index Performance Source: Bloomberg Source: Bloomberg Source: Bloomberg ( # Market closed on September 4, 2018) Source: Bloomberg (*$ adjusted returns) 50.0 75.0 100.0 125.0 Aug-14 Aug-15 Aug-16 Aug-17 Aug-18 QSEIndex S&P Pan Arab S&P GCC 0.3% 0.2% 0.1% 0.3% 0.0% 0.9% 0.3% 0.0% 0.5% 1.0% SaudiArabia Qatar Kuwait Bahrain Oman AbuDhabi Dubai Asset/Currency Performance Close ($) 1D% WTD% YTD% Global Indices Performance Close 1D%* WTD%* YTD%* Gold/Ounce 1,191.56 (0.8) (0.8) (8.6) MSCI World Index 2,162.83 (0.5) (0.6) 2.8 Silver/Ounce 14.16 (2.4) (2.7) (16.4) DJ Industrial 25,952.48 (0.0) (0.0) 5.0 Crude Oil (Brent)/Barrel (FM Future) 78.17 0.0 1.0 16.9 S&P 500 2,896.72 (0.2) (0.2) 8.3 Crude Oil (WTI)/Barrel (FM Future) 69.87 0.1 0.1 15.6 NASDAQ 100 8,091.25 (0.2) (0.2) 17.2 Natural Gas (Henry Hub)/MMBtu# 2.96 0.0 0.0 (4.2) STOXX 600 379.83 (1.0) (0.8) (6.0) LPG Propane (Arab Gulf)/Ton 105.00 1.2 1.2 6.1 DAX 12,210.21 (1.4) (1.4) (9.0) LPG Butane (Arab Gulf)/Ton 115.25 0.4 0.4 6.2 FTSE 100 7,457.86 (0.8) (0.5) (7.8) Euro 1.16 (0.3) (0.2) (3.5) CAC 40 5,342.70 (1.6) (1.3) (3.1) Yen 111.41 0.3 0.3 (1.1) Nikkei 22,696.90 (0.3) (1.0) 0.8 GBP 1.29 (0.1) (0.8) (4.9) MSCI EM 1,040.17 (0.7) (1.5) (10.2) CHF 1.03 (0.5) (0.6) 0.0 SHANGHAI SE Composite 2,750.58 0.9 0.9 (21.0) AUD 0.72 (0.5) (0.2) (8.1) HANG SENG 27,973.34 0.9 0.3 (6.9) USD Index 95.44 0.3 0.3 3.6 BSE SENSEX 38,157.92 (0.7) (2.0) 0.2 RUB 68.12 (0.0) 0.9 18.2 Bovespa 74,711.80 (2.8) (4.3) (22.4) BRL 0.24 (0.0) (2.6) (20.4) RTS 1,082.21 (0.3) (0.9) (6.3) 81.3 79.1 76.3

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