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12 November Daily market report

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12 November Daily market report

  1. 1. Page 1 of 7 QSE Intra-Day Movement Qatar Commentary The QSE Index declined 0.2% to close at 10,830.3. Losses were led by the Real Estate and Consumer Goods & Services indices, falling 2.1% and 1.0%, respectively. Top losers were Medicare Group and Widam Food Co., falling 7.2% and 3.4%, respectively. Among the top gainers, Doha Insurance Co. gained 8.8%, while Qatar German Co. for Medical Devices was up 4.0%. GCC Commentary Saudi Arabia: The TASI Index fell 0.6% to close at 7,083.4. Losses were led by the Media & Publishing and Industrial Inv. indices, falling 6.3% and 2.0%, respectively. Saudi Research & Market. Group fell 8.5%, while Amana Insurance was down 4.5%. Dubai: The DFM Index declined 1.5% to close at 3,265.3. The Real Estate & Construction index fell 3.4%, while the Services index declined 2.0%. Arab Insurance Group fell 9.9%, while Amlak Finance was down 9.8%. Abu Dhabi: The ADX benchmark index fell 0.3% to close at 4,200.2. The Real Estate index declined 2.5%, while the Energy index fell 1.0%. Al Khazna Insurance and Ras Al Khaimah Company for White Cement & Const. Materials were down 10.0% each. Kuwait: The KSE Index rose marginally to close at 5,766.4. The Technology index gained 1.1%, while the Banks index rose 0.6%. Mashaer Holding Co. gained 7.6%, while United Foodstuff Industries Group Co. was up 7.1%. Oman: The MSM Index fell 0.3% to close at 5,848.4. Losses were led by the Financial and Industrial indices, falling 0.3% and 0.2%, respectively. Port Services Corporation fell 9.6%, while Oman Fisheries was down 3.5%. Bahrain: The BHB Index gained 0.1% to close at 1,233.9. The Commercial Bank index rose 1.1%, while the other indices ended flat or in red. National Bank of Bahrain and Nass Corporation were up 2.9% each. QSE Top Gainers Close* 1D% Vol. ‘000 YTD% Doha Insurance Co. 23.40 8.8 33.2 (19.3) Qatar German Co. for Medical Dev. 15.49 4.0 368.4 52.6 Qatar General Ins. & Reinsur. Co. 57.00 3.1 23.5 11.1 Al Meera Consumer Goods Co. 225.00 2.3 17.9 12.5 Qatar National Cement Co. 104.00 1.9 0.2 (21.2) QSE Top Volume Trades Close* 1D% Vol. ‘000 YTD% Vodafone Qatar 12.62 (2.4) 1,226.0 (23.3) United Development Co. 22.60 (0.4) 600.1 (4.2) QNB Group 174.00 1.5 415.9 (18.3) Qatar Gas Transport Co. 24.45 0.0 373.6 5.8 Qatar German Co. for Medical Dev. 15.49 4.0 368.4 52.6 Market Indicators 12 Nov 15 11 Nov 15 %Chg. Value Traded (QR mn) 289.6 279.3 3.7 Exch. Market Cap. (QR mn) 570,360.6 570,438.5 (0.0) Volume (mn) 6.1 6.0 1.8 Number of Transactions 4,066 4,126 (1.5) Companies Traded 39 39 0.0 Market Breadth 15:19 15:21 – Market Indices Close 1D% WTD% YTD% TTM P/E Total Return 16,834.19 (0.2) (5.3) (8.1) 11.2 All Share Index 2,892.16 (0.1) (5.0) (8.2) 11.4 Banks 2,935.96 0.6 (4.2) (8.4) 11.9 Industrials 3,218.51 (0.2) (4.7) (20.3) 12.3 Transportation 2,514.69 (0.1) (2.5) 8.5 12.0 Real Estate 2,512.86 (2.1) (7.8) 12.0 8.1 Insurance 4,344.20 1.8 (5.3) 9.7 12.1 Telecoms 944.44 0.2 (7.4) (36.4) 20.7 Consumer 6,413.77 (1.0) (4.3) (7.1) 13.6 Al Rayan Islamic Index 4,068.26 (1.0) (6.0) (0.8) 11.9 GCC Top Gainers## Exchange Close# 1D% Vol. ‘000 YTD% Ajman Bank Dubai 1.99 10.6 5,195.2 (25.4) Nat. Marine Dredging Abu Dhabi 4.75 5.3 1.1 (31.2) Invest Bank Abu Dhabi 2.10 5.0 1,500.0 (18.4) Gulf Bank Kuwait 0.29 3.6 744.4 5.0 Qatar Gen. Ins. & Rein. Qatar 57.00 3.1 23.5 11.1 GCC Top Losers## Exchange Close# 1D% Vol. ‘000 YTD% Arabtec Holding Co. Dubai 1.18 (9.9) 42,512.6 (57.7) Saudi Res. & Marketing Saudi Arabia 22.65 (8.5) 1,499.1 36.3 Drake & Scull Int. Dubai 0.46 (5.2) 15,943.7 (48.6) Dubai Financial Market Dubai 1.16 (4.9) 8,291.8 (42.3) Abu Dhabi Nat. Energy Abu Dhabi 0.40 (4.8) 2,663.5 (50.0) Source: Bloomberg (# in Local Currency) (## GCC Top gainers/losers derived from the Bloomberg GCC 200 Index comprising of the top 200 regional equities based on market capitalization and liquidity) QSE Top Losers Close* 1D% Vol. ‘000 YTD% Medicare Group 140.10 (7.2) 18.9 19.7 Widam Food Co 48.70 (3.4) 1.5 (19.4) Dlala Brokerage & Inv Holding Co. 20.00 (3.3) 12.0 (53.3) Al Khaleej Takaful Group 31.00 (3.0) 8.4 (39.0) Ezdan Holding Group 17.30 (2.9) 364.1 16.0 QSE Top Value Trades Close* 1D% Val. ‘000 YTD% QNB Group 174.00 1.5 72,305.8 (18.3) Industries Qatar 111.00 (1.0) 31,260.4 (33.9) Gulf International Services 57.80 1.2 18,274.2 (40.5) Qatar Electricity & Water Co. 207.00 0.5 16,555.0 10.4 Qatar Islamic Bank 116.50 0.0 16,448.2 14.0 Source: Bloomberg (* in QR) Regional Indices Close 1D% WTD% MTD% YTD% Exch. Val. Traded ($ mn) Exchange Mkt. Cap. ($ mn) P/E** P/B** Dividend Yield Qatar* 10,830.33 (0.2) (5.3) (6.7) (11.8) 79.55 156,678.1 11.2 1.6 4.7 Dubai 3,265.28 (1.5) (5.4) (6.8) (13.5) 86.94 88,220.8 11.9 1.2 7.6 Abu Dhabi 4,200.16 (0.3) (1.5) (2.8) (7.3) 61.95 116,094.0 11.8 1.3 5.4 Saudi Arabia 7,083.43 (0.6) 1.8 (0.6) (15.0) 1,368.44 431,365.6 16.0 1.7 3.6 Kuwait 5,766.37 0.0 (0.1) (0.2) (11.8) 47.83 90,801.9 14.6 1.0 4.5 Oman 5,848.41 (0.3) (1.2) (1.3) (7.8) 5.03 23,692.1 10.5 1.2 4.5 Bahrain 1,233.92 0.1 (1.3) (1.3) (13.5) 1.87 19,344.5 1.5 0.8 5.6 Source: Bloomberg, Qatar Stock Exchange, Tadawul, Muscat Securities Exchange, Dubai Financial Market and Zawya (** TTM; * Value traded ($ mn) do not include special trades, if any) 10,750 10,800 10,850 10,900 9:30 10:00 10:30 11:00 11:30 12:00 12:30 13:00
  2. 2. Page 2 of 7 Qatar Market Commentary  The QSE Index declined 0.2% to close at 10,830.3. The Real Estate and Consumer Goods & Services indices led the losses. The index fell on the back of selling pressure from GCC and non-Qatari shareholders despite buying support from Qatari shareholders.  Medicare Group and Widam Food Co. were the top losers, falling 7.2% and 3.4%, respectively. Among the top gainers, Doha Insurance Co. gained 8.8%, while Qatar German Co. for Medical Devices was up 4.0%.  Volume of shares traded on Thursday rose by 1.8% to 6.1mn from 6.0mn on Wednesday. However, as compared to the 30-day moving average of 7.4mn, volume for the day was 17.8% lower. Vodafone Qatar and United Development Co. were the most active stocks, contributing 20.0% and 9.8% to the total volume, respectively. Source: Qatar Stock Exchange (* as a % of traded value) Earnings Releases and Global Economic Data Earnings Releases Company Market Currency Revenue (mn) 3Q2015 % Change YoY Operating Profit (mn) 3Q2015 % Change YoY Net Profit (mn) 3Q2015 % Change YoY Emaar Properties Dubai AED 3,329.3 67.5% – – 843.4 20.3% Ekttitab Holding Co. Dubai KD – – – – -0.1 NA Al Salam Group Holding Co. Dubai KD 0.4 -82.1% – – -0.1 NA Dubai Islamic Insurance & Reinsurance Co. (AMAN) Dubai AED – – – – -1.4 NA Hits Telecom Holding Co. Dubai KD 37.1 -10.6% – – 0.2 NA Al-Madina for Finance & Investment Co. Dubai KD 0.0 -82.0% -1.1 NA 2.4 NA United Foods Co. (UFC) Dubai AED 87.9 -11.1% 0.0 NA 4.4 405.7% Emirates Refreshments Dubai AED 19.3 1.7% 3.0 1,125.4% 2.5 739.6% Dubai Refreshment Dubai AED 273.0 2.6% 0.0 NA 41.9 10.7% Marka Dubai AED 84.1 NA -9.4 NA -14.7 NA Oman Insurance Co. Dubai AED 344.2 -0.9% 17.4 -41.1% 27.5 -22.0% Gulf Cement Co. Abu Dhabi AED 175.6 17.3% 0.0 NA 16.0 -46.9% Al Ain Ahlia Insurance Co. Abu Dhabi AED 50.7 12.4% 12.8 32.0% 1.0 -64.8% Al Fujairah National Insurance Co. Abu Dhabi AED 27.7 -5.2% 3.7 -50.8% 0.5 -95.1% Fujairah Cement Industries (FCI) Abu Dhabi AED 138.9 -7.0% – – 7.8 41.0% Umm Alqaiwain Cement Industries Co. (UCIC) Abu Dhabi AED 0.1 -97.2% – – 0.0 NA Sharjah Insurance Co. Abu Dhabi AED – – – – -6.9 NA Green Crescent Insurance Co. Abu Dhabi AED – – – – -4.3 NA United Insurance Co. Abu Dhabi AED 11.4 -52.8% -18.7 NA -18.6 NA Arab Insurance Group (Arig) Bahrain USD 26.5 -56.7% – – -4.8 NA Aluminium Bahrain (Alba) Bahrain BHD 184.4 -17.4% – – 8.7 -70.6% Al Ahlia Insurance Co. Bahrain BHD 1.4 13.8% 0.6 23.1% -1.1 NA Bahrain National Holding Co. Bahrain BHD 3.7 8.7% 0.9 3.3% 1.1 -13.0% Bahrain Tourism Co. (BTC) Bahrain BHD 1.6 18.7% – – 0.4 62.6% GFH Financial Group (GFH) Bahrain USD 23.3 12.6% – – 0.8 -87.4% Source: Company data, DFM, ADX, MSM Overall Activity Buy %* Sell %* Net (QR) Qatari 72.61% 43.65% 83,894,756.91 GCC 4.99% 9.86% (14,084,609.42) Non-Qatari 22.39% 46.49% (69,810,147.49)
  3. 3. Page 3 of 7 Global Economic Data Date Market Source Indicator Period Actual Consensus Previous 11/12 US Department of Labor Initial Jobless Claims 7-November 276k 270k 276k 11/12 US Department of Labor Continuing Claims 31-October 2,174k 2,155k 2,169k 11/12 US Bloomberg Bloomberg Consumer Comfort 8-November 41.6 – 41.1 11/12 US US Treasury Monthly Budget Statement October -$136.5bn -$131.5bn $121.7bn 11/13 US Bureau of Labor Statistics PPI Ex Food, Energy, Trade MoM October -0.10% 0.10% -0.30% 11/13 US Bureau of Labor Statistics PPI Ex Food, Energy, Trade YoY October 0.40% 0.50% 0.50% 11/13 US Bureau of Labor Statistics PPI Final Demand YoY October -1.60% -1.20% -1.10% 11/13 US U.S. Census Bureau Business Inventories September 0.30% 0.00% 0.10% 11/13 EU Eurostat Trade Balance SA September 20.1bn 19.3bn 19.0bn 11/13 EU Eurostat Trade Balance NSA September 20.5bn 16.0bn 11.2bn 11/13 EU Eurostat GDP SA QoQ 3Q2015 0.30% 0.40% 0.40% 11/13 EU Eurostat GDP SA YoY 3Q2015 1.60% 1.70% 1.50% 11/12 EU Eurostat Industrial Production SA MoM September -0.30% -0.10% -0.40% 11/12 EU Eurostat Industrial Production WDA YoY September 1.70% 1.30% 2.20% 11/12 France Banque De France Current Account Balance September 0.5bn – -0.1bn 11/12 France INSEE CPI EU Harmonized MoM October 0.10% 0.10% -0.40% 11/12 France INSEE CPI EU Harmonized YoY October 0.20% 0.10% 0.10% 11/12 France INSEE CPI MoM October 0.10% 0.10% -0.40% 11/12 France INSEE CPI YoY October 0.10% 0.10% 0.00% 11/12 France INSEE CPI Ex-Tobacco Index October 126.0 126.0 125.9 11/13 France INSEE GDP YoY 3Q2015 1.20% 1.10% 1.10% 11/13 France INSEE GDP QoQ 3Q2015 0.30% 0.30% 0.00% 11/13 France INSEE Non-Farm Payrolls QoQ 3Q2015 0.10% 0.10% 0.20% 11/13 France French Labor Office Wages QoQ 3Q2015 0.20% – 0.30% 11/13 Germany Destatis GDP SA QoQ 3Q2015 0.30% 0.30% 0.40% 11/13 Germany Destatis GDP WDA YoY 3Q2015 1.70% 1.80% 1.60% 11/13 Germany Destatis GDP NSA YoY 3Q2015 1.80% 1.80% 1.60% 11/12 UK Royal Institution of Chartered RICS House Price Balance October 49% 45% 44% 11/13 UK ONS Construction Output SA MoM September -0.20% 1.50% -3.40% 11/13 UK ONS Construction Output SA YoY September -1.60% -0.40% -0.60% 11/13 Spain INE CPI Core MoM October 0.90% – 0.10% 11/13 Spain INE CPI Core YoY October 0.90% 0.90% 0.80% 11/13 Italy ISTAT GDP WDA QoQ 3Q2015 0.20% 0.30% 0.30% 11/13 Italy ISTAT GDP WDA YoY 3Q2015 0.90% 1.00% 0.60% 11/13 Italy Banca D'Italia General Government Debt September 2,191.7bn – 2,184.7bn 11/12 China National Bureau of Statistics New Yuan Loans CNY October 513.6bn 800.0bn 1,050.0bn 11/12 China The People's Bank of China Money Supply M2 YoY October 13.50% 13.20% 13.10% 11/12 China National Bureau of Statistics Aggregate Financing CNY October 476.7bn 1,050.0bn 1,300.0bn 11/12 China The People's Bank of China Money Supply M0 YoY October 3.80% 3.60% 3.70% 11/12 China The People's Bank of China Money Supply M1 YoY October 1.70% 1.80% 1.60% Source: Bloomberg (s.a. = seasonally adjusted; n.s.a. = non-seasonally adjusted; w.d.a. = working day adjusted)
  4. 4. Page 4 of 7 News Qatar  VFQS September Q In Line with QNBFS Est.; Growth Expected in 2H; Reduce with QR11 Price Target – Vodafone Qatar’s revenue/earnings bang in line with our estimate but miss consensus. VFQS reported a net loss of QR113.6mn for the quarter ended September 2015, which included a QR10mn loss on property disposal. Excluding this item, net loss for the quarter came in at QR103.3mn, right in line with our estimate of QR102.2mn. Net loss, however, missed Bloomberg consensus (QR82mn). Reported revenue was also in line with our model at QR528.1mn (QNBFS estimate of QR532.3mn; Bloomberg mean of QR552.0mn). Operating trends as expected. ARPU for the quarter came in sequentially flat at QR111, with mobile subs at 1.486mn (~+5% QoQ). EBITDA margin for the quarter stood at 19.1% vs. QNBFS estimate of 19.2%. Quarterly mobile revenue market share finally improved sequentially to 29.6% (vs. 28.7% in the June quarter) after declining for the previous four quarters. More details on the results vs. our estimates/previous comparables are available on page 2. 2H guidance calls for improvement given traction in postpaid and relative stability in prepaid. VFQS management witnessed positive trends in the September quarter and forecasts stronger results in 2HFY2016. Longer-term, the company also expects some regulatory relief on the fixed-line front. For FY2016, the company guided to QR2.2-2.24bn in revenue, which implies a 5-3% decline on a FY basis but a 6-10% increase over 1HFY2016. VFQS now expects an EBITDA margin of 23.5% for FY2016 (24.6% in FY2015 and 19.8% in 1HFY2016). Capex intensity is expected to come in at 17% for FY2016 vs. ~25% in FY2015. Recommendation: We rate VFQS a Reduce with a QR11 price target. Key metrics remain weak across the board and the stock remains expensive. We would need to see evidence of a recovery to become more constructive on the name. (QNBFS Research, Company Financials)  MSCI to include QGTS, Etisalat Group in EM Index – Equity index compiler MSCI will add Qatar Gas Transport Company/Nakilat (QGTS) and Emirates Telecommunications Group Company (Etisalat Group) to its emerging markets index (EM Index). Meanwhile, MSCI said it will remove Gulf International Services (GISS) from EM Index, while adding Bahrain’s Ahli United Bank to its frontier markets index. The changes will take effect at the end of November 2015. (Reuters)  QCB announces results of govt Sukuk, bonds auction – The Qatar Central Bank (QCB) has announced results of government Sukuk and bonds’ auction conducted on November 11, 2015. The QCB issued government Sukuk worth QR3.125bn and bonds worth QR3.375bn with a maturity period of three, five, seven and 10 years. Sukuk worth QR200mn (3 yrs), QR450mn (5 yrs), QR1.2bn (7 yrs) and QR1.275bn (10 yrs) were issued at yields of 2.25%, 2.75%, 3.25% and 3.75%, respectively. Government bonds worth QR1.4bn (3 yrs), QR1.425bn (5 yrs), QR300mn (7 yrs) and QR250mn (10 yrs) were issued at yields of 2.25%, 2.75%, 3.25% and 3.75%, respectively. The Sukuks and bonds were auctioned at similar yields fetched in earlier auction on September 2, 2015. (QCB)  Fitch rates IBQ’s debt program ‘A+’ – Fitch Ratings has assigned International Bank of Qatar’s (IBQ) new $2bn-euro medium-term note (EMTN) program a long-term rating of ‘A+’ and a short-term rating of ‘F1’. Notes issued under this program are unconditionally and irrevocably guaranteed by IBQ. The guarantee constitutes direct, unconditional, unsubordinated and unsecured obligation of IBQ. The notes will be issued by IBQ Finance Limited in the Cayman Islands. IBQ Finance is a wholly owned subsidiary of IBQ that was set up solely to act as the issuer of debt funding. (Reuters)  Management reshuffle at ORDS – Ooredoo (ORDS) has appointed HE Sheikh Saud bin Nasser Al Thani as the Group Chief Executive Officer (CEO). He succeeds Dr. Nasser Marafih, who has been made a member of the company’s board of directors. Marafih will be an adviser to the chairman of the ORDS BoD. The company has also appointed Waleed Mohamed al-Sayed as the Deputy Group CEO, as well as CEO of Ooredoo Qatar. Yousuf Abdulla Al Kubaisi has replaced Al Sayed as the Chief Operations Officer (COO) of Ooredoo Qatar. (Gulftimes.com)  VFQS invests QR150mn in network infrastructure – Vodafone Qatar (VFQS) Chairman Sheikh Dr. Khalid bin Thani Al Thani has said that they had invested over QR150mn in its network infrastructure in six months up to September 2015, which included the continued upgradation of all of its network sites, reaching them at the forefront of technology. He said VFQS has improved its 3G and 4G coverage and capacity, which has produced a significantly better customer experience on both voice and data services. He added that the company is committed to continually investing in Qatar’s ICT (Information and communications technology) sector, which would play a key role in realizing the Qatar National Vision 2030. (Gulf-Times.com)  QATI offers insurance solutions for ‘safe and secure sailing’ – Qatar Insurance Company (QATI), as official insurer of the Qatar International Boat Show (QIBS), offered a number of solutions to ensure “safe and secure sailing” at the event. The QIBS 2015 was held at Mourjan Marinas - Lusail City during November 10-14, 2015. QATI showcased its experience and expertise in insuring boats and yachts with tailor-made solutions. (Gulf-Times.com)  QNNS facility repairs over 6,600 ships – Qatar Navigation (QNNS) has said that its ship repair facility at Mesaieed, which is a preferred yard of major yacht owners in Qatar, has repaired over 6,600 ships over the past 37 years. The Qatar-based marine transport and logistics conglomerate, demonstrated its core marine services, particularly in ship repairs, to business visitors during the Qatar International Boat Show 2015 (QIBS). The shipyard has received multiple accreditations over the years and has expanded its comprehensive line of services for yachts and traditional dhows, including covered air-conditioned facilities for hull repairs & painting, machinery & piping repairs, electrical repairs, HVAC services, refits & conversion, traditional wooden boats repairs & outfitting, among others. (Peninsula Qatar) International  US retail sales edge up lower than expected in Oct – US retail sales rose less than expected in October 2015 amid a surprise decline in automobile purchases, suggesting a slowdown in consumer spending that could temper expectations of a strong pickup in 4Q2015 economic growth. The Commerce Department said retail sales edged up 0.1% in October after being unchanged in both September and August. Economists had forecasted sales increasing by 0.3%. Retail sales excluding automobiles, gasoline, building materials and food services rose 0.2% after a 0.1% gain in September. Meanwhile, a report from the Labor Department showed its producer price index (PPI) fell 0.4% in October after dropping 0.5% in September. In the 12 months through October, the PPI fell 1.6%, the largest decline since the revamped series started in 2009 and following on the heels of a 1.1% drop in September. However, the weak spending and inflation data did not significantly shift expectations that the Fed will raise rates next month in the wake of October’s robust employment report. (Reuters)  Eurozone economic growth slowed in 3Q2015 as exports weaken – The Eurozone economy had slowed in 3Q2015 as exports to large developing economies weakened, a development that may hasten
  5. 5. Page 5 of 7 the European Central Bank’s expansion of its stimulus programs in December 2015. The European Union’s statistics agency said GDP in the 19 countries that share the euro was 0.3% higher QoQ and 1.6% higher YoY in 3Q2015. The QoQ growth rate was down from 0.4% in 2Q2015, and translates into an annualized growth rate of 1.2%, the weakest since 3Q2014. The slowdown underlines the tepid nature of the Eurozone’s economic recovery, which began in mid-2013 but has now eased for the second straight quarter. The slowdown was led by Germany and Italian economic growth also eased. There were fresh contractions in Greece, Finland and Estonia, while Portugal’s economy stagnated. By contrast, France’s economy returned to growth, having stalled in 2Q2015. (WSJ)  IMF staff recommends yuan inclusion into its currency basket – According to the judgment of the International Monetary Fund (IMF), China’s yuan is poised to enter the big league of global currencies. IMF Managing Director Christine Lagarde said the IMF staff has recommended the yuan to be included in the fund’s Special Drawing Rights (SDR) reserve-currency basket, alongside the US dollar, euro, pound and yen. The staff nod makes approval by the fund’s board in November 2015 all but certain, as major IMF shareholders including the US have said they will support inclusion if the yuan meets the IMF criteria. This would be the first change in the SDR’s currency composition since 2001, when the euro replaced the German deutsche mark and French franc. The IMF approval probably will make more countries comfortable including the currency in their foreign-exchange holdings, while boosting President Xi Jinping’s drive to open up the world’s second-biggest economy. (Bloomberg)  Russian economic contraction eased in 3Q2015 – According to preliminary data released by the Federal Statistics Service, Russian GDP had fallen 4.1% in 3Q2015, a slight improvement from the 4.6% decline recorded in 2Q2015. Analysts said the shallower decline suggests a deep economic slump in Russia is abating, but any recovery is expected to be slow. Russia’s economy has been hit by falling global commodity prices and is under stress from sanctions imposed on it by mainly Western nations angry over what they see as Russia’s aggressive policy towards Ukraine. Recovery prospects have been dimmed by signs that a global glut of oil will continue for the foreseeable future, keeping the price of Russia’s main export depressed. (Reuters)  India inflation rises in October led by higher food prices – Rising prices for some food products and firm demand during the festival season pushed up India’s retail inflation to a four-month high in October, indicating that the central bank would not cut interest rates at its policy review in December 2015. India's annual consumer price inflation edged up to 5.0% in October, up for the third straight month, and as compared to 4.41% in September. Food items, which accounts for around half the CPI basket, have increased in price up to one-third, forcing the government to import pulses and onions to offset the impact of a drought for the second straight year in much of the country. Meanwhile, another data showed industrial production grew at a slower than expected pace of 3.6% in September, dampened by a slower expansion in the mining sector. (Reuters) Regional  GPCA: GCC chemical exports touched $62bn in 2014 – According to a report by Gulf Petrochemicals & Chemicals Association (GPCA), petrochemical companies in the Gulf Cooperation Council (GCC) region posted a record 67.2mn tons in chemical exports valued at $62bn in 2014. As per the report, export revenues for GCC petrochemicals in 2014 had risen from $54.6bn in 2013 and were more than double than 10 years ago. The GCC chemical industry registered solid recovery since 2010 with chemical exports by volume 77% higher in 2014 than before the global economic and financial crisis level of 2008. However, though the GCC chemical trade quickly recovered from the effects of global crisis, it has grown modestly since 2012. (GulfBase.com)  Mideast printing industry to hit $20bn by 2016 – According to the organizers of the 13th edition of Saudi Print & Pack (SP&P) exhibition, the Middle East region’s printing industry is forecasted to touch $20bn by 2016, while the packaging market is growing at the rate of 5-15% YoY. (GulfBase.com)  Tadawul appoints acting CEO – The Saudi Stock Exchange (Tadawul) has appointed Khalid Al Hussan as its acting Chief Executive Officer (CEO). The appointment came after Adel bin Saleh Al Ghamdi stepped down from his position as CEO, which he had held since July 2013. Al Hussan previously worked as the Chief of Markets at the exchange. (Reuters)  Raytheon signs partnership deal with Advanced Electronics – US- based Raytheon Company has signed an agreement with Advanced Electronics Company to explore collaboration on weapon systems, integrated sensors, civil aviation and cyber security. The agreement reflects Raytheon’s new focus on building partnerships with local firms in targeted markets, and expanding into related commercial fields, instead of focusing on single weapon programs as it has in the past. This agreement will enable Raytheon to expand its presence in the Gulf, as well as hike its global commercial sales. (Reuters)  FSB: KSA faces deposit insurance challenge – According to the Basel-based Financial Stability Board (FSB), the Saudi Arabian government is facing a challenge in creating a system to insure bank deposits without shaking the confidence of depositors. The Kingdom is now preparing to introduce a formal system, a Depositor Protection Fund (DPF) on January 1, 2016 to insure deposits. DPF will be set up in the central bank, obtaining its money from premiums paid by banks and reimbursing depositors if banks fail. FSB, in its study published in November 2015, said the DPF had been well designed in some ways and would strengthen Saudi Arabia’s financial safety net. But it also warned there was a contradiction between the DPF, which would provide limited protection of deposits subject to market discipline, and the Economic Council’s pledge, which Saudis saw as offering full coverage to all depositors. FSB urged the Saudi authorities to ensure the DPF was big enough to handle a crisis by specifying a target fund size and establishing a back-up line of credit for it. FSB said the Kingdom is also creating a formal bank resolution framework to rescue or wind up failing banks. This would broaden and clarify powers which the central bank already claims in crises. (Reuters)  Network International: Overall market spending in UAE increased by 10% during 9M2015 – According to a new report on consumer spends by Network International, overall market spending in the UAE had increased by 10% YoY during January-September 2015. The report, based on credit and debit card transactions in the UAE, had found that growth in tourist spends for 2015 versus 2014 had turned positive for the first time in 3Q2015, bolstered by an increase in spending by the top three overall spenders – the US (15%), Saudi Arabia (29%) and the UK (17%). In terms of nationalities, declines in overall Russian (-57%) and Chinese spending (-20%) was balanced by a 67% growth in Qatari and 38% growth in Nigerian spends across most sectors. (GulfBase.com)  Fitch affirms Ras Al Khaimah at 'A', outlook stable – Fitch Ratings has affirmed Ras Al Khaimah’s (RAK) long-term foreign and local currency issuer default ratings (IDRs) at ‘A’. The outlook is stable. The issue ratings on RAK Capital’s senior unsecured foreign currency bonds have also been affirmed at ‘A’. The short-term foreign currency IDR has been affirmed at ‘F1’. The UAE country
  6. 6. Page 6 of 7 ceiling has been affirmed at ‘AA+’; this ceiling applies to Ras al Khaimah and Abu Dhabi. The ratings balance the benefits of RAK’s membership of the UAE, its low debt and solid fiscal performance against lingering weaknesses in data quality and the macro policy framework. The Emirate derives substantial support from its membership of the UAE federation. RAK shares the UAE monetary and exchange-rate system with a credible US dollar peg and absence of exchange controls. The UAE country ceiling of ‘AA+’ benefits from Abu Dhabi’s (AA/Stable) strong external finances. RAK has no need for foreign exchange reserves and its rating is not constrained by external factors, compensating for the lack of external sector data. At an expected 21.2% of the GDP in 2015, RAK’s debt is well below the ‘A’ median of 44.4% and Fitch expects it to fall over its forecast horizon by 2017- end. Fitch projects a budget surplus of 1.1% of the GDP in 2015, up from 0.8% in 2014 and better than its previous forecast of a small deficit. (Fitch Ratings press release)  DLD: Saudis among top Gulf investors in Dubai Property market – According to a report issued by the Dubai Land Department (DLD), Saudi Arabian investors in Dubai’s property market topped other Gulf investors, except those from the UAE. As per the report, the UAE investors maintained their position at the forefront and that they invested nearly $4.35bn, followed by Qataris at the third place, then Kuwaitis, Omanis and citizens of Bahrain. The report indicated that the total value of Gulf investments in Dubai real estate amounted to $6.5bn during 9M2015. (GulfBase.com)  NBAD unveils new five-year strategy for Egyptian market – National Bank of Abu Dhabi (NBAD) celebrated its 40th anniversary in the Egyptian market on November 11, 2015, highlighting successes and unveiled a new five-year strategy focused on a modernized business model and directing foreign currencies into the Egyptian market. NBAD’s strategy for the years ahead will focus on modernizing its retail offering via alternative electronic channels, targeting Egyptian expatriates in the Gulf as well as Egyptian export-oriented SMEs, and enhancing its wholesale proposition, based on a network of core clients across the West-East corridor. (Bloomberg)  Kuwait may issue dollar or dinar bonds – Kuwaiti Finance Minister Anas Al-Saleh has said that Kuwait may issue US dollar- or dinar- denominated bonds to financial institutions to help cover fiscal deficit caused by low oil prices. Kuwait’s budget deficit during April-August 2015 had stood at KD1.09bn, after a deduction for the Future Generations Fund, which is part of its sovereign wealth fund. (Reuters)  Kuwait CMA opens door for more Sukuk issues – Kuwait’s Capital Market Authority (CMA) has released rules covering issuance of Islamic bonds in a move that could facilitate sale of Sukuks by both the government and corporate organizations. The rules issued by the CMA this week aim to provide a legal basis for issues. The rules outline conditions that Sukuk must meet to be tradable, and describe specific formats such as instruments with perpetual tenures and those which can be converted into shares. As per the rules, Sukuk issues must be approved by both the CMA and central bank, which set out the obligations and powers of custodians of such instruments. Kuwait Finance House CEO Mazin Al Nahedh said the new CMA rules will encourage corporate issuance of Sukuk within Kuwait, allowing borrowers to tap ample investor demand inside the country. (Reuters)  Kuveyt Turk mandates banks for Sukuk – Turkish Islamic bank Kuveyt Turk has mandated six institutions for a Sukuk issue with a value of up to $400mn and a maturity of 10 years. The bank has hired KFH Capital, Dubai Islamic Bank, HSBC, Noor Bank, QInvest and Emirates NBD as joint lead managers. Kuveyt Turk is 62% owned by Kuwait Finance House. (Reuters)  Oman Air to invest OMR3mn in modern air flight training center – Oman Air will embark on a new phase in its expansion program on November 18, when it starts construction of a state-of-the-art Oman Air Flight Training Centre (OAFTC). The center will be located adjacent to the Oman Air headquarters in Muscat. The airline’s investment in this training facility will add an important milestone in its contribution toward the development of Oman. Oman Air will invest OMR3mn in constructing and developing the OAFTC. (GulfBase.com)  City Centre Muscat completes OMR35mn expansion – Dubai’s Majid Al Futtaim (MAF) has said that it has completed the final phase of its OMR35mn expansion project at City Centre Muscat adding 60 new retail stores, including 12 fashion lifestyle and food & beverages brands, making their debut in Oman. Through its expansion, City Centre Muscat has created up to 1,350 new jobs for the community. (GulfBase.com)  Ithmaar Bank reports $3.55mn net loss in 3Q2015 – Ithmaar Bank reported a net loss of $3.55mn in 3Q2015 as compared to a net profit of $1.26mn in 3Q2014. Operating income had reached $53.65mn in 3Q2015 as compared to $61.67mn in 3Q2014. The bank’s total assets were recorded at $8.29bn as of September 30, 2015 as compared to $7.86bn on December 31, 2014. Murabaha & other financing had reached $3.28bn, while customers’ current accounts and due to banks, financial & other institutions had stood at $1.36bn and $1.73bn, respectively. Loss per share had amounted to 0.12 US cents in 3Q2015 versus EPS of 0.04 US cents in 3Q2014. (Bahrain Bourse)  UGB 9M2015 net profit drops 62% YoY – United Gulf Bank (UGB) reported $6.0mn net profit attributable to shareholders of the parent company for 9M2015 as compared to $15.7mn in 9M2014, representing a decline of 62% YoY. Total income had fallen to $104.9mn in 9M2015 as compared to $117.8mn in 9M2014. UGB’s total assets had stood at $2.6bn as of September 30, 2015 as compared to $2.8bn on December 31, 2014. Loans & receivables had reached at $769.0mn, while deposits from customers and due to banks & other financial institutions had stood at $433.9mn and $716.9mn, respectively. EPS amounted to 0.73 US cents in 9M2015 versus 1.93 US cents in 9M2014. (Bahrain Bourse)  ASBB reports BHD4.75mn net profit in 3Q2015 – Al Salam Bank - Bahrain (ASBB) has reported a net profit of BHD4.75mn in 3Q2015 as compared to BHD4.12mn in 3Q2014. The bank posted a total operating income of BHD12.58mn in 3Q2015 as compared to BHD14.27mn in 3Q2014. ASBB’s total assets stood at BHD1.78bn at September 30, 2015-end as compared to BHD1.96bn at December 31, 2014-end. Murabaha financing and Mudaraba financing reached BHD365.70mn and BHD230.59mn, respectively, while Murabaha and Wakala payables to banks & nonbanks had stood at BHD98.80mn & BHD886.18mn. EPS amounted to 2.2 fils in 3Q2015 versus 1.9 fils in 3Q2014. (Bahrain Bourse)  CBB plans to establish centralized Shari’ah board by 2015-end – The Central Bank of Bahrain (CBB) is planning to establish a centralized Shari’ah board by 2015-end to oversee the Kingdom’s Islamic finance sector. The board would be the second of its kind in the Gulf region. The Bahraini central bank already has a Shari’ah board, but its scope has been limited to vetting its own products. The central bank’s Shari’ah board, meanwhile, will have the final say on how the ruling is implemented, although there is a mechanism to address differences of opinion between the two boards. (Reuters)
  7. 7. Contacts Saugata Sarkar Sahbi Kasraoui Shahan Keushgerian Head of Research Manager – HNWI Senior Research Analyst Tel: (+974) 4476 6534 Tel: (+974) 4476 6544 Tel: (+974) 4476 6509 saugata.sarkar@qnbfs.com.qa sahbi.alkasraoui@qnbfs.com.qa shahan.keushgerian@qnbfs.com.qa QNB Financial Services SPC Contact Center: (+974) 4476 6666 PO Box 24025 Doha, Qatar Disclaimer and Copyright Notice: This publication has been prepared by QNB Financial Services SPC (“QNBFS”) a wholly-owned subsidiary of QNB SAQ (“QNB”). QNBFS is regulated by the Qatar Financial Markets Authority and the Qatar Exchange QNB SAQ is regulated by the Qatar Central Bank. This publication expresses the views and opinions of QNBFS at a given time only. It is not an offer, promotion or recommendation to buy or sell securities or other investments, nor is it intended to constitute legal, tax, accounting, or financial advice. QNBFS accepts no liability whatsoever for any direct or indirect losses arising from use of this report. Any investment decision should depend on the individual circumstances of the investor and be based on specifically engaged investment advice. We therefore strongly advise potential investors to seek independent professional advice before making any investment decision. Although the information in this report has been obtained from sources that QNBFS believes to be reliable, we have not independently verified such information and it may not be accurate or complete. QNBFS does not make any representations or warranties as to the accuracy and completeness of the information it may contain, and declines any liability in that respect. For reports dealing with Technical Analysis, expressed opinions and/or recommendations may be different or contrary to the opinions/recommendations of QNBFS Fundamental Research as a result of depending solely on the historical technical data (price and volume). QNBFS reserves the right to amend the views and opinions expressed in this publication at any time. It may also express viewpoints or make investment decisions that differ significantly from, or even contradict, the views and opinions included in this report. This report may not be reproduced in whole or in part without permission from QNBFS COPYRIGHT: No part of this document may be reproduced without the explicit written permission of QNBFS. Page 7 of 7 Rebased Performance Daily Index Performance Source: Bloomberg Source: Bloomberg Source: Bloomberg (#Market closed on November 13, 2015) Source: Bloomberg (*$ adjusted returns) 80.0 100.0 120.0 140.0 160.0 180.0 Oct-11 Oct-12 Oct-13 Oct-14 Oct-15 QSE Inde x S&P Pa n Ara b S&P GCC (0.6%) (0.2%) 0.0% 0.1% (0.3%) (0.3%) (1.5%) (2.4%) (1.6%) (0.8%) 0.0% 0.8% SaudiArabia Qatar Kuwait Bahrain Oman AbuDhabi Dubai Asset/Currency Performance Close ($) 1D% WTD% YTD% Global Indices Performance Close 1D%* WTD%* YTD%* Gold/Ounce 1,083.92 (0.1) (0.5) (8.5) MSCI World Index 1,654.30 (1.0) (2.9) (3.2) Silver/Ounce 14.26 (0.2) (3.5) (9.2) DJ Industrial 17,245.24 (1.2) (3.7) (3.2) Crude Oil (Brent)/Barrel (FM Future) 43.61 (1.0) (8.0) (23.9) S&P 500 2,023.04 (1.1) (3.6) (1.7) Crude Oil (WTI)/Barrel (FM Future) 40.74 (2.4) (8.0) (23.5) NASDAQ 100 4,927.88 (1.5) (4.3) 4.1 Natural Gas (Henry Hub)/MMBtu 2.01 (0.2) (7.5) (32.9) STOXX 600 369.53 (1.3) (2.8) (4.4) LPG Propane (Arab Gulf)/Ton 40.25 (3.6) (9.0) (17.9) DAX 10,708.40 (1.2) (2.6) (3.6) LPG Butane (Arab Gulf)/Ton 59.50 (2.7) (6.7) (9.2) FTSE 100 6,118.28 (1.0) (2.6) (9.1) Euro 1.08 (0.4) 0.3 (11.0) CAC 40 4,807.95 (1.5) (3.6) (0.3) Yen# 122.61 0.0 (0.4) 2.4 Nikkei 19,596.91 (0.6) 1.9 9.1 GBP 1.52 0.0 1.2 (2.2) MSCI EM 821.12 (1.5) (3.7) (14.1) CHF 0.99 (0.6) (0.1) (1.2) SHANGHAI SE Composite 3,580.84 (1.4) (0.6) 7.8 AUD 0.71 0.0 1.2 (12.8) HANG SENG 22,396.14 (2.2) (2.1) (5.1) USD Index 99.00 0.4 (0.2) 9.7 BSE SENSEX 25,610.53 (0.8) (2.5) (10.9) RUB 66.74 0.1 3.5 9.9 Bovespa 46,517.04 (2.2) (2.3) (35.7) BRL 0.26 (2.0) (2.0) (31.1) RTS 814.93 (2.0) (4.6) 3.1 129.0 109.5 106.9