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Weekly market report


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Weekly market report

  1. 1. Page 1 of 5 Market Review and Outlook QE Index and Volume The Qatar Exchange (QE) Index gained 501.53 points, or 4.37%, during the trading week, to close at 11,983.87 points. Market capitalization increased by 3.87% to reach QR668.5 billion (bn) as compared to QR643.5bn at the end of the previous week. Of the 43 listed companies, 38 companies ended the week higher, while 5 fell. Qatar Oman Investment Company (QOIS) was the best performing stock for the week, with a gain of 14.46% on 6.8 million (mn) shares traded. On the other hand, Qatar General Insurance & Reinsurance (QGRI) was the worst performing stock with a decline of 4.53% on only 70,742 shares traded. Qatar announced its FY2014/15 budget during the week. The budget focuses on balancing revenues and expenditures to promote sustainable development in the country. Total revenues are projected to be QR225.7bn compared to QR218.0bn in the previous budget, an increase of QR7.7bn or 3.5% year-over-year (YoY). Projections of total expenditures amount to QR218.4bn compared to QR210.6bn in the last FY budget, an increase of QR7.8bn (3.7% YoY). Hence, a budget surplus of QR7.3bn is expected to be achieved. The overall budget aims to provide strong support for the private sector‟s participation in the development process. Also effective measures to control inflationary pressures have been considered in the budget. The framework of the budget was drawn up clearly aiming that it would help translate the key pillars of Qatar National Vision 2030 into reality. Trading value during the week increased by 25.22% to reach QR3.96bn vs. QR3.16bn in the prior week. The Banks & Financial Services sector led the trading value during the week, accounting for 29.1% of the total equity trading value. Barwa Real Estate (BRES) was the top value traded stock during the week with total traded value of QR496.2mn. Trading volume increased by 19.74% to reach 93.6mn shares vs. 78.1mn shares in the prior week. The number of transactions rose by 6.50% to reach 46,542 transactions versus 43,701 transactions in the prior week. The Real Estate sector led the trading volume, accounting for 31.5%. BRES was also the top volume traded stock during the week with total traded volume of 13.3mn shares. Foreign institutions remained bullish for the week with net buying of QR340.9mn vs. net buying of QR195.7mn in the prior week. Qatari institutions remained bearish with net selling of QR95.0mn vs. net selling of QR118.9mn the week before. Foreign retail investors remained bearish for the week with net selling of QR53.5mn vs. net selling of QR24.0mn in the prior week. Qatari retail investors remained bearish with net selling of QR191.6mn vs. QR52.8mn the week before. Market Indicators Week ended Apr 03, 2014 Week ended Mar 27, 2014 Chg. % Value Traded (QR mn) 3,959.3 3,161.9 25.2 Exch. Market Cap. (QR mn) 668,463.0 643,530.9 3.9 Volume (mn) 93.6 78.1 (15.3) Number of Transactions 46,542 43,701 6.5 Companies Traded 43 43 0.0 Market Breadth 38:5 20:22 – Market Indices Close WTD% MTD% YTD% Total Return 17,824.90 4.6 20.2 N/A All Share Index 3,075.37 4.4 18.9 15.0 Banks/Financial Svcs. 2,941.89 5.3 20.4 14.8 Industrials 4,221.37 3.6 20.6 15.8 Transportation 2,089.81 3.2 12.5 13.8 Real Estate 2,305.00 3.9 18.0 14.8 Insurance 2,901.24 3.3 24.2 7.7 Telecoms 1,578.50 5.5 8.6 21.2 Consumer 7,060.91 2.5 18.7 31.1 Al Rayan Islamic Index 3,703.89 4.8 22.0 17.2 Market Indices Weekly Index Performance Regional Indices Close WTD% MTD% YTD% Weekly Exchange Traded Value ($ mn) Exchange Mkt. Cap. ($ mn) TTM P/E** P/B** Dividend Yield Qatar (QE)* 11,983.87 4.4 3.0 15.5 1,087.29 176,713.6 15.2 2.0 4.1 Dubai 4,618.28 5.4 3.8 37.0 2,457.31 87,904.6 20.2 1.7 2.1 Abu Dhabi 4,923.47 1.4 0.6 14.8 865.62 128,557.4 14.8 1.8 3.8 Saudi Arabia 9,558.46 1.4 1.4 12.0 11,152.55 517,402.2# 19.6 2.4 3.1 Kuwait 7,572.47 (0.2) (0.0) 0.3 604.55 114,985.2 17.0 1.2 3.8 Oman 6,775.77 (2.1) (1.2) (0.9) 123.75 24,842.2 11.3 1.6 3.9 Bahrain 1,367.47 2.0 0.8 9.5 85.84 51,286.0 9.6 0.9 5.0 Source: Bloomberg, country exchanges and Zawya (** Trailing Twelve Months; * Value traded ($ mn) do not include special trades, if any) (#Data as of April 02, 2014) 11,562.87 11,639.79 11,905.94 11,939.95 11,983.87 0 12,500,000 25,000,000 11,300 11,700 12,100 30-Mar 31-Mar 1-Apr 2-Apr 3-Apr Volume QE Index 5.4% 4.4% 2.0% 1.4% 1.4% (0.2%) (2.1%)(3.5%) 0.0% 3.5% 7.0% Dubai Qatar Bahrain AbuDhabi SaudiArabia Kuwait Oman
  2. 2. Page 2 of 5 News Economic News  Qatar’s FY2014/15 budget focuses on balancing revenues and expenditures to promote sustainable development – Projections of total revenues in FY 2014/2015 budget amount to QR225.7 billion (bn) compared to QR218.0 billion in the previous budget with a QR7.7bn increase of 3.5%. Projections of total expenditures amount to QR218.4 billion compared to QR210.6 billion in the last FY budget with a QR7.8bn increase of 3.7%. A budget surplus of QR7.3bn is expected to be achieved. The overall budget aims to provide strong support for the private sector‟s participation in the development process. Also effective measures to control inflationary pressures have been considered in the budget. The framework of the budget was drawn up clearly aiming that it would help translate the key pillars of Qatar National Vision 2030 into reality (Ministry of Finance Press Release,  Qatar’s real GDP growth accelerated to 6.5% in 2013 on strong investment and higher population – Qatar‟s economy continued to maintain its strong growth momentum in the fourth quarter of 2013. Qatar‟s real GDP expanded at a buoyant 5.6% (year-on-year) in the last three months of 2013, spurred by double-digit growth in construction, wholesale trade and hospitality, and financial, real estate, and business services, according to figures released by the Ministry of Development Planning and Statistics (MDPS). For 2013 as a whole, real GDP grew 6.5%, in line with QNB Group‟s forecast (see Qatar Economic Insight report). QNB Group expects real GDP growth to accelerate to 6.8% in 2014 as the implementation of large infrastructure projects and higher population continue to drive double-digit growth in the non-hydrocarbon sector. The growth figures for the fourth quarter of 2013 confirm the continued process of economic diversification of Qatar‟s economy away from its traditional role as a hydrocarbon exporter toward a manufacturing and services hub. The oil and gas sector contracted by 1.1% year-on-year in 4Q2013, reflecting a fall in oil production, the temporary halt of a number of LNG trains for maintenance, as well as the moratorium on further exploration of the North Field. At the same time, wholesale trade, hotels and restaurants was the fastest growing sector (19.3% year-on- year), predominantly on the back of the double-digit increase in population. Financial, real estate, and business services was the second fastest growing sector (18.1% year-on-year) as banking intermediation accelerated and real estate services were boosted by the growing population. Construction activity expanded by 15.0% year-on-year as Qatar‟s infrastructure investment program is gathering momentum. (QNB Group, Ministry of Development Planning and Statistics, Gulf-  MDPS: Qatar’s labor force tops 1.5mn in 4Q2013 – According to the Labor Force Sample Survey released by the Ministry of Development Planning & Statistics (MDPS), the number of economically active people in Qatar rose to 1.545mn in 4Q2013, up from the 1.482mn registered in 3Q2013. Economic dependency amounted to 32% in 4Q2013, marking a slight decrease from the 34% recorded in 3Q2013. Qatar had a working-age population (15 years+) of 1.8mn people in 4Q2013, of which 1.4mn of them were males. The Qatari working-age population was 181,000 individuals, comprising 10% of the total working-age population. Of the 1.545mn economically active people, 87% were males. The Qatari labour force had 96,000 economically active people, 67% of whom were males. The labor force‟s total economic participation was 88%, of which the 25-34 age group registered the highest participation rate at 93%, while youth (15-24 years) participation was 73%. According to the survey, the monthly average salary for the total working population stood at QR10,000 for males, while it was QR8,000 for females. Unemployment among all individuals participating in the labor force was just 0.2%, but among Qatari nationals, it was 1.5%. (  QCB auctions t-bills worth QR4bn – Qatar Central Bank (QCB) auctioned t-bills worth QR4bn, for which it received bids totaling QR12.6bn. T-bills worth QR2bn, with a maturity period of 3 months were auctioned at a yield of 0.68%. T-bills worth QR1bn, with a maturity period of 6 months were sold at a yield of 0.92%, while t-bills with a maturity period of 9 months were auctioned at a yield of 0.97%. All the t-bills were issued on April 1, 2014. (QCB) Market & Corporate News  GISS to acquire JDC’s 30% share in GDI at net book value – Gulf International Services (GISS) has signed a share purchase agreement (SPA) with Japan Drilling Company (JDC) to acquire all of JDC‟s 30% share in Gulf Drilling International (GDI). GISS shall own all of JDC‟s shares in GDI starting May 1, 2014, making GDI a wholly owned subsidiary of GISS. Further, GDI and JDC also signed a letter of intent for the exchange of technical cooperation between the two companies and the promotion of mutually beneficial business opportunities. Now established as a world-class drilling contractor, GDI is in the process of doubling the size of its total fleet (offshore, onshore, lift boats, barges, etc), from 9 to 18, over 2012-2014. With its share of GDI‟s results increasing from 70% to 100%, GISS will enjoy substantially higher earnings from GDI in the future by having a larger share of a bigger operation. GISS Chief Coordinator, Mr. Ebrahim Al Mannai advised that consolidated revenue for the GISS group is projected to reach QR3.5bn in 2014 due to the GDI acquisition. Mr. Al Mannai added that the fundamentals of the GISS investment to increase its stake in GDI were favorable. The price of JDC‟s 30% stake will be valued at 30% of GDI‟s net book value as of 30 April 2014, pursuant to the joint venture agreement between GISS and JDC, while the fair market value of GDI‟s assets, with the majority of its rigs on multiyear contracts and utilization at 100%, is well above that value. The net book value and acquisition cost is approximately $160mn, subject to change due the final account settlements on the acquisition date. Meanwhile, the fair market value is estimated to be QR1.2bn. Moreover, expected additional revenue in 2014 from the acquisition is expected to reach QR445mn with additional net profit of QR150mn. (QE, GISS Press Release)  IQCD to focus on maximizing current operating assets, explore international opportunities – Industries Qatar‟s (IQCd) Chairman and HE the Minister of Energy & Industry, Dr. Mohamed bin Saleh Al-Sada said that the company is expecting minimal organic expansion in the coming five years and will focus on maximizing its current operating assets as well as exploring international opportunities and selective products diversification. Al-Sada added that with the conclusion of a QR12.8bn capital expenditure & investment program in 2012 and the nascent stage of IQ‟s most-recently announced projects, its profits will be primarily determined by international product prices and facility utilization rates. He stated that during this intervening period, before the launch of IQ‟s next phase of major projects in Algeria and Qatar, it will continue to focus on maximizing the value of its current operating assets, exploring opportunities to replicate its existing business model beyond Qatar and diversifying into specialized products on a selective basis. (, Bloomberg)
  3. 3. Page 3 of 5 Qatar Exchange Top 5 Gainers Top 5 Decliners Source: Qatar Exchange (QE) Source: Qatar Exchange (QE) Most Active Shares by Value (QR Million) Most Active Shares by Volume (Million) Source: Qatar Exchange (QE) Source: Qatar Exchange (QE) Investor Trading Percentage to Total Value Traded Net Traded Value by Nationality (QR Million) Source: Qatar Exchange (QE) Source: Qatar Exchange (QE) 14.5% 12.5% 10.6% 10.1% 9.0% 0.0% 6.0% 12.0% 18.0% Qatar & Oman Investment Gulf International Services Mazaya Qatar Widam Food Co. Qatar National Cement -4.5% -2.8% -2.4% -2.2% -1.8% -6.0% -4.0% -2.0% 0.0% Qatar General Insurance & Reinsurance Qatar German Co. for Medical Devices Mesaieed Petrochemical Holding Company Qatar Cinema & Film Distribution Doha Bank 496.2 406.2 271.7 242.1 239.1 0.0 200.0 400.0 600.0 Barwa Real Estate Gulf International Services QNB Group Mesaieed Petrochemical Holding Company Masraf Al Rayan 13.3 9.9 8.5 6.8 6.7 0.0 5.0 10.0 15.0 Barwa Real Estate Mazaya Qatar Vodafone Qatar Qatar & Oman Investment Mesaieed Petrochemical Holding Company 0% 20% 40% 60% 80% 100% Buy Sell 44.35% 49.19% 19.10% 21.50% 15.49% 16.84% 21.07% 12.46% Qatari Individuals Qatari Institutions Non-Qatari Individuals Non-Qatari Institutions 2,512 1,448 2,799 1,160 (287) 287 (500) - 500 1,000 1,500 2,000 2,500 3,000 Qatari Non-Qatari Net Investment Total Sold Total Bought
  4. 4. Page 4 of 5 TECHNICAL ANALYSIS OF THE QE INDEX Source: Bloomberg The QE Index ended the week on a strong note registering gains on every single trading session and closing at a new 52-week high. The index touched an intra-day high of 11,998.03, but slipped marginally to close the week at 11,983.87. The index started the week on a bullish note and was further boosted by the government‟s record budget announcement. As a result, the index posted its highest single day gain on Tuesday, surpassing the important psychological levels of 11,800 and 11,900 in a single swoop. The index has been tagging higher highs and higher lows over the past many months, and the new 52-week high has reinforced our bullish view. We believe the index will face strong resistance at the 12,000 level, but once it crosses that level, resistance may be seen near 12,100. On the flip side, if the index is unable to breach the 12,000 level and slips, support will be seen near 11,917. Meanwhile, the RSI and the MACD continue to indicate a bullish trend. DEFINITIONS OF KEY TERMS USED IN TECHNICAL ANALYSIS RSI (Relative Strength Index) indicator – RSI is a momentum oscillator that measures the speed and change of price movements. The RSI oscillates between 0 to 100. The index is deemed to be overbought once the RSI approaches the 70 level, indicating that a correction is likely. On the other hand, if the RSI approaches 30, it is an indication that the index may be getting oversold and therefore likely to bounce back. MACD (Moving Average Convergence Divergence) indicator – The indicator consists of the MACD line and a signal line. The divergence or the convergence of the MACD line with the signal line indicates the strength in the momentum during the uptrend or downtrend, as the case may be. When the MACD crosses the signal line from below and trades above it, it gives a positive indication. The reverse is the situation for a bearish trend. Candlestick chart – A candlestick chart is a price chart that displays the high, low, open, and close for a security. The „body‟ of the chart is portion between the open and close price, while the high and low intraday movements form the „shadow‟. The candlestick may represent any time frame. We use a one-day candlestick chart (every candlestick represents one trading day) in our analysis. Doji candlestick pattern – A Doji candlestick is formed when a security's open and close are practically equal. The pattern indicates indecisiveness, and based on preceding price actions and future confirmation, may indicate a bullish or bearish trend reversal. Shooting Star/Inverted Hammer candlestick patterns – These candlestick patterns have a small real body (open price and close price are near to each other), and a long upper shadow (large intraday movement on the upside). The Shooting Star is a bearish reversal pattern that forms after a rally. The Inverted Hammer looks exactly like a Shooting Star, but forms after a downtrend. Inverted Hammers represent a potential bullish trend reversal.
  5. 5. Contacts Saugata Sarkar Keith Whitney Sahbi Kasraoui Head of Research Head of Sales Manager - HNWI Tel: (+974) 4476 6534 Tel: (+974) 4476 6533 Tel: (+974) 4476 6544 QNB Financial Services SPC Contact Center: (+974) 4476 6666 PO Box 24025, Doha, Qatar DISCLAIMER: This publication has been prepared by QNB Financial Services SPC (“QNBFS”) a wholly-owned subsidiary of Qatar National Bank (“QNB”). QNBFS is regulated by the Qatar Financial Markets Authority and the Qatar Exchange; QNB 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. 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. While this publication has been prepared with the utmost degree of care by our analysts, QNBFS does not make any representations warranties as to the accuracy and completeness of the information it may contain, and declines any liability in that respect. 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. COPYRIGHT: No part of this document may be reproduced without the explicit written permission of QNBFS. Page 5 of 5 Source: Bloomberg Company Name Price (April 03) % Change 5- Day % Change YTD Market Cap. QR Million TTM P/E P/B Div. Yield Qatar National Bank 194.50 7.16 13.08 136,097 14.4 2.6 3.6 Qatar Islamic Bank 75.50 1.34 9.42 17,840 13.4 1.5 5.3 Commercial Bank of Qatar 65.70 4.62 11.36 19,509 12.2 1.2 2.5 Doha Bank 59.80 (1.81) 2.75 15,451 10.4 1.4 7.5 Al Ahli Bank 51.30 1.58 21.25 8,475 16.1 2.4 N/A Qatar International Islamic Bank 75.30 5.46 22.04 11,398 15.2 2.1 5.0 Masraf Al Rayan 41.35 7.12 32.11 31,013 18.2 2.9 3.6 Al Khaliji Bank 22.76 5.86 13.86 8,194 14.9 1.5 4.4 National Leasing 30.35 3.94 0.66 1,502 17.2 1.2 4.9 Dlala Holding 23.71 3.09 7.29 526 N/M 2.3 N/A Qatar & Oman Investment 13.46 14.46 7.51 424 21.4 1.3 4.5 Islamic Holding Group 77.60 7.03 68.70 310 34.3 5.3 2.2 Banking and Financial Services 250,738 Zad Holding 71.90 0.84 3.45 941 9.5 0.7 5.6 Qatar German Co. for Medical Devices 13.00 (2.77) (6.14) 150 N/M 0.8 N/A Salam International Investment 12.30 2.93 (5.46) 1,406 12.4 0.8 8.1 Medicare Group 74.50 7.97 41.90 2,097 34.1 2.7 2.4 Qatar Cinema & Film Distribution 42.00 (2.21) 4.74 240 32.1 1.7 4.8 Qatar Fuel 249.00 1.01 13.94 21,030 17.3 3.3 3.1 Qatar Meat and Livestock 50.60 10.12 (2.13) 911 16.6 3.6 4.2 Al Meera Consumer Goods 162.20 7.42 21.68 3,244 15.7 2.4 4.9 Consumer Goods and Services 30,018 Qatar Industrial Manufacturing 43.80 1.86 3.87 2,081 10.3 1.5 5.7 Qatar National Cement 130.00 8.97 9.24 6,383 14.6 2.5 4.6 Industries Qatar 186.40 1.86 10.36 112,772 14.1 3.3 5.9 Qatari Investors Group 55.80 1.09 27.69 6,937 31.4 3.2 1.3 Qatar Electricity and Water 177.50 4.11 7.34 19,525 14.1 3.2 3.8 Mannai Corp. 92.00 2.22 2.34 4,197 9.5 1.9 6.0 Aamal 15.00 0.13 0.00 9,000 17.8 1.3 N/A Gulf International Services 87.10 12.53 78.48 16,187 23.9 5.2 1.8 Mesaieed Petrochemical Holding 36.05 (2.44) N/A 45,290 N/A N/A N/A Industrials 222,373 Qatar Insurance 67.00 5.51 25.94 10,756 13.2 2.1 3.0 Doha Insurance 23.40 1.52 (6.40) 602 9.0 1.1 8.6 Qatar General Insurance & Reinsurance 40.00 (4.53) 0.21 2,767 1.3 0.6 3.1 Al Khaleej Takaful Insurance 33.90 4.47 20.74 753 11.4 1.3 1.9 Qatar Islamic Insurance 63.90 2.24 10.36 959 15.1 3.5 5.9 Insurance 15,837 United Development 20.95 2.29 (2.71) 7,418 23.0 0.7 4.5 Barwa Real Estate 37.75 4.14 26.68 14,689 12.5 1.1 4.0 Ezdan Real Estate 17.00 6.65 0.00 45,092 N/M 1.6 1.8 Mazaya Qatar Real Estate Development 15.20 10.55 35.96 1,520 11.4 1.3 3.9 Real Estate 68,720 Qatar Telecom 141.90 2.09 3.43 45,453 17.6 1.8 2.8 Vodafone Qatar 12.94 7.83 20.82 10,939 N/M 1.8 N/A Telecoms 56,393 Qatar Navigation (Milaha) 93.40 2.98 12.53 10,697 11.2 0.8 5.4 Gulf Warehousing 45.00 8.17 8.43 2,140 21.1 2.7 3.3 Qatar Gas Transport (Nakilat) 20.62 2.59 1.83 11,547 15.6 2.6 5.3 Transportation 24,384 Qatar Exchange 668,463