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Mubasher20160601TheMonthly Chart book May

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Mubasher20160601TheMonthly Chart book May

  1. 1. For more information on MubasherTrade, please visit our website at www.MubasherTrade.com or contact us at Research@MubasherTrade.com. Please read the important disclosure and disclaimer at the end of this document. Page 1 The Monthly Chartbook Multi-Asset Classes | Global Wednesday, 1 June 2016 May 2016: Markets hitting the brakes THE BIG PICTURE • Macroeconomic Pulse • Mixed performance for global asset classes • Variation in commodities performance • Except for three, all MENA markets witnessed losses EGYPT • Budget deficit recorded 7.9% of GDP in Jul-Feb FY2015/16 • Majority of sectors performed badly in May QATAR • M2 growth rate declined in April 2016 • Equities continuing their April losing streak SAUDI ARABIA • Non-oil exports fell 11.2% YoY in February • Almost all sectors witnessed losses UAE • M3 growth rate accelerated to 2.1% YoY in March • All ADX market sectors fell in May, except for just one sector... • … while just three sectors recorded gains in DFM market Ramy Oraby Economist Mubasher International Ramy.Oraby@MubasherFS.com Ayman Elshahed Analyst Mubasher International Ayman.Elshahed@MubasherFS.com
  2. 2. For more information on MubasherTrade, please visit our website at www.MubasherTrade.com or contact us at Research@MubasherTrade.com. Please read the important disclosure and disclaimer at the end of this document. Page 2 The Monthly Chartbook | Multi-Asset Classes | Global Wednesday, 1 June 2016 THE BIG PICTURE: MACROECONOMIC PULSE Egypt's annual inflation accelerated to 10.3% YoY as inflationary pressures continued to build. Meanwhile, inflation continued to stabilize in both KSA and Qatar at 4.2% YoY and 3.4% YoY, respectively. An increase in food and education prices pushed annual inflation higher to 1.63% in the UAE. Egypt’s PMI rose to 46.9 in April staying in ‘contraction territory’ for the seventh consecutive month. In KSA, PMI declined marginally from 54.5 in March to 54.2 in April. Meanwhile, the UAE’s PMI recorded the weakest pace since January to record 52.8 in April. Egypt's reserves rose 2.7% MoM to USD17.01bn due to an increase in the value of foreign currencies. The CBE is expected to receive USD2bn deposit from the UAE and a USD2.5bn grant from KSA. Moreover, KSA net foreign reserves decreased 15.7% YoY to USD572.2bn as investments in foreign securities declined 26% YoY. The UAE’s foreign assets went up 5.7% MoM. Qatar’s foreign reserve went down 0.9% MoM to USD35.7bn in April. Pressure on both EGP and SAR resumed despite of the reports of aids from the UAE and KSA and recent oil prices rebound. A working paper released by SAMA regarding the kingdom’s exchange rate policy was said to initiate speculative attacks on the peg. We do believe GCC countries will maintain the USD peg. In Egypt, the current exchange rate would come under more pressure as pro-rate hike signs from the Fed strengthen the greenback.
  3. 3. For more information on MubasherTrade, please visit our website at www.MubasherTrade.com or contact us at Research@MubasherTrade.com. Please read the important disclosure and disclaimer at the end of this document. Page 3 The Monthly Chartbook | Multi-Asset Classes | Global Wednesday, 1 June 2016 THE BIG PICTURE: ASSET CLASSES Global asset classes witnessed a mixed performance in May 2016; six of them ended the month with losses, with MSCI Real Estate EM (Emerging Markets) the worst performer (-6.2%), while four asset classes gained slightly, led by S&P Global 100 as the best performer (+1.0%), mostly towards the end of the month. Source: Bloomberg Asset Class S&P Global 100 MSCI FM MSCI DM USD Cash 3M MSCI All World Dow Jones Sukuk Index Barclays Global Bond Asia ex. Japan MSCI EM Real Estate EM May 2016 -6.2% -3.9% -1.6% -0.5% -0.4% -0.2% 0.1% 0.2% 0.3% 1.0% Real Estate EM MSCI EM Asia ex. Japan Barclays Global Bond Dow Jones Sukuk Index MSCI All World USD Cash 3M MSCI DM MSCI FM S&P Global 100 Asset Classes May 2016 Performance
  4. 4. For more information on MubasherTrade, please visit our website at www.MubasherTrade.com or contact us at Research@MubasherTrade.com. Please read the important disclosure and disclaimer at the end of this document. Page 4 The Monthly Chartbook | Multi-Asset Classes | Global Wednesday, 1 June 2016 THE BIG PICTURE: COMMODITIES Commodities performance varied in May 2016, with Natural Gas the biggest gainer (+9.6%), while Silver was the biggest loser (-10.4%). Source: Bloomberg Commodity Natural Gas WTI Brent S&P Commodities Index Gold Copper Silver May 2016 -10.4% -7.5% -6.0% 2.9% 3.2% 6.9% 9.6% Silver Copper Gold S&P Commodities Index Brent WTI Natural Gas Commodities May 2016 Performance
  5. 5. For more information on MubasherTrade, please visit our website at www.MubasherTrade.com or contact us at Research@MubasherTrade.com. Please read the important disclosure and disclaimer at the end of this document. Page 5 The Monthly Chartbook | Multi-Asset Classes | Global Wednesday, 1 June 2016 THE BIG PICTURE: MENA EQUITIES Except for Jordan, Lebanon, and Bahrain all of which climbed by a few percentage points (+1.0%, +0.1%, and +0.1%, respectively), all MENA equities markets fell in May 2016. The worst performers were UAE (ADX), Qatar and Saudi Arabia, which declined by 6.5%, 6.4% and 5.2%, respectively — mostly towards end of month. Source: Bloomberg Markets Jordan Lebanon Bahrain Kuwait Morocco Oman Tunisia Egypt UAE - DFM Saudi Arabia Qatar UAE - ADX May 2016 -6.5% -6.4% -5.2% -5.1% -3.7% -2.3% -2.2% -1.1% -0.1% 0.1% 0.1% 1.0% UAE - ADX Qatar Saudi Arabia UAE - DFM Egypt Tunisia Oman Morocco Kuwait Bahrain Lebanon Jordan MENA Markets May 2016 Performance
  6. 6. For more information on MubasherTrade, please visit our website at www.MubasherTrade.com or contact us at Research@MubasherTrade.com. Please read the important disclosure and disclaimer at the end of this document. Page 6 The Monthly Chartbook | Multi-Asset Classes | Global Wednesday, 1 June 2016 Tax revenues went up from 6.2% to 7.6% of GDP as the Egyptian government targets tax base expansion. Meanwhile, compensation of employees went down to 4.8% of the GDP in Jul-Feb FY2015/16 compared with 5.2% of the GDP a year earlier. In absolute terms. compensation of employees went up from EGP125.2bn in Jul-Feb FY2014/15 to EGP134.9bn in Jul-Feb FY2015/16. However, the rate of wages growth was the lowest “in the last three fiscal years” backed by the reforms which included the civil service bill. On the other hand, interest payments accelerated, reflecting more dependence on debt instruments. We note that interest payments represent around 40% of total expenditures in July-Feb FY2015/16, compared with 27.5% a year earlier. EGYPT: MACRO
  7. 7. For more information on MubasherTrade, please visit our website at www.MubasherTrade.com or contact us at Research@MubasherTrade.com. Please read the important disclosure and disclaimer at the end of this document. Page 7 The Monthly Chartbook | Multi-Asset Classes | Global Wednesday, 1 June 2016 Egypt Health Care & Pharmaceuticals Construction & Materials Telecommunications Food & Beverages Personal & Household Produsts Financial Services Industrial Goods & Services EGX 30 Banks Real Estate Chemicals Basic Resources Travel & Leisure May 2016 -11.2% -11.0% -9.3% -7.1% -4.8% -3.7% -3.7% -1.9% -1.6% -0.2% 4.0% 4.5% 13.3% Travel & Leisure Basic Resources Chemicals Real Estate Banks EGX 30 Industrial Goods & Services Financial Services Personal & Household Produsts Food & Beverages Telecommunications Construction & Materials Health Care & Pharmaceuticals Egypt sectors May 2016 Performance EGYPT: EQUITIES A lot of sectors in Egypt recorded losses in May. The worst performers were Travel & Leisure and Basic Resources (-11.2% and -11.0%, respectively), unlike Health Care & Pharmaceuticals which gained 13.3%. Source: Bloomberg
  8. 8. For more information on MubasherTrade, please visit our website at www.MubasherTrade.com or contact us at Research@MubasherTrade.com. Please read the important disclosure and disclaimer at the end of this document. Page 8 The Monthly Chartbook | Multi-Asset Classes | Global Wednesday, 1 June 2016 EGYPT: EQUITIES (Cont.’d) Egyptian equities witnessed losses in May. 65% of the stocks were losers, 27% were gainers and 8% unchanged. The top gainer was Ajwa for Food industries (+28.1%), while the top loser was Beltone Financial Holding (-37.9%). Source: Bloomberg 11.7% 11.9% 12.5% 14.1% 14.4% 15.7% 16.8% 18.5% 26.8% 28.1% South Valley Cement Nozha International Hospital Telecom Egypt Egyptian International Pharmacueticals Misr Cement El Nasr Co for Transformers Natural Gas & Mining Projects Alexandria New Medical Center Samad Misr - EGYFERT Ajwa For Food Industries Egypt Top 10 Leaders -14.3% -14.8% -15.4% -15.6% -17.1% -17.4% -18.4% -20.4% -23.7% -37.9% TransOceans Tours Wadi Kom Ombo Land Reclamation Amer Group Holding El Nasr For Manufacturing Agricultures El Arabia for Land Reclamation Egypt Kuwait Holding El Wadi Co for Touristic Investments Orascom Hotels & Development Saudi Egyptian Investment & Finanacial Beltone Financial Holding Egypt Top 10 Laggards
  9. 9. For more information on MubasherTrade, please visit our website at www.MubasherTrade.com or contact us at Research@MubasherTrade.com. Please read the important disclosure and disclaimer at the end of this document. Page 9 The Monthly Chartbook | Multi-Asset Classes | Global Wednesday, 1 June 2016 QATAR: MACRO Qatar's M2 money supply growth rate remained negative on an annual basis for the third consecutive month as low oil and gas prices pressured liquidity in the banking system. Moreover, the negative growth rate has accelerated from -0.4% YoY in March to -1.6% YoY in April. Such deterioration was backed by a 17.6% YoY decline in the FCY deposits (versus -6% YoY in March). On the other hand, both demand and time deposits went up 11% YoY and 2.3% YoY, respectively. We note that government deposits at commercial banks rose 14.4% YoY to record QAR64.2bn in April 2016.
  10. 10. For more information on MubasherTrade, please visit our website at www.MubasherTrade.com or contact us at Research@MubasherTrade.com. Please read the important disclosure and disclaimer at the end of this document. Page 10 The Monthly Chartbook | Multi-Asset Classes | Global Wednesday, 1 June 2016 QATAR: EQUITIES All Qatari sectors witnessed negative performance in May, continuing their April pattern. The worst performing sector was Telecom (-10.4%). Source: Bloomberg Qatar Consumer Goods and Services Transportation Banks and Financial Services Industrials Qatar Exchange Index Insurance Real Estate Telecoms May 2016 -10.4% -8.4% -7.7% -6.4% -5.5% -5.3% -2.5% -1.6% Telecoms Real Estate Insurance Qatar Exchange Index Industrials Banks and Financial Services Transportation Consumer Goods and Services Qatar sectors May 2016 Performance
  11. 11. For more information on MubasherTrade, please visit our website at www.MubasherTrade.com or contact us at Research@MubasherTrade.com. Please read the important disclosure and disclaimer at the end of this document. Page 11 The Monthly Chartbook | Multi-Asset Classes | Global Wednesday, 1 June 2016 QATAR: EQUITIES (Cont.’d) The red color and the negative numbers dominated the Qatari market for the second month in a row. 82% of stocks witnessed losses, while just eight Qatari stocks recorded gains. Medicare Group and Gulf International Services were the best performers (+10.0% and +8.5%, respectively). Meanwhile, Qatar First Bank and Ooredoo were the worst performers down by 13.5% 10.6%, respectively. Source: Bloomberg -1.1% -0.6% 1.0% 1.2% 1.9% 2.3% 2.6% 5.0% 8.5% 10.0% Al Meera Consumer Goods Salam International Investment Qatar Gas Transport Zad Holding Qatar General Insurance and Reinsurance Dlala Brokerage & Investments Qatar Industrial Manufacturing Ahli Bank Gulf International Services Medicare Group Qatar Top 10 Leaders -8.6% -8.7% -9.9% -10.0% -10.1% -10.2% -10.2% -10.4% -10.6% -13.5% Industries Qatar Mazaya Qatar Real Estate Development Qatar Insurance Vodafone Qatar Qatar Cinema & Film Distribution Widam Food Qatari Investors Group Barwa Real Estate Ooredoo Qatar First Bank Qatar Top 10 Laggards
  12. 12. For more information on MubasherTrade, please visit our website at www.MubasherTrade.com or contact us at Research@MubasherTrade.com. Please read the important disclosure and disclaimer at the end of this document. Page 12 The Monthly Chartbook | Multi-Asset Classes | Global Wednesday, 1 June 2016 SAUDI ARABIA: MACRO The kingdom’s non-oil exports fell 11.2% YoY from SAR14.76bn in February 2015 to SAR13.11bn in February 2016. Plastic and rubber products, chemical products and transport equipment (c.69% of total non-oil exports) decreased by 18.2%, 9.2% and 9.7% YoY, respectively in February. On the other hand, imports continued to decline from SAR52.46bn in February 2015 to SAR40.69bn as machinery and electronics (c.30% of total imports) went down 24% YoY. Apart from the impact of oil prices, we note that downside economic risks to the kingdom‘s major trading partners (i.e. China and the UAE) weigh on non-oil exports. That said, Saudi Arabia’s current account deficit is expected to widen to 10.2% of GDP in 2016, according to the IMF.
  13. 13. For more information on MubasherTrade, please visit our website at www.MubasherTrade.com or contact us at Research@MubasherTrade.com. Please read the important disclosure and disclaimer at the end of this document. Page 13 The Monthly Chartbook | Multi-Asset Classes | Global Wednesday, 1 June 2016 SAUDI ARABIA: EQUITIES In Saudi Arabia, almost all sectors fell in May; just two sectors recorded gains, namely Media (+2.0%) and Energy & Utilities (+1.0%). Source: Bloomberg KSA Media Energy & Utilities Retail Industries Industrials Insurance Petrochemicals Agriculture & Food industries Telecoms Tadawul all share index Cement Banks & Financial Services Building & Construction Multi-Investment Transport Industries Real Estate Hotel & Tourism May 2016 -11.7% -10.0% -8.8% -8.7% -8.4% -6.8% -5.5% -5.3% -5.1% -3.7% -2.7% -2.5% -0.6% -0.01% 1.3% 2.0% Hotel & Tourism Real Estate Transport Industries Multi-Investment Building & Construction Banks & Financial Services Cement Tadawul all share index Telecoms Agriculture & Food industries Petrochemicals Insurance Industrials Retail Industries Energy & Utilities Media KSA sectors May 2016 Performance
  14. 14. For more information on MubasherTrade, please visit our website at www.MubasherTrade.com or contact us at Research@MubasherTrade.com. Please read the important disclosure and disclaimer at the end of this document. Page 14 The Monthly Chartbook | Multi-Asset Classes | Global Wednesday, 1 June 2016 SAUDI ARABIA: EQUITIES (Cont.’d) Around 80% of Saudi equities recorded losses in May, where Salama Operative Insurance (-25.4%) shifted from the top gainer position in April to the top loser position. Meanwhile, the top gainer was Fawaz Abdulaziz Al Hokair (+20.6%). Source: Bloomberg 5.4% 5.5% 5.7% 8.4% 8.6% 8.7% 9.3% 11.2% 12.8% 20.6% Arabia Insurance Cooperative National Industrialization Sahara Petrochemical Basic Chemical Industries Herfy Food Services Saudi Research & Marketing Bupa Arabia for Cooperative Insurance Saudi Dairy & Foodstuff Filing & Packing Materials Fawaz Abdulaziz Al Hokair KSA Top 10 Leaders -15.3% -15.3% -15.6% -15.8% -15.9% -16.1% -17.6% -19.0% -20.3% -25.4% AXA operative Insurance Trade Union Cooperative Insurance Aseer Jazan Development Mediterranean & Gulf Insurance Mobile Telemmunications Banque Saudi Fransi United Cooperative Assurance Saudi Re for Cooperative Reins Salama operative Insurance KSA Top 10 Laggards
  15. 15. For more information on MubasherTrade, please visit our website at www.MubasherTrade.com or contact us at Research@MubasherTrade.com. Please read the important disclosure and disclaimer at the end of this document. Page 15 The Monthly Chartbook | Multi-Asset Classes | Global Wednesday, 1 June 2016 UAE: MACRO The broad money supply aggregate (M3) growth rate rose to 2.21% YoY on a yearly basis in April, reflecting tightened conditions in the UAE. A sharp decline in the government deposits by 11.23% YoY was offset by 7.3% and 2.54% YoY increases in both M1 and Quasi-Monetary Deposits, respectively. Meanwhile, M3 monthly growth rate stalled in April, recording +0.01%. Recently, Abu Dhabi was reported to raise USD5bn in bonds from international markets. We note that tapping international debt markets for diversifying finance sources would help ease the pressure on domestic liquidity.
  16. 16. For more information on MubasherTrade, please visit our website at www.MubasherTrade.com or contact us at Research@MubasherTrade.com. Please read the important disclosure and disclaimer at the end of this document. Page 16 The Monthly Chartbook | Multi-Asset Classes | Global Wednesday, 1 June 2016 UAE-ADX Insurance Consumer Staples Industrial Real Estate Financial Services & Investment Services Telecommunication ADX General Index Energy Banks May 2016 -7.7% -6.9% -6.5% -6.3% -4.3% -3.7% -3.5% -3.1% -2.3% 1.4% Banks Energy ADX General Index Telecommunication Services Financial Services & Investment Real Estate Industrial Consumer Staples Insurance UAE-ADXsectors May 2016 Performance UAE: EQUITIES In UAE-ADX, except for Insurance (+1.4%), all sectors fell in May, reversing their pattern in April. The worst performing sectors were Banks (-7.7%) and Energy (-6.9%). Source: Bloomberg
  17. 17. For more information on MubasherTrade, please visit our website at www.MubasherTrade.com or contact us at Research@MubasherTrade.com. Please read the important disclosure and disclaimer at the end of this document. Page 17 The Monthly Chartbook | Multi-Asset Classes | Global Wednesday, 1 June 2016 UAE: EQUITIES (Cont.’d) Almost of UAE-DFM's sectors recorded losses in May, except for Consumer Staples (+11.2%), Transportation (+5.2%) and Industrials (+1.8%). Source: Bloomberg UAE-DFM Consumer Staples Transportation Industrials Telecom Services Financial Banks Financial Insurance DFM Index Real Estate Financial Investment May 2016 -12.7% -8.7% -5.1% -5.1% -2.1% -1.2% -0.8% 1.8% 5.2% 11.2% Financial Investment Real Estate DFM Index Financial Insurance Financial Banks Services Telecom Industrials Transportation Consumer Staples UAE-DFM May 2016 Performance
  18. 18. For more information on MubasherTrade, please visit our website at www.MubasherTrade.com or contact us at Research@MubasherTrade.com. Please read the important disclosure and disclaimer at the end of this document. Page 18 The Monthly Chartbook | Multi-Asset Classes | Global Wednesday, 1 June 2016 UAE: EQUITIES (Cont’d) Around 64% of UAE equities fell in May. On one hand, BLME Holdings (+40.0%) and International Fish Farming (+29.2%) were the best performers. On the other hand, National Marine Dredging (-24.2%) and Dubai Financial Market (-19.6%) were the worst performers. Source: Bloomberg 5.5% 6.9% 8.1% 9.8% 11.1% 11.9% 12.4% 20.0% 29.2% 40.0% Union Cement Sharjah Islamic Bank Air Arabia Ras Al Khaima Poultry & Feeding Sharjah Group Dubai Parks & Resorts Takaful Emarat Insurance Abu Dhabi National Insurance International Fish Farming BLME Holdings UAE Top 10 Leaders -12.8% -12.9% -13.7% -13.7% -14.9% -15.7% -16.0% -16.3% -19.6% -24.2% Amlak Finance Arkan Building Materials Finance House Mashreqbank Gulf Livestock Gulf General Investment Arabtec Holding Al Khazna Insurance Dubai Financial Market National Marine Dredging UAE Top 10 Laggards
  19. 19. Important Disclosures METHODOLOGY: We strive to search for the best businesses that trade at the lowest valuation levels as measured by an issuer’s intrinsic value on a per-share basis. In doing so, we follow both top- down and bottom-up approaches. Under the top-down approach, we attempt to study the most important quantitative and qualitative factors that we believe can affect a security's value, including macroeconomic, sector-specific, and company-specific factors. Under the bottom-up approach, we focus on the analysis of individual stocks by running our proprietary scoring model, including valuation, financial performance, sentiment, trading, risk, and value creation. COUNTRY MACRO RATINGS: We analyze the four main sectors of a country’s macroeconomics, then we assign , , and  star for low risk, moderate risk, and high risk, respectively. We use different weights for each economic sector: (a) Real Sector (30% weight), (b) Monetary Sector (10% weight), (c) Fiscal Sector (25% weight), (d) External Sector (15% weight), and (e) Credit Rating and Outlook (20%). STOCK MARKET RATINGS: We compare our year-end price targets for the subject market index on a total-return basis versus our calculated required rate of return (RRR). Taking into account our Country Macro Rating, we set the “Neutral” borderline (below which is “Underweight”) as 20% of RRR for  Country Macro Rating, 40% of RRR for  Country Macro Rating, and 60% of RRR for  Country Macro Rating. That said, our index price targets are based on the average of two models. Model (1): Estimated index levels based on consensus price targets of all index constituents. Stocks with no price targets are valued at market price. Model (2): Estimated index levels based on our expected re-pricing (whether re-rating, de-rating, or unchanged rating) of the forward price-earnings ratio (PER) of each index in addition to consensus earnings growth for the forward year. SECTOR RATINGS: On the sectors level, we focus on six major sectors, namely (1) Consumer and Health Care, (2) Financials, (3) Industrials, Energy, & Utilities, (4) Materials, (5) Real Estate, and (6) Telecom Services & IT. To assess each sector, we use the SWOT analysis to list the strengths, weaknesses, opportunities, and threats in each country. We then translate our qualitative SWOT analysis into a quantitative model to evaluate all six sectors across countries. Each of the measures we used, although mostly subjective, is assigned a score as either +1 (high impact), 0 (medium impact), or -1 (low impact). At a later stage, when assigning the final rating – Overweight, Neutral, or Underweight – for each sector in each country, we realize that sometimes it is unfair to assign equal weights for the sub-sectors in each major sector assessed. Hence, some of the sub-sectors are given different weights for their significant profile in each country. Additionally, the final rating for each sector in each specific country is assigned based on a relative calculation comparing this sector to all other sectors in this country. Low (1) Moderate (2) High (3) Buy (B) Higher than RRR Higher than RRR Higher than RRR Hold (H) Between RRR and 20% of RRR Between RRR and 40% of RRR Between RRR and 60% of RRR Sell (S) Lower than 20% of RRR Lower than 40% of RRR Lower than 60% of RRR Not Rated (NR) Not Covered (NC) We do not currently cover this stock or we are restricted from coverage for regulatory reasons. InvestmentRating Risk Rating We have decided not to publish a rating on the stock due to certain circumstances related to the company (i.e. special situations). If Total Return is … Disclosure Appendix SECURITY INVESTMENT RATINGS: We combine intrinsic value, relative valuation, and market sentiment into a single rating. Our three-pronged methodology involves (1) discounted cash flows “DCF” valuation model(s), (2) relative valuation metrics, and (3) overall sentiment. Whenever possible we attempt to apply all three aspects on the issuers or securities under review. In certain cases where we do not have our own financial and valuation models, we attempt to scan the market for other analysts’ value estimates and ratings (i.e. consensus view) on average. We compliment this with relative valuation and sentiment drivers, such as positive/neutral/negative news flows. For all issuers/securities covered, we have three investment ratings (Buy, Hold, or Sell), comparing the security’s expected total return (including both price performance and expected cash dividend) over a 12-month period versus its Required Rate of Return “RRR” as calculated using the Capital Asset Pricing Model “CAPM” and adjusted for the Risk Rating we attach to each security. Our price targets are subjective and are estimates of the analysts where the securities covered will trade within the next 12 months. Price targets can be derived from earnings-based valuation models (e.g. Discounted Cash Flow “DCF”), asset-based valuation models (e.g. Net Asset Value “NAV”), relative valuation multiples (e.g. PER, PBV, EV/EBITDA, etc.), or a combination of them. In case we do not have our own valuation model, we use a weighted average of market consensus price targets and ratings. We review the investment ratings periodically or as the situation necessitates. SECURITY RISK RATINGS: We assess the risk profile of each issuer/security covered and assign one of three risk ratings (High, Moderate, or Low). The risk rating is weighted to reflect different aspects specific to (1) the sector, (2) the issuer, (3) the security under review, and (4) volatility versus the market (as measure by beta) and versus the security’s average annualized standard deviation. We review the risk ratings at least annually or as the situation necessitates. Other Disclosures MFS does not have any proprietary holding in any securities. Only as a nominee, MFS holds shares on behalf of its clients through Omnibus accounts. MFS is not currently a market maker for any listed securities.
  20. 20. Analyst Certification I (we), Ramy Oraby, Economist and Ayman Elshahed, Analyst, employed with Mubasher International, a company under the National Technology Group of Saudi Arabia being a shareholder of Mubasher Financial Services BSC (c) as author(s) to this report, hereby certify that all the views expressed in this research report accurately reflect my (our) views about the subject issuer(s) or security(ies). I (we) also certify that no part of my (our) compensation was, is or will be directly or indirectly related to the specific recommendation(s) or view(s) expressed in this report. Head of Research Certification I, Amr Hussein Elalfy, Global Head of Research of Mubasher Financial Services BSC (c) confirm that I have vetted the information, and all the views expressed by the Analyst in this research report about the subject issuer(s) or security(ies). I also certify that Research Team, the author of this report, has not received any compensation directly related to the contents of the Report. Disclaimer This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. Mubasher Financial Services BSC (c) (‘MFS’) has based this document on information obtained from sources it believes to be reliable but which it has not independently verified; MFS makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. The opinions contained within the document are based upon publicly available information at the time of publication and are subject to change without notice. This document is not intended for all recipients and may not be suitable for all investors. Securities described in this document are not available for sale in all jurisdictions or to certain category of investors. The document is not substitution for independent judgment by any recipient who should evaluate investment risks. Additionally, investors must regard this document as providing stand-alone analysis and should not expect continuing analysis or additional documents relating to the issuers and/or securities mentioned herein. Past performance is not necessarily a guide to future performance. Forward-looking statements are not predictions and may be subject to change without notice. The value of any investment or income may go down as well as up and you may not get back the full amount invested. Where an investment is denominated in a currency other than the local currency of the recipient of the research report, changes in the exchange rates may have an adverse effect on the value, price or income of that investment. In case of investments for which there is no recognized market, it may be difficult for investors to sell their investments or to obtain reliable information about its value or the extent of the risk to which it is exposed. References to ratings/recommendations are for informational purposes only and do not imply that MFS adopts, supports or confirms in any way the ratings/recommendations, opinions or conclusions of the analysts. This document is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country, or other jurisdiction where such distribution, publication, availability or use would be contrary to law, regulation or which would subject MFS or its affiliates to any registration or licensing requirements within such jurisdiction. MFS accepts no liability for any direct, indirect, or consequential damages or losses incurred by third parties including its clients from any use of this document or its contents. Copyright Copyright © 2016, Mubasher Financial Services BSC (MFS), ALL RIGHTS RESERVED. No part or excerpt of this document may be redistributed, reproduced, stored in a retrieval system, or transmitted, on any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of MFS. MubasherTrade is a trademark of Mubasher Financial Services BSC. Mubasher Financial Services BSC (c) is an Investment Business Firm Category 1, licensed and regulated by the Central Bank of Bahrain. Issuer of Report Mubasher Financial Services BSC (c) is an Investment Business Firm Category 1, licensed and regulated by the Central Bank of Bahrain. Website: www.MubasherTrade.com E-mail: Research@MubasherTrade.com
  21. 21. Sales & Research Contact Details INSTITUTIONAL SALES RETAIL SALES RESEARCH MENA Bahrain UAE Research Team Inst.Sales@MubasherFS.com Global@MubasherTrade.com UAE@MubasherTrade.com Research@MubasherTrade.com +971 4 321 1167 (UAE) Call Center: +973 1730 0849 Call Center: +971 800 567 000 Egypt Egypt Institutions-Egy@Mubasher.net Egypt@MubasherTrade.com +202 2262 3310 Call Center: 16699 / +202 2262 3230

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