Page 1 of 5
Market Review and Outlook QE Index and Volume
The Qatar Exchange (QE) Index gained 47.80 points, or 0.51%, dur...
Page 2 of 5
News
Economic News
 Qatar trade balance at QR31.3bn in May – According to the
data released by the Statistics...
Page 3 of 5
Qatar Exchange
Top 5 Gainers Top 5 Decliners
Source: Qatar Exchange (QE) Source: Qatar Exchange (QE)
Most Acti...
Page 4 of 5
TECHNICAL ANALYSIS OF THE QE INDEX
Source: Bloomberg
After threatening to break down on Monday, the QE Index r...
Contacts
Ahmed M. Shehada Keith Whitney Saugata Sarkar Sahbi Kasraoui
Head of Trading Head of Sales Head of Research Manag...
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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 47.80 points, or 0.51%, during the week, to close at 9,419.97 points. Market capitalization rose by 0.38% to reach QR517.4 billion (bn) as compared to QR515.4bn at the end of the previous week. Of the 42 listed companies, 19 companies ended the week higher, 17 fell and 6 remained unchanged. Ooredoo (ORDS) was the best performing stock with a gain of 4.62%; the stock is up 21.83% year-to-date (YTD). Qatar Electricity & Water Co. (QEWS) was the top decliner, down 3.76%; the stock is still up 17.82% YTD. According to QE CEO Rashid Bin Ali Al Mansoori, the recent Morgan Stanley Capital International (MSCI) upgrade of the Qatari equity market to an Emerging Markets (EM) status will attract QR3bn to the QE. We believe this is a long-term positive for the market and according to the data available it seems like the MSCI Qatar Index will have a provisional weight of 0.49% in the MSCI EM Index. A total of 9 stocks will be included in this index, led by the QNB Group (QNBK) with a provisional closing weight of 21.68% in the MSCI Qatar Index. Further, the provisional closing weight for Industries Qatar (IQCD) has been set at 18.59%, Masraf Al Rayan‟s (MARK) at 16.48%, Ooredoo‟s (ORDS) at 15.78%, Qatar Electricity & Water Company‟s (QEWS) at 6.44%, Commercial Bank of Qatar‟s (CBQK) at 5.68%, Qatar Islamic Bank‟s (QIBK) at 5.53%, Doha Bank‟s (DHBK) at 4.94% and Vodafone Qatar‟s (VFQS) at 4.87%. The June quarter earnings season got off to a strong start with the QNB Group (QNBK) posting solid results. QNBK reported a net profit of QR4.7bn in first half 2013 (1H2013), representing an increase of 15.1% year-on-year (YoY). Earnings per share stood at QR6.8 in 1H2013 as compared to QR5.9 in 1H2012. Total assets rose 30.4% YoY to QR431bn in 1H2013, while loans & advances rose 26.3% YoY to QR296bn. Customer deposits increased by 32.7% to QR326bn. This led to the group‟s loan-to- deposit ratio to stand at 91%. The ratio of non-performing loans to gross loans has been maintained at 1.5%. The 1H2013 results include that of NSGB in Egypt as well, in which the group had acquired a controlling stake of 97.12% during the first quarter of 2013. Going forward, we expect June quarter results to act as a catalyst for the market. For detailed analysis and estimates, investors should refer to our report (QNBFS Second Quarter 2013 Earnings Preview, published on July 07, 2013). Trading value during the week decreased by 20.46% to reach QR773.3 million (mn), as compared to QR972.2mn in the prior week. The Banks & Financial Services sector led the trading value during the week, accounting for 32.06% of the total equity trading value. Trading volume increased by 3.41% to reach 20.2mn shares, as against 19.5mn shares in the prior week. The number of transactions fell by 6.88% to reach 11,525 transactions versus 12,377 transactions in the prior week. The Banks & Financial Services sector led the trading volume, accounting for 25.34% of the total volume. Foreign institutions turned bullish for the week with overall net buying of QR38.0mn (including T-bills) versus net selling QR70.1mn (including T-bills) in the prior week. Market Indicators Week ended July 11, 2013 Week ended July 04, 2013 Chg. % Value Traded (QR mn) 773.3 972.2 (20.5) Exch. Market Cap. (QR mn) 517,399.3 515,421.9 0.4 Volume (mn) 20.2 19.5 3.4 Number of Transactions 11,525 12,377 (6.9) Companies Traded 42 41 2.4 Market Breadth 19:17 24:16 – Market Indices Close WTD% MTD% YTD% Total Return 13,458.97 0.5 1.6 19.0 All Share Index 2,380.53 0.4 1.3 18.2 Banks/Financial Svcs. 2,275.15 (0.1) 1.7 16.7 Industrials 3,130.94 0.6 1.0 19.2 Transportation 1,675.72 (1.4) 0.5 25.0 Real Estate 1,843.91 1.1 (0.1) 14.4 Insurance 2,225.72 0.6 (0.3) 13.4 Telecoms 1,327.72 4.2 4.3 24.7 Consumer 5,517.37 0.1 0.4 18.1 Al Rayan Islamic Index 2,817.81 0.7 0.6 13.2 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)* 9,419.97 0.5 1.6 12.7 253.68 142,077.9 11.8 1.7 4.9 Dubai 2,391.63 5.6 7.6 47.4 443.12 61,098.97 15.4 1.0 3.4 Abu Dhabi 3,705.65 4.0 4.3 40.9 449.42 106,585.4 11.1 1.4 4.7 Saudi Arabia 7,690.38 0.3 2.8 13.3 5,136.12 409,973.1# 16.3 2.0 3.6 Kuwait 7,882.32 (1.0) 1.4 32.8 486.73 108,355.2 22.2 1.3 3.6 Oman 6,490.67 0.8 2.4 12.7 62.53 22,614.0 10.7 1.7 4.2 Bahrain 1,189.82 (0.1) 0.2 11.7 4.81 21,249.7 8.7 0.8 4.1 Source: Bloomberg, country exchanges and Zawya (** Trailing Twelve Months; * Value traded ($ mn) do not include special trades, if any) ( # Data as of July 10, 2013) 9,363.13 9,282.88 9,309.63 9,332.89 9,419.97 0 3,000,000 6,000,000 9,200 9,325 9,450 7-Jul 8-Jul 9-Jul 10-Jul 11-Jul Volume QE Index 5.6% 4.0% 0.8% 0.5% 0.3% (0.1%) (1.0%)(2.0%) 0.0% 2.0% 4.0% 6.0% Dubai AbuDhabi Oman Qatar SaudiArabia Bahrain Kuwait
  2. 2. Page 2 of 5 News Economic News  Qatar trade balance at QR31.3bn in May – According to the data released by the Statistics Authority, Qatar posted a trade balance of QR31.3bn in May, up 0.5% YoY backed by higher revenue from exports. Total exports in May stood at QR39.6bn and imports were QR8.3bn. Total exports rose in May despite a drop in exports of some hydrocarbon commodities. The data also showed that Japan topped among the export destinations in May and accounted for 29% of Qatar‟s exports, followed by South Korea (16%) and India (10%). The data also revealed that among Qatar‟s major import items in May were motor cars, other vehicles and aircraft spares. The US was the biggest exporter to Qatar in May (15%), followed by China (10%) and the UAE (7%). (Gulf-Times.com) Market & Corporate News  QNB Group’s 1H2013 net profit rises by 15.1% YoY – The QNB Group has reported a net profit of QR4.7bn in 1H2013, representing an increase of 15.1% YoY. Earnings per share stood at QR6.8 in 1H2013 as compared to QR5.9 in 1H2012. Total assets rose 30.4% YoY to QR431bn in 1H2013, while loans & advances rose 26.3% YoY to QR296bn. Customer deposits increased by 32.7% to QR326bn. This led to the group‟s loan-to-deposit ratio to stand at 91%. The ratio of non- performing loans to gross loans has been maintained at 1.5%. Meanwhile, the group‟s conservative policy on provisioning continued with the coverage ratio reaching 118% in June 2013. The total equity rose by 10.3% from June 2012 to reach QR49bn as on June 30, 2013. The 1H2013 results include that of NSGB in Egypt as well, in which the group had acquired a controlling stake of 97.12% during the first quarter of 2013. (QNB Press Release)  QNB Group’s Indian subsidiary to commence in 3Q2013 – The QNB Group said its fully-owned subsidiary in India will commence operations in 3Q2013, as it seeks to expand its presence and take on competition in leading markets. Further, the group said that it has received all regulatory approvals to open a representative office in China as well. (Gulf-Times.com)  QNB Group announces HE Ali Shareef Al-Emadi as its BoD chairman – The QNB Group announced that HE Minister of Finance Ali Shareef Al-Emadi has been appointed as the Chairman of its Board of Directors. (QE)  QNB Group appoints new Acting Group CEO – The QNB Group‟s Board of Directors has appointed Mr. Ali Ahmed Al Kuwari as its new Acting CEO for the Group. Mr. Ali Al Kuwari enjoys over 25 years of extensive experience in all aspects of Business: Strategic Planning, Sales & Marketing, Finance, Operations, Credit, Human Resources Development, Information Systems, Systems Analysis and Design, Programming, Business & Customer Partnership, and Business & Product Development. He has held several executive positions with QNB, where he occupied the post of Executive General Manager – Chief Business Officer with responsibility for Corporate, Retail, Assets & Wealth Management, Treasury and International Divisions. (QNB Press Release)  MSCI seeks to limit potential reverse turnover for Qatar, UAE – Morgan Stanley Capital International (MSCI) has intended not to implement any changes in MSCI Qatar, MSCI UAE indices as part of regular index reviews preceding their reclassification to emerging markets status. MSCI also intends to implement only deletions from MSCI Qatar, MSCI UAE caused by either low foreign room, low liquidity or prolonged suspension. Moreover, MSCI intends to defer implementation of corporate events not requiring price adjustment factor such as placements, block sales, recapitalizations and sizable IPOs, and to exceptionally freeze potential migrations due to corporate events until the May 2014 semi-annual index review. MSCI intends to continue implementing corporate events that require price adjustment factors such as stock splits and consolidations, as well as deletions resulting from delistings, bankruptcies and M&As at the time of the event. (Bloomberg)  MSCI Qatar Index assigns provisional weight on Qatari firms – MSCI said the QNB Group‟s (QNBK) provisional closing weight is set at 21.68% in the MSCI Qatar Index. Further, the provisional closing weight for Industries Qatar (IQCD) has been set at 18.59%, Masraf Al Rayan‟s (MARK) at 16.48%, Ooredoo‟s (ORDS) at 15.78%, Qatar Electricity & Water Company‟s (QEWS) at 6.44%, Commercial Bank of Qatar‟s (CBQK) at 5.68%, Qatar Islamic Bank‟s (QIBK) at 5.53%, Doha Bank‟s (DHBK) at 4.94% and Vodafone Qatar‟s (VFQS) at 4.87%. The list of Qatari stocks expected to be included in the index falls right in line with our expectations. (Bloomberg, QNBFS Research)  QE CEO: MSCI upgrade will attract QR3bn to QE – The Qatar Exchange‟s (QE) CEO Rashid Bin Ali Al Mansoori said the recent MSCI upgrade of the Qatar market to an Emerging- Markets status will attract QR3bn to QE. (Bloomberg)  Ooredoo to spend $15bn on Myanmar phone network – Ooredoo‟s Business Development & Strategy Director Nicholas Swierzy said the company is planning to spend $15bn in Myanmar to expand the nation‟s mobile-phone network. He added that the company is planning to use local partners for distribution. This amount is likely to be spent over the 15-year duration of the license. (Bloomberg)  QTEL changed to ORDS – According to the Qatar Exchange, effective Wednesday 10 July 2013, Qatar Telecom (QTEL) will be renamed Ooredoo (ORDS). (QE)  Oxy Qatar signs QR273mn deal with GDI for drilling services – Occidental Petroleum of Qatar (Oxy Qatar) has signed a contract worth QR273mn with Gulf Drilling International (GDI) to provide drilling services through the continued use of „Al Rayyan‟ rig. This contract is for a two-year period until March 2015. Oxy Qatar is continuing its use of two drilling rigs, „Al Rayyan‟ and „Al Wajba‟ for its extensive development programs in the Idd Al Shargi and Al Rayyan fields. (Gulf-Times.com)  Qatar plans to spin off QP – According to Reuters, Qatar plans to spin-off Qatar Petroleum (QP) from the Energy Ministry to allow it to grow more quickly abroad at a time of rising rivalry from new producers. Industry sources say Qatar believes that the spinoff will speed up decision making. (Reuters)  IHGS collects 93% of its paid-up capital – Islamic Holding Group (IHGS) announced the results of collecting the remaining 25% portion of the company's paid-up capital. The company has so far collected payment for 3.7mn shares from a total of 4mn shares. (QE)  QE announces Ramadan business hours – The Qatar Exchange (QE) announced that its official business hours during the holy month of Ramadan will be from 8.30am to 1.30pm, Sunday through Thursday. However, the trading hours will remain unchanged, from 9.30am to 1.15pm. The pre- opening session will begin at 9am and end at 9.30am. Settlement and DvP service timings will also remain unchanged. (QE)
  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) 4.6% 3.0% 2.8% 2.1% 2.0% 0.0% 2.0% 4.0% 6.0% Ooredoo Qatari Investors Group Barwa Real Estate Dlala Holding Industries Qatar -3.8% -3.4% -2.8% -2.0% -1.9% -4.5% -3.0% -1.5% 0.0% Qatar Electricity and Water Mannai Corp. Qatar & Oman Investment Medicare Group Milaha 162.3 82.4 65.3 46.0 42.6 0.0 60.0 120.0 180.0 Industries Qatar QNB Group Barwa Real Estate Masraf Al Rayan Qatar Gas Transport (Nakilat) 2.5 2.4 2.3 2.2 1.8 0.0 1.0 2.0 3.0 Vodafone Qatar Barwa Real Estate Qatar Gas Transport (Nakilat) Salam International Investment United Development 0% 20% 40% 60% 80% 100% Buy Sell 37.92% 42.58% 20.43% 19.73% 14.72% 15.68% 26.94% 22.02% Qatari Individuals Qatari Institutions Non-Qatari Individuals Non-Qatari Institutions 451 322 482 292 (31) 31 (100) - 100 200 300 400 500 600 Qatari Non-Qatari Net Investment Total Sold Total Bought
  4. 4. Page 4 of 5 TECHNICAL ANALYSIS OF THE QE INDEX Source: Bloomberg After threatening to break down on Monday, the QE Index reversed and posted strong gains on Thursday to close near its intraday high for the week. There was a positive development in the week, as the index breached the 9,400.0 psychological level and made further headway on the back of relatively large volumes, signifying strength. We believe the index may trend higher and move upward to its next resistance near the 9,450.0 level. This level may be a crucial level for traders to watch out for as the past two attempts to breach this level failed. However, if the index is able to breach above the 9,450.0 level, it could spark additional buying interest and a possible upward move toward 9,500.0. The next upside target if this level is surpassed is 9,600.0. Moreover, the RSI has given a bullish divergence and has enough room before getting overbought, while the MACD is about to cross the signal line into the positive territory. On the flip side, if the index penetrates below the 9,400.0 level, it could prompt further weakness and cause the index to test the 9,300.0 level. 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 Ahmed M. Shehada Keith Whitney Saugata Sarkar Sahbi Kasraoui Head of Trading Head of Sales Head of Research Manager - HNWI Tel: (+974) 4476 6535 Tel: (+974) 4476 6533 Tel: (+974) 4476 6534 Tel: (+974) 4476 6544 ahmed.shehada@qnbfs.com.qa keith.whitney@qnbfs.com.qa saugata.sarkar@qnbfs.com.qa sahbi.alkasraoui@qnbfs.com.qa 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 (July 11) % Change 5- Day % Change Monthly Market Cap. QR Million TTM P/E P/B Div. Yield Qatar National Bank 161.50 (0.62) 2.60 113,006 12.6 2.4 3.7 Qatar Islamic Bank 68.90 0.58 1.17 16,281 14.3 1.5 5.4 Commercial Bank of Qatar 71.40 0.71 2.44 17,668 8.6 1.3 8.4 Doha Bank 48.05 1.59 2.45 12,415 8.2 1.2 8.6 Al Ahli Bank 55.00 (0.36) (3.51) 6,989 13.4 2.2 5.5 Qatar International Islamic Bank 53.70 (0.56) (0.37) 8,129 11.8 1.7 6.5 Masraf Al Rayan 27.75 0.00 0.54 20,813 13.4 2.3 3.6 Al Khaliji Bank 16.77 (0.77) (0.77) 6,037 11.6 1.1 6.0 National Leasing 36.95 (0.40) (0.40) 1,828 8.9 1.4 5.4 Dlala Holding 27.15 2.07 1.50 603 23.5 2.6 N/M Qatar & Oman Investment 13.32 (2.77) (2.70) 420 21.3 1.4 3.8 Islamic Holding Group 43.40 0.00 0.70 174 27.9 4.2 2.6 Banking and Financial Services 204,361 Zad Holding 60.00 0.00 0.67 785 7.4 0.6 6.7 Qatar German Co. for Medical Devices 16.00 0.57 (0.44) 185 N/A 1.0 N/M Salam International Investment 13.02 0.15 0.15 1,488 21.9 0.9 5.4 Medicare Group 42.70 (1.95) 0.95 1,202 26.0 1.5 4.2 Qatar Cinema & Film Distribution 55.00 (0.72) 0.00 314 27.5 2.4 3.6 Qatar Fuel 254.80 0.35 0.71 16,554 14.4 3.1 3.9 Qatar Meat and Livestock 63.30 0.16 (0.16) 1,139 15.1 3.9 6.3 Al Meera Consumer Goods 135.00 (0.15) (1.17) 2,700 17.5 2.3 5.9 Consumer Goods and Services 24,367 Qatar Industrial Manufacturing 52.00 1.17 (3.70) 2,059 10.5 1.7 5.8 Qatar National Cement 100.50 0.40 (3.37) 4,935 11.6 2.2 6.0 Industries Qatar 161.40 1.96 2.41 97,647 10.8 3.5 4.8 Qatari Investors Group 27.80 2.96 3.54 3,456 20.2 1.7 2.7 Qatar Electricity and Water 156.00 (3.76) (1.83) 15,600 11.6 3.2 4.7 Mannai Corp. 86.00 (3.37) (2.27) 3,923 8.3 1.8 5.5 Aamal 14.35 0.07 (0.42) 8,610 14.0 1.3 N/M Gulf International Services 41.85 0.00 1.82 6,222 12.2 2.4 3.6 Industrials 142,452 Qatar Insurance 60.80 1.00 (0.33) 7,809 9.8 1.4 3.3 Doha Insurance 26.00 0.39 1.76 669 11.1 1.4 3.5 Qatar General Insurance & Reinsurance 46.60 0.00 0.00 2,686 14.7 1.0 1.9 Al Khaleej Takaful Insurance 43.90 (0.23) (1.35) 750 10.1 1.3 1.9 Qatar Islamic Insurance 60.90 (0.81) (2.09) 914 15.5 3.8 5.7 Insurance 12,827 United Development 22.00 (1.12) (4.35) 7,419 9.3 0.7 4.5 Barwa Real Estate 27.35 2.82 3.01 10,643 13.0 0.8 5.5 Ezdan Real Estate 17.09 (1.78) (2.29) 45,331 N/M 1.6 0.8 Mazaya Qatar Real Estate Development 11.41 0.53 0.80 1,141 20.9 1.1 5.3 Real Estate 64,534 Qatar Telecom 126.70 4.62 4.88 40,585 12.8 1.6 3.9 Vodafone Qatar 9.14 1.56 0.44 7,727 N/A 1.3 N/M Telecoms 48,312 Qatar Navigation (Milaha) 71.60 (1.92) (0.56) 8,200 9.1 0.8 5.2 Gulf Warehousing 42.00 0.00 2.07 1,998 22.9 2.7 N/M Qatar Gas Transport (Nakilat) 18.48 (1.28) 0.98 10,349 13.4 6.0 5.4 Transportation 20,546 Qatar Exchange 517,399

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