Qatar: Daily Market Report - 20 February

Transcription

1. QSE Intra-Day Movement 10 ,060 10,040 10,020 10,000 9,980 9:30 10:00 10:30 11:00 11:30 12:00 12:30 13:00 Market Indicators 19 Feb 19 18 Feb 19 %Chg. Value Traded (QR mn) Exch. Market Cap. (QR mn) Volume (mn) Number of Transactions Companies Traded Market Breadth 263.3 565,376.8 8.9 5,541 44 13:27 306.9 569,583.3 10.9 6,231 44 26:16 (14.2) (0.7) (18.6) (11.1) 0.0 – Market Indices Qatar Commentary The QE Index declined 0.5% to close at 9,982.3. Losses were led by the Real Estate and Banks & Financial Services indices, falling 1.9% and 0.8%, respectively. Top losers were Alijarah Holding and Qatar Cinema & Film Distribution Company, falling 5.6% and 5.2%, respectively. Among the top gainers, Islamic Holding Group gained 5.0%, while Qatar Fuel Company was up 1.8%. Total Return All Share Index Banks Industrials Transportation Real Estate Insurance Telecoms Consumer Al Rayan Islamic Index Close 1D% WTD% YTD% TTM P/E 17,672.08 3,002.23 3,616.16 3,177.93 2,153.63 2,168.65 2,945.89 937.51 7,382.40 3,873.12 (0.5) (0.7) (0.8) (0.4) (0.6) (1.9) 0.2 (0.4) 0.9 (0.3) 0.4 (0.3) (0.8) 1.9 (2.2) (3.0) 0.5 (0.5) 3.8 1.1 (2.6) (2.5) (5.6) (1.2) 4.6 (0.8) (2.1) (5.1) 9.3 (0.3) 14.2 14.8 13.4 15.1 12.5 19.4 16.1 19.8 15.1 14.3 ## # 1D% Bahrain 0.51 9.8 303.6 11.2 Dubai 1.20 4.3 9,459.2 (4.8) DP World Dubai 16.15 3.5 64.6 (5.6) Emaar Properties Dubai 4.33 3.1 16,560.6 4.8 Etihad Etisalat Co. Saudi Arabia 18.16 2.5 10,014.8 9.5 # 1D% Vol. ‘000 YTD% 0.14 (4.2) 15,313.9 (16.9) 32.05 (3.8) 314.4 19.6 1.10 (3.1) 508.2 (25.9) GCC Commentary GCC Top Gainers Exchange Saudi Arabia: The TASI Index fell 0.6% to close at 8,516.6. Losses were led by the Food & Beverages and Diversified Financials indices, falling 2.1% and 1.0%, respectively. Allied Coop. Insurance fell 4.9%, while Savola Group was down 3.8%. BBK Dubai Investments Dubai: The DFM Index gained 0.6% to close at 2,565.9. The Invest. & Fin. Services index rose 3.4%, while the Real Estate & Const. index gained 1.8%. Ajman Bank rose 4.8%, while Dubai Investments was up 4.3%. Abu Dhabi: The ADX benchmark index fell 0.1% to close at 5,035.1. The Inv. & Fin. Services index declined 0.6%, while the Energy index fell 0.3%. Commercial Bank International declined 10.0%, while Sudatel Telecomm. Group Co. was down 4.8%. ## Close YTD% GCC Top Losers Exchange Kuwait: The KSE Index rose 0.5% to close at 4,782.8. The Financial Services index gained 1.1%, while the Oil & Gas index rose 0.9%. Tamdeen Investment Co. gained 13.5%, while Ithmaar Holding Co. was up 8.5%. Bank Dhofar Oman Savola Group Saudi Arabia Oman: The MSM Index fell 0.4% to close at 4,056.9. Losses were led by the Financial and Services indices, falling 0.4% each. Bank Dhofar fell 4.2%, while Al Madina Investment was down 3.5%. Shell Oman Marketing Co. Oman Yanbu Cement Co. Saudi Arabia 28.70 (2.9) 197.9 19.6 Southern Prov. Cement Saudi Arabia 41.00 (2.3) 145.1 11.3 Bahrain: The BHB Index gained 1.0% to close at 1,392.6. The Commercial Bank index rose 1.9%, while the Industrial index gained 0.5%. BBK rose 9.8%, while Ithmaar Holding was up 6.3%. Source: Bloomberg (# in Local Currency) (## GCC Top gainers/losers derived from the S&P GCC Composite Large Mid Cap Index) QSE Top Gainers Islamic Holding Group Qatar Fuel Company Gulf Warehousing Company Al Khaleej Takaful Insurance Co. Medicare Group Close* 21.99 189.00 41.20 9.11 65.40 1D% 5.0 1.8 1.7 1.1 0.9 Vol. ‘000 25.2 271.3 27.0 32.0 19.5 YTD% 0.6 13.9 7.1 6.1 3.6 QSE Top Losers QSE Top Volume Trades Close* 15.00 12.20 16.60 8.05 9.35 1D% (1.9) 0.7 (0.2) (0.6) (1.0) Vol. ‘000 1,850.1 1,672.6 757.2 690.7 607.7 YTD% 1.7 (8.6) 10.4 3.1 5.8 QSE Top Value Trades United Development Company Qatar Aluminium Manufacturing Mesaieed Petrochemical Holding Vodafone Qatar Aamal Company Close Vol. ‘000 Alijarah Holding Qatar Cinema & Film Distribution Mannai Corporation Qatar Navigation Ezdan Holding Group Qatar Fuel Company QNB Group United Development Company Qatar Aluminium Manufacturing Industries Qatar Close* 8.77 16.49 55.50 66.22 13.08 1D% (5.6) (5.2) (3.0) (2.6) (2.3) Vol. ‘000 107.7 0.0 2.7 0.9 209.0 YTD% (0.2) (13.3) 1.0 0.3 0.8 Close* 189.00 174.75 15.00 12.20 130.30 1D% 1.8 (1.2) (1.9) 0.7 (0.5) Val. ‘000 50,879.4 46,010.1 27,958.1 20,360.4 13,953.2 YTD% 13.9 (10.4) 1.7 (8.6) (2.5) P/E** P/B** 14.2 8.2 14.1 18.5 15.8 8.4 9.3 1.5 0.9 1.4 1.9 0.8 0.8 0.9 Source: Bloomberg (* in QR) Regional Indices Qatar* Dubai Abu Dhabi Saudi Arabia Kuwait Oman Bahrain Close 1D% WTD% MTD% YTD% 9,982.25 2,565.85 5,035.13 8,516.60 4,782.77 4,056.90 1,392.60 (0.5) 0.6 (0.1) (0.6) 0.5 (0.4) 1.0 0.4 1.3 (0.0) (1.3) (0.3) (1.3) 1.5 (6.9) (0.1) (0.2) (0.5) (0.3) (2.6) 0.1 (3.1) 1.4 2.4 8.8 0.9 (6.2) 4.1 Exch. Val. Traded ($ mn) 72.05 46.76 31.79 625.78 74.97 10.36 6.62 Exchange Mkt. Cap. ($ mn) 155,309.0 93,627.9 137,722.4 537,772.6 32,998.7 17,754.1 21,292.7 Dividend Yield 4.4 5.4 4.8 3.3 4.3 6.4 5.9 Source: Bloomberg, Qatar Stock Exchange, Tadawul, Muscat Securities Market and Dubai Financial Market (** TTM; * Value traded ($ mn) do not include special trades, if any) Page 1 of 7
2. Qatar Market Commentary  The QE Index declined 0.5% to close at 9,982.3. The Real Estate and Banks & Financial Services indices led the losses. The index fell on the back of selling pressure from Qatari and GCC shareholders despite buying support from non-Qatari shareholders.  Alijarah Holding and Qatar Cinema & Film Distribution Company were the top losers, falling 5.6% and 5.2%, respectively. Among the top gainers, Islamic Holding Group gained 5.0%, while Qatar Fuel Company was up 1.8%.  Volume of shares traded on Tuesday fell by 18.6% to 8.9mn from 10.9mn on Monday. Further, as compared to the 30-day moving average of 9.0mn, volume for the day was 1.8% lower. United Development Company and Qatar Aluminium Manufacturing Company were the most active stocks, contributing 20.8% and 18.8% to the total volume, respectively. Overall Activity Buy %* Sell %* Net (QR) Qatari Individuals 37.14% 40.23% (8,145,896.32) Qatari Institutions 23.70% 27.06% (8,826,173.14) Qatari 60.84% 67.29% (16,972,069.46) GCC Individuals 0.88% 0.35% 1,419,416.97 GCC Institutions 1.69% 5.34% (9,629,876.89) GCC 2.57% 5.69% (8,210,459.92) Non-Qatari Individuals 7.75% 8.82% (2,815,225.15) Non-Qatari Institutions 28.84% 18.20% 27,997,754.53 Non-Qatari 36.59% 27.02% 25,182,529.38 Source: Qatar Stock Exchange (* as a % of traded value) Earnings Releases, Global Economic Data and Earnings Calendar Earnings Releases Company Market Rabigh Refining & Petrochemical * Currency Revenue (mn) 4Q2018 % Change YoY Operating Profit (mn) 4Q2018 % Change YoY Net Profit (mn) 4Q2018 % Change YoY -53.0% Saudi Arabia SR 40,998.0 19.8% 1,016.0 -40.4% 669.0 Al Dhafra Insurance* Abu Dhabi AED 333.5 -19.7% – – 54.2 5.1% Abu Dhabi National Takaful Co.* Abu Dhabi AED 383.3 2.6% 135.3 5.9% 68.3 15.7% Actual Consensus Previous Source: Company data, DFM, ADX, MSM, TASI, BHB. (*Financials for FY2018) Global Economic Data Date Market Source Indicator Period 02/19 UK UK Office for National Statistics Jobless Claims Change January 14.2k – 20.2k 02/19 UK UK Office for National Statistics Employment Change 3M/3M December 167k 151k 132k Source: Bloomberg (s.a. = seasonally adjusted; n.s.a. = non-seasonally adjusted; w.d.a. = working day adjusted) Earnings Calendar Tickers Company Name Date of reporting 4Q2018 results No. of days remaining Status QAMC Qatar Aluminum Manufacturing Company 20-Feb-19 0 Due QOIS Qatar Oman Investment Company 20-Feb-19 0 Due MERS Al Meera Consumer Goods Company 24-Feb-19 4 Due QFLS Qatar Fuel Company 25-Feb-19 5 Due BRES Barwa Real Estate Company 25-Feb-19 5 Due QISI The Group Islamic Insurance Company 25-Feb-19 5 Due QNNS Qatar Navigation (Milaha) 25-Feb-19 5 Due QCFS Qatar Cinema & Film Distribution Company 26-Feb-19 6 Due MCCS Mannai Corporation 26-Feb-19 6 Due AHCS Aamal Company 27-Feb-19 7 Due QGRI Qatar General Insurance & Reinsurance Company 4-Mar-19 12 Due AKHI Al Khaleej Takaful Insurance Company 5-Mar-19 13 Due SIIS Salam International Investment Limited 6-Mar-19 14 Due DBIS Dlala Brokerage & Investment Holding Company 13-Mar-19 21 Due Source: QSE Page 2 of 7
3. News Qatar  Qatari CEO survey reflects positive economic outlook – Most of the executives interviewed for the 2019 edition of the ‘Business Barometer: Qatar CEO Survey’ carried out by Oxford Business Group (OBG) were positive about the economic outlook for the coming months, despite having had to grapple with fluctuating commodity prices and a regional embargo over the past 18 months. As part of its survey on the economy, the global research and consultancy firm asked more than 100 C-suite executives from across Qatar’s industries a wide-ranging series of questions on a face-to-face basis aimed at gauging business sentiment. When asked, 84% of respondents said they felt positive or very positive about local business conditions in the near term. Just over half (51%) of those interviewed told OBG that they expected full-year economic growth to reach between 2% and 3% in 2019, just below the IMF’s forecast of 3.1%, while almost one-fifth (18%) gave an estimation of between 3% and 4%. (Gulf-Times.com)  AKHI’s board meets to discuss the financial statements ended December 31, 2018 on March 5, 2019 – Al Khaleej Takaful Insurance Company (AKHI) announced that its board of directors will meet on March 5, 2019 to discuss and adopt financial statements of the company for the period ended December 31, 2018. (QSE)  QEWS to hold its AGM and EGM on March 6, 2019 – Qatar Electricity & Water Company’s (QEWS) board of directors invited its shareholders to attend the Extraordinary General Assembly Meeting (EGM) and Ordinary General Assembly Meeting (AGM), to be held on March 6, 2019. The AGM will be held immediately followed by the EGM. Agenda of the EGM are as follows: (i) Approve the amendment of the text of Article (6) of the Articles of Association of the company to amend the nominal value of the share from ‘QR 10’ to ‘QR 1’, pursuant to the decision of the board of directors of QFMA at its fourth meeting on December 16, 2018, Issued No. M-3/2019 dated 6/1/2019, in accordance with the proposal to amend the texts attached to the implementation schedule, (ii) Approve the amendment of the provisions of Article (7) of the Articles of Association of the company in line with the recommendations of the Qatar Stock Exchange on enhancing the investment attractiveness of the listed companies and the decision of the board of directors of Qatar Financial Markets Authority No. (1) of 2016 regarding the acquisition of shares of companies listed on the Qatar Stock Exchange The decision of the Commission, by adding a new paragraph specifying the percentage of ownership of the company shares not more than 1% of the total shares, in accordance with the proposal to amend the texts annexed to the implementation schedule, (iii) Approval of the amendment of the provisions of Articles 26, 27, 29 and 31 of the statute concerning the composition of the board of directors and the appointment of the representatives of the state to the BoD in accordance with the proposal to amend the texts annexed to the implementation schedule, and (iv) The delegation of the President of the board of directors to make amendments and take all necessary procedures with the competent authorities in this regard. (QSE)  Alijarah Holding’s shareholders approve adjusting shares nominal value – Alijarah Holding’s shareholders approved adjusting nominal value of shares in the company as per directions of Qatar Financial Markets Authority. (Zawya)  Qatar’s industrial production index edges up YoY in December 2018 – Qatar’s industrial production index (IPI) of December 2018 amounted to 105.6 points, a decrease by 0.6% compared to the previous month (November 2018), and an increase by 0.3% compared to the corresponding month of 2017, according to data published by Planning and Statistics Authority (PSA). The mining and quarrying index, which has a relative weight of 83.6%, saw a 1.3% rise YoY in December 2018 owing to a 1.4% increase in the extraction of crude petroleum and natural gas, even as other mining and quarrying plummeted 5.1%. On a monthly basis, the index showed a 0.3% dip as the extraction of crude petroleum and natural gas contracted 0.3% and other mining and quarrying by 1.1%. (Qatar Tribune, GulfTimes.com)  PPP to boost private sector contribution to GDP, says Qatar Chamber’s official – Opening wider opportunities to participate in government-led projects will lead to an increase in the private sector’s contribution to Qatar’s GDP, according to Qatar Chamber’s First Vice Chairman, Mohamed bin Towar AlKuwari. Al-Kuwari said, “Now is the right time for the publicprivate partnership model, which is a successful model worldwide. I believe we will see an increase in private sector contribution to Qatar’s GDP in the near future. And it should be because the government and its other agencies are supportive of the private sector taking the lead role.” Al-Kuwari also stressed that the private sector is now ready to manage, invest, and develop projects, such as the Tawteen initiative, which aims to localize the energy sector’s supply chain and expand Qatar’s small and medium-sized enterprise (SME) base. “I believe in the vision of HH the Amir, Sheikh Tamim bin Hamad Al-Thani to open a wider way for the private sector and involve it in partnership projects with the government. This is the right time,” Al-Kuwari stressed. (Gulf-Times.com)  EY: QAMC’s IPO is highest valued in the Middle East – Qatar witnessed the highest valued IPO (Initial Public Offering) in 2018 in the Middle East and North Africa (MENA) region with the listing of Qatar Aluminum Manufacturing Company (QAMC) on the Qatar Stock Exchange (QSE), raising $745.6mn during the fourth quarter, according to Ernst and Young (EY). FTSE Russell announced the entry of QAMC to the FTSE Index within the first week of trading, owing to the positive response generated by the IPO (which was 2.5 times oversubscribed). The QSE has performed well in 2018, with prospects of inflows from investors tracking emerging-market indexes after the relaxation on foreign ownership curbs. According to the Qatar Financial Centre Authority, overseas institutional investors were net buyers of about $2.3bn on the QSE during 2018, which was more than triple the foreign flows into the neighboring countries. "The successful subscription of QAMC reflects the strength of Qatar’s economy, and the government’s mandate towards supporting capital markets and privatization as it Page 3 of 7
4. pursues diversification of the economy ," according to Phil Gandier, MENA Transactions Leader, EY. (Gulf-Times.com)  The Commercial Bank announces its support for Qatar Petroleum’s ‘Tawteen’ – The Commercial Bank has announced its support for ‘Tawteen’, the ‘Localisation Programme for Services and Industries in the Energy Sector’ by Qatar Petroleum. The Tawteen initiative aims to create valuable business prospects in Qatar for local and international entrepreneurs, contribute to the sector’s supply chain and provide superior employment opportunities. The Commercial Bank will play a crucial role in this, with the bank’s relationship managers being effectively trained to offer entrepreneurs all they need to succeed; from working capital and cash flow management to financial management and technological solutions. (Gulf-Times.com)  QEWS, QEERI team up to face country’s water security challenge – Qatar Electricity and Water Company (QEWS), and Qatar Environment and Energy Research Institute (QEERI), part of Hamad Bin Khalifa University (HBKU), have signed a 20-year research collaboration agreement to address the country’s water security grand challenge, as mentioned in the Qatar National Vision 2030 mandate. The agreement, signed by QEWS’ General Manager and Managing Director, Fahad Hamad Al-Mohannadi, and QEERI’s Executive Director, Marc Vermeersch, will enable QEWS to leverage its scientific and technical expertise, and will see the construction of a pilot plant for desalination technology development (thermal and membrane). (Gulf-Times.com)  QSE announces technical issue in displaying the index value has been fixed – Qatar Stock Exchange announced that the technical issue, which happened to the index display of the market watch screen during the trading session of February 18, 2019, has been fixed. (QSE)  Qatar-Germany bilateral ties gain momentum – The Sixth Session of Qatari-German Joint Commission on Economic, Trade and Technical cooperation began in Berlin to discuss the development and promotion of bilateral economic and trade relations. The session was co-chaired by HE Ali bin Ahmed Al Kuwari, Minister of Commerce and Industry, and Thomas Bareiß, Germany’s Parliamentary State Secretary at the Federal Ministry for Economic Affairs and Energy. In his opening speech, HE Al Kuwari hailed the close relations between Qatar and Germany, noting that bilateral ties have gained momentum following the historic visit of HH the Amir, Sheikh Tamim bin Hamad Al Thani to Germany last September, during which HH the Amir announced Qatar’s intention to invest EUR10bn to support the German economy over the next five years. Several important agreements were signed during the session, including one relating to the establishment of the QatariGerman Businessmen Council, which will play a key role in bolstering joint efforts to develop strategic bilateral cooperation. HE Al Kuwari highlighted Qatar’s successful participation in the Hannover International Trade Fair marked a new milestone in the historic journey of Qatari-German partnerships. The Minister noted that Qatar and Germany enjoy close political and economic ties, which have reflected positively on the value of bilateral trade, which reached EUR1.9bn in 2018, accounting for 1.8% of Qatar’s total foreign trade. (Peninsula Qatar) International  US consumers forecast more spending than a year ago – US consumers expect to spend more money in 2019 than they did a year ago, data from the Federal Reserve Bank of New York showed. Households expect larger increases in spending than they forecast the year prior on items including clothing, housing and transportation, data from the Survey of Consumer Expectations conducted in December showed. People with a high school education or less, in particular, drove the increase, the New York Fed stated. The average expected growth in spending in 2019 rose to 2.8% from 2.3% the year prior, according to the survey. (Reuters)  UK jobs market defies economy's Brexit slowdown – British workers’ pay growth maintained its fastest pace in a decade in late 2018 and job creation stayed strong, data showed, suggesting the labor market was buoyant ahead of Brexit as the broader economy slowed. Total earnings, including bonuses, rose by an annual 3.4% in the three months to December, matching their fastest pace of growth since mid-2008. The increase was a touch below a forecast for a pick-up to 3.5% in a Reuters poll of economists. Average weekly earnings excluding bonuses also rose by 3.4% on the year, the Office for National Statistics stated, in line with the poll forecast. Britain’s strong labor market has defied a slowdown in the economy since the 2016 referendum vote to leave the European Union (EU). Figures showed the number of people in work rose by 167,000 in the three months to December, the biggest increase since the first quarter of 2018 and stronger than the poll’s forecast of 140,000. (Reuters)  Eurozone’s current account surplus shrinks to two-year low – The adjusted current account surplus of the 19 countries sharing the Euro narrowed to EUR16bn in December from EUR23bn in November, its lowest figure in two years, data from the European Central Bank (ECB) showed. With global trade tensions intensifying and Chinese economic growth slowing, European exports have taken a hit in recent months and the bloc’s trade surplus is declining unexpectedly quickly. In the 12 months to December, the surplus was 3.0% of the bloc’s GDP, down from 3.2% in the preceding 12-month period, with the trade surplus narrowing even more. ECB earlier stated it expected the current account surplus to drop to 2.7% of GDP this year and shrink further to 2.5% by 2021. (Reuters)  Germany, France agrees proposals for Eurozone budget – Germany and France have agreed a proposal for a common Eurozone budget to be used to reward countries that successfully implement economic reforms and to finance strategic investments, German media reported. Handelsblatt newspaper reported that a joint French-German paper proposed that the Eurozone budget should be part of the European Union’s overall budget, but that the 19 members of the common currency area should pay into the joint Eurozone budget in addition to their current contributions to the EU’s. The Frankfurter Allgemeine newspaper noted that a working paper prepared for a Tuesday evening meeting between the German and French finance ministers envisaged the budget being used “to help weak member states with a need to reform.” Other Page 4 of 7
5. Eurozone members would need to back the proposals before they became reality . (Reuters)  China to expand agriculture reforms to bolster rural economy – China will deepen reforms of its agriculture sector to promote its rural economy, the government stated in its first policy statement of 2019, as it seeks to bolster growth and offset trade challenges. Beijing’s statement comes after the world’s No.2 economy saw its weakest growth in 28 years in 2018 and remains entangled in an on-off trade war with Washington. “Under the complicated situation of increasing downward pressure on the economy and profound changes in the external environment, it is of special importance to do a good job in agriculture and rural areas,” the government stated in the document issued by the State Council and published by official news agency Xinhua. Known as the ‘No. 1 document’, this year’s policy reiterated a rural rejuvenation strategy first laid out in 2017 to improve income levels and living standards in China’s countryside. China has been overhauling its crop structure in recent years, reducing support for corn after stocks ballooned, and seeking to promote more planting of oilseeds that it mostly imports. That goal has become increasingly important since a trade war with the US, which led China to slap tariffs on imports of soybeans, tightening domestic supplies. (Reuters)  Japan's exports fall most in two years as China shipments weaken – Japan’s exports posted their biggest decline in more than two years as China-bound shipments tumbled, fuelling concerns about slowing global demand as the business mood sours and orders for the country’s machinery goods fell sharply. Ministry of Finance data showed Japan’s exports fell 8.4% YoY in January, a bigger decline than the 5.5% fall expected by economists in a Reuters poll. It was the sharpest annual decline since October 2016, and followed a revised 3.9% YoY drop last December. The data came after a key gauge of Japanese capital spending showed overseas orders for machinery fell the most in more than a decade in December, and business sentiment soured to a two-year low, as trade friction and slowing Chinese growth bite. Japanese exports to China, Japan’s biggest trading partner, fell 17.4% YoY. While the Lunar New Year holiday weighed on China-bound exports, analysts say there are more concerning drivers behind January’s decline. In contrast, exports to China rose 30% YoY in January 2018. (Reuters)  Japanese firms see flat business spending amid trade frictions, tax hike jitters – Business investment in Japan has been a rare bright spot in the world’s third-largest economy but that may now be fading amid anxiety over an upcoming sales tax hike and global trade frictions, a Reuters monthly corporate survey showed. Just over half, or 56%, predict domestic investment in factories and equipment will be flat in the next fiscal year that starts in April, while 30% project an increase and 14% a decline, the survey of more than 250 companies in Japan found. The outlook for foreign capital expenditure was even less optimistic: two-thirds of firms expect that to remain unchanged, while 19% see a rise and 15% a drop. Figures out on Monday suggested a slump in demand may have already started. Overseas orders for Japanese machinery posted their biggest fall in more than a decade in December and manufacturers expect orders to sink further as trade friction weighs on global demand. (Reuters) Regional  Moody’s: Higher refinancing to boost 2019 global sovereign Sukuk – Sovereign and supranational Sukuk issuance is expected to recover this year and surpass all-time high of $93bn by 2020, Moody’s stated in a report. The deepening of Sukuk market will allow sovereigns to diversify their financing sources. Sovereign Sukuk issuance may breach record levels before 2020 if oil prices remain moderate, the report stated. In 2018, sovereign Sukuk issuance fell 5% to $78bn, but all-time high of issuance was reached in 2012, when short-term issuance mostly from Malaysia’s central bank made up about 65% of total. Malaysia’s government investment issuance is expected to rise to $8.9bn equivalent in 2019 and $15.8bn in 2020 from about $6.6bn in 2018, the Moody’s report stated. Scheduled Gulf Cooperation Council (GCC) Sukuk repayments will increase to an annual average of about $12bn in 2022-2024 from $2.4bn in 2018-2021. Global issuance will recover this year because of higher deficit financing needs amid moderate oil prices particularly in the GCC, the report stated. (GulfTimes.com)  Russia's Putin and Saudi Arabia’s King ready to continue energy cooperation – Russia’s President Vladimir Putin and Saudi Arabia’s King Salman bin Abdulaziz Al Saud, voiced their support for continued coordination on the global energy markets, the Kremlin stated. The Kremlin also stated that the two leaders praised bilateral cooperation between Russia and Saudi Arabia. “Mutual attitude for further strengthening of multifaceted Russia-Saudi Arabia ties has been expressed,” the Kremlin stated. Russia, other leading oil producers and the OPEC have agreed to cut their oil output by a combined 1.2mn barrels per day starting from January in order to balance global oil markets and support prices. The next ministerial OPEC and non-OPEC meeting is due to be held in Vienna in mid-April. (Reuters)  S&P: UAE bank mergers `exception rather than norm' – Bank mergers in the UAE are “the exception rather than the norm” because of their shareholding structures, a Credit Analyst at S&P Global Ratings, Mohamed Damak said. Shareholding structures make it difficult for them to consolidate as familyowned banks are unlikely to talk to governments for mergers. The planned merger between Abu Dhabi Commercial Bank (ADCB), Union National Bank (UNB) and Al Hilal Bank has the “government of Abu Dhabi on both sides of the table,” and it is also similar for First Abu Dhabi Bank (FAB). (Bloomberg)  UAE still expects crude market to be in balance in 1Q2019 – The UAE is currently producing 3.072mn bpd of oil and the oil producers’ output cuts in January have had positive effect, and UAE still expects crude market to be in balance in 1Q2019, Energy Minister, Suhail Al Mazrouei said. UAE, the thirdbiggest producer in OPEC, pumped 3.15mn bpd in January, down 110k bpd from December, according to data compiled by Bloomberg. (Bloomberg)  Dubai’s January CPI falls most in more than three years – Dubai Statistics Center published Dubai's consumer price indices, which showed that January rate of change in general index fell 3.6% YoY as compared to -0.4% a month ago, which was the Page 5 of 7
6. most in more than three years . Prices fell 1.3% MoM in January as compared to -0.4% a month ago. (Bloomberg)  Dubai's Mashreqbank set to raise $500mn in bonds – Dubaibased Mashreqbank is set to raise $500mn in five-year bonds, offering investors 175 basis points over mid-swaps, a document by one of the banks leading the deal showed. Mashreqbank, the largest privately owned bank in the UAE, started marketing the notes earlier on Tuesday with an initial guidance of about 200 basis points over mid-swaps. It has received orders in excess of $1.8bn, according to the document. BNP Paribas, BofA Merrill Lynch, Commerzbank, Mashreqbank, Nomura and Societe Generale have arranged the debt sale. (Reuters)  S&P: Dubai home prices to fall further in 2019 on oversupply – Dubai residential property prices will fall another 5%-10% this year due to a continued gap between supply and demand, before steadying in 2020, S&P Global Ratings stated. The Dubai government’s finances rely in large part on real estate-related income so they could suffer if the downturn is exacerbated, S&P stated. “We continue to have a very grim view of the market,” Associate Director at the rating agency, Sapna Jagtiani said. “Main culprit is supply,” Jagtiani said, adding that other factors were the volatility of oil prices and rising interest rates. S&P stated that the residential property market is unlikely to see a meaningful recovery in 2021. Prices have fallen 25% to 33% in nominal terms since 2014, the report stated. The rating agency also warned of a “stress scenario” in which government and royal family developers such as Emaar Properties, Meraas, Dubai Properties and Nakheel, do not rein in new developments. In such a scenario, residential real estate prices could decline as much as 15% in 2019, and another 5% to 10% in 2020. (Reuters)  Dubai's Meraas said to seek $1.6bn for refinancing – Meraas Holding LLC, a state-backed property developer in Dubai, is in talks with banks to raise about $1.6bn to refinance existing debt, according to sources. The company is seeking to consolidate several loans into a single facility and extend its maturity, sources said. The financing will be raised through Islamic and conventional facilities in Dirhams and Dollars, the sources added. (Bloomberg)  ADIB's net profit rises to AED2,500.1mn in FY2018 – Abu Dhabi Islamic Bank (ADIB) recorded net profit of AED2,500.1mn in FY2018 as compared to AED2,298.8mn in FY2017. Profit from operations, before distribution to depositors came in at AED3,219.6mn in FY2018 as compared to AED2,914.8mn in FY2017. Total assets stood at AED125.2bn at the end of December 31, 2018 as compared to AED123.3bn at the end of December 31, 2017. Ijara Financing stood at AED45.1bn, while Depositor's accounts stood at AED100.4bn at the end of December 31, 2018. EPS came in at AED0.637 in FY2018 as compared to AED0.592 in FY2017. (ADX)  Fitch rates ADNOC ‘AA’, in line with Abu Dhabi's sovereign rating – Abu Dhabi National Oil Company (ADNOC) has been given an ‘AA’ credit rating by Fitch, the highest in the Gulf region and in line with the rating of the Abu Dhabi government which owns the oil giant, Fitch and ADNOC stated. The rating is the first assigned to ADNOC, one of the world’s largest oil producers by volume, and will allow the company wider access to international financial markets and investors. ADNOC’s rating “reflects the company’s high upstream output coupled with low production costs, significant reserves, downstream integration and a conservative financial profile,” Fitch stated. Fitch also cited ADNOC’s geological diversification of onshore and offshore reserves, as well as the company’s low leverage and its “flexible dividend policy,” meaning that it has no obligation to pay out a certain proportion of earnings or a fixed amount. (Reuters)  BlackRock and KKR plan $4bn-$5bn investment in ADNOC pipeline unit – US investment firms BlackRock and KKR & Co are in advanced talks to take a $4bn to $5bn stake in Abu Dhabi National Oil Company’s (ADNOC) pipeline network, the Financial Times reported. The deal could be signed as early as next week, the newspaper reported, citing sources. Stateowned ADNOC is looking to sell a stake in its multibillion-Dollar pipeline infrastructure assets, Reuters reported. ADNOC has started a major transformation drive in the past two years to make it more competitive and commercially focused like other state-owned peers, selling and listing stakes in parts of its business. (Reuters)  Burgan Bank’s FY2018 net profit up 27% – Burgan Bank reported net income for the full year of KD82.6mn in FY2018 as compared to KD65.2mn in FY2017, representing a rise of 27%. Revenue came in at KD265.3mn in FY2018. The bank has recommended dividend of KD0.012 per share and also has declared 5% bonus shares. The profit rise attributes to optimization of resources, improving capitalization, risk profile and operating efficiencies. (Bloomberg)  S&P: Oman set to avoid Bahrain-like crisis and bailout – Oman is unlikely to need a bailout similar to the one that Bahrain got last year as the cash-strapped sultanate should avoid a financial crisis, according to S&P Global Ratings. “They don’t need support at all this year and next year,” a Credit Analyst at S&P Global Ratings, Trevor Cullinan said. “They’re going ahead with fiscal consolidation, their fiscal position is improving,’’ he added. The market is “possibly overly reflecting concerns with Oman,’’ he said. (Bloomberg)  Oman sells OMR56mn 28-day bills at yield of 2.467% – Oman sold OMR56mn Rial ($145 million) of bills due Mar 20 on Feb 18. The bills were sold at a price of 99.811, have a yield of 2.467 percent and will settle on Feb 20.  AUB posts 12.7% YoY rise in net profit to $697.5mn in FY2018 – Ahli United Bank (AUB) recorded net profit of $697.5mn in FY2018, an increase of 12.7% YoY. Net interest income rose 7.3% YoY to $940.5mn in FY2018. Operating income rose 8.1% YoY to $1,210.6mn in FY2018. Total assets stood at $35.5bn at the end of December 31, 2018 as compared to $33.2bn at the end of December 31, 2017. Loans and advances stood at $19.5bn, while customers’ deposits stood at $23.7bn at the end of December 31, 2018. EPS came in at $0.083 in FY2018 as compared to $0.074 in FY2017. (Bahrain Bourse) Page 6 of 7
7. Daily Index Performance Jan-16 Jan-17 QSE Index Jan-18 S &P Pan Arab Jan-19 (0.1%) Dubai Saudi Arabia 70.0 45.0 Jan-15 (0.4%) (0.6%) (0.5%) Abu Dhabi 77.6 0.6% Oman 91.3 1.0% Bahrain 97.1 95.0 0.5% Kuwait 1.5% 1.0% 0.5% 0.0% (0.5%) (1.0%) 120.0 Qatar Rebased Performance S&P GCC Source: Bloomberg Source: Bloomberg Asset/Currency Performance Close ($) 1D% WTD% YTD% Gold/Ounce 1,340.96 1.1 1.5 4.6 MSCI World Index Close 1D%* WTD%* YTD%* 2,075.91 0.2 0.5 Silver/Ounce 15.99 1.1 1.3 3.2 DJ Industrial 10.2 25,891.32 0.0 0.0 11.0 Crude Oil (Brent)/Barrel (FM Future) 66.45 (0.1) 0.3 23.5 Crude Oil (WTI)/Barrel (FM Future) 56.09 0.9 0.9 23.5 S&P 500 2,779.76 0.1 0.1 10.9 NASDAQ 100 7,486.77 0.2 0.2 2.69 3.9 3.9 (17.2) 12.8 368.97 0.1 0.7 LPG Propane (Arab Gulf)/Ton 69.75 1.5 1.5 9.0 8.3 11,309.21 0.4 0.7 6.2 LPG Butane (Arab Gulf)/Ton 87.25 0.9 0.9 25.5 1.13 0.3 0.4 (1.1) FTSE 100 7,179.17 0.5 0.7 9.3 CAC 40 5,160.52 0.2 0.8 Yen 110.63 0.0 0.1 8.1 0.9 Nikkei 21,302.65 0.1 2.0 GBP 1.31 1.1 6.3 1.3 2.4 MSCI EM 1,036.97 0.0 0.6 7.4 CHF 1.00 AUD 0.72 0.3 0.4 (1.9) 2,755.65 0.2 3.0 12.5 0.5 0.3 1.6 HANG SENG 28,228.13 (0.4) 1.2 USD Index 9.0 96.52 (0.4) (0.4) 0.4 BSE SENSEX 35,352.61 (0.2) (1.1) (4.1) RUB 65.77 (0.7) (0.8) (5.7) Bovespa 97,659.15 1.9 0.1 16.0 BRL 0.27 0.3 (0.6) 4.2 1,173.64 (0.3) (0.3) 9.8 Natural Gas (Henry Hub)/MMBtu Euro Source: Bloomberg Global Indices Performance STOXX 600 DAX SHANGHAI SE Composite RTS Source: Bloomberg (*$ adjusted returns) Contacts Saugata Sarkar, CFA, CAIA Shahan Keushgerian Zaid al-Nafoosi, CMT, CFTe Head of Research Senior Research Analyst Senior Research Analyst Tel: (+974) 4476 6534 Tel: (+974) 4476 6509 Tel: (+974) 4476 6535 saugata.sarkar@qnbfs.com.qa shahan.keushgerian@qnbfs.com.qa zaid.alnafoosi@qnbfs.com.qa Mehmet Aksoy, PhD QNB Financial Services Co. W.L.L. Senior Research Analyst Contact Center: (+974) 4476 6666 Tel: (+974) 4476 6589 PO Box 24025 mehmet.aksoy@qnbfs.com.qa Doha, Qatar Disclaimer and Copyright Notice: This publication has been prepared by QNB Financial Services Co. W.L.L. (“QNB FS”) a wholly-owned subsidiary of Qatar National Bank (Q.P.S.C.). QNB FS is regulated by the Qatar Financial Markets Authority and the Qatar Exchange. Qatar National Bank (Q.P.S.C.) is regulated by the Qatar Central Bank. This publication expresses the views and opinions of QNB FS 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. QNB FS 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 QNB FS believes to be reliable, we have not independently verified such information and it may not be accurate or complete. QNB FS 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 QNB FS Fundamental Research as a result of depending solely on the historical technical data (price and volume). QNB FS 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 QNB FS. COPYRIGHT: No part of this document may be reproduced without the explicit written permission of QNB FS. Page 7 of 7