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 declined 462.13 points, or 3.37%, during the trading week, to close at 13,232.06 points. Market capitalization decreased by 2.51% to reach QR718.4 billion (bn) as compared to QR736.9bn at the end of the previous week. Of the 43 listed companies, 16 companies ended the week higher, while 26 fell and 1 remained unchanged. Dlala Holding (DBIS) was the best performing stock for the week, with a gain of 16.55% on 4.6 million (mn) shares traded. On the other hand, Qatar National Cement (QNCD) was the worst performing stock, with a decline of 12.60% on only 0.3mn shares traded. Masraf Al Rayan (MARK) and Qatar Islamic Bank (QIBK) were the biggest contributors to the weekly index decline. MARK declined by 9.30% during the week shaving 183.13 points off the index’s weekly decline. However, despite the recent decline, the stock has been one of the best performing stocks in 2014 year-to-date (YTD) with a price return of 90.10% versus the QE Index which is up 27.48%. The decline was expected as the stock had rallied on the MSCI EM Index upgrade (the highest weight in MSCI EM Index within Qatari stocks). QIBK was the second biggest contributor reducing the index by 83.47 points. QIBK is also up 43.77% YTD in 2014. On the other hand within the QE Index, Nakilat (QGTS) and Milaha (QNNS) were the only two stocks closing in positive territory during the week. QGTS contributed 26.36 points to the QE Index. The stock has had a decent run in 2014 posting a price return of 18.52%. QNNS also contributed 12.53 points to the index during the week. QNNS is up 10.84% YTD in 2014. Trading value during the week decreased by 30.33% to reach QR7.3bn vs. QR10.5bn in the prior week. The Banks & Financial Services sector led the trading value during the week, accounting for 45.05% of the total equity trading value. MARK was the top value traded stock during the week with total traded value of QR1.48bn. Trading volume decreased by 16.49% to reach 163.7mn shares vs. 196.0mn shares in the prior week. The number of transactions declined by 18.31% to reach 62,244 transactions versus 76,199 transactions in the prior week. The Banks & Financial Services sector also led the trading volume, accounting for 32.66%. Vodafone Qatar (VFQS) was the top volume traded stock during the week with total traded volume of 27.80mn shares. Foreign institutions continued on buying during the week with net buying of QR248.6mn vs. net buying of QR2.2bn in the prior week. Qatari institutions remained bearish with net selling of QR234.0mn vs. net selling of QR1.3bn the week before. Foreign retail investors turned bullish for the week with net buying of QR19.0mn vs. net selling of QR221.8mn in the prior week. Qatari retail investors remained bearish with net selling of QR33.5mn vs. net selling of QR657.2mn the week before. Thus far in 2014, the QE has already witnessed net foreign portfolio investment inflow of ~$2.0bn. Market Indicators Week ended June 05, 2014 Week ended May 29, 2014 Chg. % Value Traded (QR mn) 7,290.7 10,464.5 (30.3) Exch. Market Cap. (QR mn) 718,366.0 736,878.6 (2.5) Volume (mn) 163.7 196.0 (16.5) Number of Transactions 62,244 76,199 (18.3) Companies Traded 43 43 0.0 Market Breadth 16:26 27:15 – Market Indices Close WTD% MTD% YTD% Total Return 19,731.85 (3.4) (3.4) 33.1 All Share Index 3,332.54 (2.7) (2.7) 28.8 Banks/Financial Svcs. 3,229.25 (4.3) (4.3) 32.1 Industrials 4,318.01 (3.8) (3.8) 23.4 Transportation 2,286.49 4.0 4.0 23.0 Real Estate 2,799.09 (1.5) (1.5) 43.3 Insurance 3,336.47 (0.6) (0.6) 42.8 Telecoms 1,844.15 (0.8) (0.8) 26.9 Consumer 6,951.98 3.8 3.8 16.9 Al Rayan Islamic Index 4,452.06 (4.0) (4.0) 46.6 Market Indices Weekly Index Performance Regional Indices Close WTD% MTD% YTD% Weekly Exchange Traded Value ($ mn) Exchange Mkt. Cap. ($ mn) TTM P/E** P/B** Dividend Yield Qatar (QE)* 13,232.06 (3.4) (3.4) 27.5 2,429.00 197,335.1 16.5 2.2 3.8 Dubai 5,100.68 0.3 0.3 51.4 2,554.19 95,922.0 20.5 2.0 2.0 Abu Dhabi 5,055.42 (3.8) (3.8) 17.8 1,123.77 140,396.5 14.9 1.9 3.3 Saudi Arabia 9,860.41 1.1 2.9 15.5 12,177.68 532,860.5# 20.1 2.5 2.9 Kuwait 7,337.37 0.6 0.6 (2.8) 428.35 114,666.3 15.4 1.2 3.8 Oman 6,953.89 1.4 1.4 1.7 124.66 25,240.4 12.8 1.7 3.8 Bahrain 1,461.55 0.2 0.2 17.0 10.87 53,942.3 10.5 1.0 4.7 Source: Bloomberg, country exchanges and Zawya (** Trailing Twelve Months; * Value traded ($ mn) do not include special trades, if any) (#Data as of June 05, 2014) 13,696.98 13,551.18 13,221.29 13,142.69 13,232.06 0 22,500,000 45,000,000 12,800 13,300 13,800 1-Jun 2-Jun 3-Jun 4-Jun 5-Jun Volume QE Index 1.4% 0.6% 0.3% 0.3% 0.2% (3.4%) (3.8%) (8.0%) (4.0%) 0.0% 4.0% Oman Kuwait Dubai SaudiArabia Bahrain Qatar(QE)* AbuDhabi
  2. 2. Page 2 of 5 News Economic News  QCB auctions T-bills worth QR4bn – The Qatar Central Bank (QCB) auctioned treasury bills worth QR4bn on June 3, 2014, for which it received bids totaling QR12.665bn. T-bills worth QR2bn with a maturity period of three months were auctioned at a yield of 0.68%. T-bills with six-month maturity worth QR1bn were sold at 0.85% yield, while T-bills with nine-month maturity worth QR1bn were auctioned at 0.90% yield. (QCB)  Cabinet approves draft law on financial system – The Qatari Cabinet approved a draft law on the financial system of the state, which aims at optimizing the use of public funds and to keep abreast with global best practices in public business. The cabinet also approved a draft decision to establish tenders & bidding committee at the Foreign Ministry, which will undertake the functions of the central & local tenders committee as stipulated in the tenders & biddings related law. The cabinet also approved the application of the provisions of Law No 24 of 2002 concerning retirements and pensions of Qatari employees working with Qatar Jet Fuel Company and Woqod Vehicles Inspection. (Gulf-Times.com)  QE to introduce measures to enhance operational efficiency – The Qatar Exchange (QE) is all geared up to introduce securities lending and borrowing, margin trading, omnibus accounts and a central counterparty (CCP) as part of its measures to further enhance the operational efficiency and attractiveness to foreign investors. The introduction of omnibus account indicates the QE’s readiness in introducing derivatives, which are expected to come once CCP is in place. QE’s CEO Rashid bin Ali al-Mansoori said that the Morgan Stanley Composite Index (MSCI) reclassification process highlighted a number of issues that had been addressed by the exchange and other authorities in order to raise the market efficiency. (Gulf-Times.com) Market & Corporate News  Moody's maintains stable outlook on Qatari banking system – According to a report by Moody's Investors Service, the outlook for Qatar's banking system remains stable, unchanged since 2010. The outlook reflects Moody's expectation that the country’s strong economic environment will continue to sustain Qatari banks' robust financial metrics – primarily strong earnings, sound capital buffers and low levels of non-performing loans (NPLs). However, these strengths will remain moderated by risks associated with Qatar's reliance on the hydrocarbon sector, the banks' relatively high dependence on short-term foreign funding and the country's still-developing corporate-governance and risk-management culture. Moody's forecasts real GDP growth of 6% in 2014 driven by elevated public spending. This spending will translate into 11% growth in the non-hydrocarbon sector, offsetting flat LNG output and leading to domestic credit growth of 15-20%. Moody's expects the banking system's NPLs to remain at around 1.5-2% of gross loans over the next 12-18 months, owing to the strong operating environment, evolving prudential regulation and the sizeable proportion of government-related loans (accounting for 42% of the total loan book). Moody's also expects the banks to maintain healthy capital levels with system's Tier 1 capital ratio in the 14-16% range over the outlook horizon. Moody's expects that Qatari banks will maintain sound liquidity buffers (liquid assets in the range of 25-30% of total assets) and a high level of stable yet concentrated government-related deposits (42% of total deposits) over the outlook horizon. Despite margin compression, Moody's expects bottom-line profitability metrics to remain broadly stable, supported by higher lending volumes, a low cost base and low provisioning requirements. In addition, Moody's expects system's cost-to-income ratio to remain in the historical range of 25-30%, the lowest among the GCC countries. (GulfBase.com)  ERES: Qatar’s real estate deals up 85% – According to an Ezdan weekly report, Qatar’s real estate market remained firm as transactions jumped 85% to QR1,409.2mn last week. Last week also witnessed an exceptional QR180mn deal for a residential building in Umm Ghuwelina. Doha Municipality witnessed the largest number of transactions implemented, with 47 deals garnering 23.9% of total transactions. Al Daayan Municipality saw 39 transactions representing 67.2% of total deals as compared to 32.8% of other real estate across all areas. The report predicted that property transactions will experience a rise in the coming weeks, especially in the land sector, noting that investors and real estate developers are seeking new real estate projects. (Peninsula Qatar)  Nakilat takes over 1st LNG vessel as ‘owner operator’ – Nakilat has taken over the operations of the first of the four liquefied natural gas (LNG) vessels as part of its strategic move to be the owner and operator of the fleet. Its fully-owned subsidiary, Nakilat Shipping (Qatar) took over the operations of a Q-Flex vessel ‘Al Hamla’ from OSG Ship Management, UK. Al Hamla, owned 50.1% by Nakilat and 49.9% by OSG, has a cargo capacity of 216,000 cubic meters. Built in South Korea by Samsung Heavy Industries, Al Hamla is in active service for charterer Qatargas II and has delivered 45 cargoes across the world. (Gulf-Times.com)  QNNS takes delivery of dive support vessel – Halul Offshore Services Company (HOSC) and its parent company, Qatar Navigation (QNNS), have taken delivery of their newest state- of-the-art dive support vessel, Shaddad. Built in India by ABG Shipyard, the vessel is equipped with the latest diving equipment that qualifies it to undertake subsea maintenance with saturated diving capability up to 300 meters depth, as well as air diving and remotely operated vehicles operations. The vessel has been contracted by Halul to Qatar Petroleum as part of a five-year diving services agreement. With the delivery of Shaddad, Halul’s fleet of offshore support vessels has increased to 36, with 7 more vessels scheduled for delivery in 2014. (QE)  MERS to set up JV with Regency Group Holding, Aramex Dubai – Al Meera Consumer Goods Company (MERS) has signed a formal MoU with Regency Group Holding and Aramex Regional, Dubai, to form a JV that facilitates the development of a logistics facility & services business in Qatar. To be known as ‘Aramex Logistics Qatar’, the JV will be part of MERS’ efforts to expand its brand offerings in the domestic market. In the initial stages, a distribution center would be set up south of Doha on a 91,000 square meter plot. The centre is to be built in phases, with the first stage witnessing a 20,000 square meter warehousing facility being developed, with plans to quadruple the warehouse in the future phases. (Gulf-Times.com)  UDCD announces change in management – The United Development Company’s (UDCD) board of directors has approved Badr Al Meer‘s request to end his mandate as UDCD’s Acting CEO effective from June 1, 2014. UDCD’s Chairman, Turki Al Khater, will temporarily undertake the duties of Managing Director, until a permanent CEO is appointed. (GulfBase.com)
  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) 16.6% 15.6% 9.9% 7.5% 5.3% 0.0% 6.0% 12.0% 18.0% Dlala Holding Salam International Investment Qatar & Oman Investment Al Khaleej Takaful Insurance Qatar Fuel -12.6% -9.7% -9.3% -6.4% -4.7% -15.0% -10.0% -5.0% 0.0% Qatar National Cement Qatar Islamic Bank Masraf Al Rayan Commercial Bank of Qatar Qatari Investors Group 1,484.9 597.4 469.6 466.1 405.0 0.0 500.0 1,000.0 1,500.0 Masraf Al Rayan Vodafone Qatar Barwa Real Estate QNB Group Industries Qatar 27.8 24.3 22.5 11.1 10.1 0.0 10.0 20.0 30.0 Vodafone Qatar Masraf Al Rayan Salam International Investment Barwa Real Estate Ezdan Real Estate 0% 20% 40% 60% 80% 100% Buy Sell 44.57% 45.03% 12.12% 15.33% 12.79% 12.53% 30.52% 27.11% Qatari Individuals Qatari Institutions Non-Qatari Individuals Non-Qatari Institutions 4,133 3,158 4,401 2,890 (268) 268 (1,000) - 1,000 2,000 3,000 4,000 5,000 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 in the red zone shedding around 462 points after a brief rally in the prior week. The index started the week moving marginally higher, but failed to make any further headway above 13,700.0 and subsequently witnessed sustained selling pressure. The index slipped below its important levels of 13,600.0, 13,450.0 and 13,350.0 and threatened to trigger a deeper fall on Wednesday as the bears were under full control. However, Thursday was a different day altogether as the index rebounded and witnessed a smart rally, trimming its losses with the bulls coming to the rescue. The index has done a time correction, which is good for it on a longer-term basis. We believe if the index can stay above the 13,196.0 level, which is also in proximity to the 21-day moving average; it could set the stage for a higher move toward 13,350.0, followed by 13,450.0. Any strength above this level may spark additional buying interest, which may push the index further higher toward 13,600.0. However, a retreat below 13,196.0 along the 21-day moving average may result in bearish implications, which may drag the index back toward the 13,000.0 level. Meanwhile, both the momentum indicators are providing mixed signals indicating the possibility of wild swings within a broad range. 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 Abdullah Amin, CFA Shahan Keushgerian Head of Research Senior Research Analyst Senior Research Analyst Tel: (+974) 4476 6534 Tel: (+974) 4476 6569 Tel: (+974) 4476 6509 saugata.sarkar@qnbfs.com.qa abdullah.amin@qnbfs.com.qa shahan.keushgerian@qnbfs.com.qa Sahbi Kasraoui Ahmed Al-Khoudary QNB Financial Services SPC Manager – HNWI Head of Sales Trading – Institutional Contact Center: (+974) 4476 6666 Tel: (+974) 4476 6544 Tel: (+974) 4476 6548 PO Box 24025 sahbi.alkasraoui@qnbfs.com.qa ahmed.alkhoudary@qnbfs.com.qa 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 Com pany Nam e Price (June 05) % Change 5-Day % Change YTD Market Cap. QR Million TTM P/E P/B Div. Yield Qatar National Bank 180.50 (0.82) 4.94 126,301 12.9 2.5 3.9 Qatar Islamic Bank 99.20 (9.74) 43.77 23,440 17.1 2.1 4.0 Commercial Bank of Qatar 67.20 (6.41) 13.90 19,954 12.2 1.3 2.5 Doha Bank 62.30 (1.11) 7.04 16,097 11.3 1.5 7.2 Al Ahli Bank 52.00 3.79 22.91 8,590 15.9 2.3 N/A Qatar International Islamic Bank 85.30 (2.18) 38.25 12,912 16.8 2.6 4.4 Masraf Al Rayan 59.50 (9.30) 90.10 44,625 25.7 4.5 2.5 Al Khaliji Bank 23.24 (1.53) 16.26 8,366 15.8 1.5 4.3 National Leasing 33.00 2.33 9.45 1,633 26.1 1.3 4.5 Dlala Holding 50.70 16.55 129.41 1,126 N/M 4.5 N/A Qatar & Oman Investment 15.59 9.94 24.52 491 22.5 1.5 3.8 Islamic Holding Group 76.10 3.40 65.43 304 30.8 5.2 2.2 Banking and Financial Services 263,839 Zad Holding 76.80 1.05 10.50 1,005 9.4 0.7 4.6 Qatar German Co. for Medical Devices 14.50 2.11 4.69 167 N/M 1.0 N/A Salam International Investment 16.64 15.56 27.90 1,902 14.8 1.1 6.0 Medicare Group 84.60 (2.98) 61.14 2,381 24.0 3.1 2.1 Qatar Cinema & Film Distribution 41.50 (0.24) 3.49 237 20.6 1.7 N/A Qatar Fuel 223.20 5.28 2.13 18,851 15.7 3.2 3.4 Qatar Meat and Livestock 59.60 (1.16) 15.28 1,073 20.0 4.3 3.5 Al Meera Consumer Goods 182.40 (1.94) 36.83 3,648 16.6 2.9 4.4 Consum er Goods and Services 29,264 Qatar Industrial Manufacturing 46.65 (1.79) 10.63 2,217 10.7 1.5 N/A Qatar National Cement 131.10 (12.60) 10.17 6,437 14.4 2.5 4.6 Industries Qatar 182.50 (3.34) 8.05 110,413 15.7 3.8 6.0 Qatari Investors Group 64.30 (4.74) 47.14 7,994 35.4 3.8 1.2 Qatar Electricity and Water 192.00 (4.00) 16.11 21,120 14.2 3.7 3.6 Mannai Corp. 113.10 (4.15) 25.81 5,160 10.2 2.9 4.9 Aamal 16.21 (2.35) 8.07 9,726 18.3 1.4 N/A Gulf International Services 91.00 (2.67) 86.48 16,912 23.2 5.7 1.8 Mesaieed Petrochemical Holding 33.90 (2.73) N/A 42,589 N/A 3.1 1.0 Industrials 222,567 Qatar Insurance 77.90 (1.77) 46.43 12,506 15.5 2.4 2.6 Doha Insurance 25.00 1.21 0.00 1,250 9.3 1.2 8.0 Qatar General Insurance & Reinsurance 43.95 0.34 10.10 3,040 1.4 0.6 2.8 Al Khaleej Takaful Insurance 42.20 7.52 50.30 937 12.7 1.4 N/A Qatar Islamic Insurance 74.00 2.35 27.81 1,110 17.5 4.0 5.1 Insurance 18,843 United Development 26.25 (0.76) 21.90 9,295 20.0 0.9 3.6 Barw a Real Estate 42.30 (2.08) 41.95 16,460 11.1 1.2 4.7 Ezdan Real Estate 23.70 (2.83) 39.41 62,864 50.4 2.1 1.3 Mazaya Qatar Real Estate Development 19.30 0.00 72.63 1,930 12.5 1.6 3.9 Real Estate 90,549 Qatar Telecom 153.50 (0.97) 11.88 49,169 18.8 1.9 2.6 Vodafone Qatar 20.75 (0.14) 93.74 17,542 N/M 3.0 N/A Telecom s 66,711 Qatar Navigation (Milaha) 92.00 3.37 10.84 10,536 11.0 0.8 5.4 Gulf Warehousing 55.00 0.18 32.53 2,616 23.8 3.4 2.7 Qatar Gas Transport (Nakilat) 24.00 5.26 18.52 13,440 17.5 3.7 4.6 Transportation 26,592 Qatar Exchange 718,366

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