Qatar - Market Review and Outlook

Transcription

1. ` Market Review and Outlook QSE Index and Volume The Qatar Stock Exchange (QSE) Index inched up by 48.33 points, or 0.44% during the week to close at 10,989.76. Market capitalization moved up by 0.43% to QR588.4 billion (bn) versus QR585.9bn at the end of the previous week. Of the 44 listed companies, 19 companies ended the week higher, while 22 fell and 3 remained unchanged. Commercial Bank of Qatar (CBQK) was the best performing stock for the week with a gain of 7.8% on 2.3 million (mn) shares traded. On the other hand, Qatar German Company For Medical Devices (QGMD) was the worst performing stock with a decline of 4.8% on 230,798 shares traded. Masraf Al Rayan (MARK), Commercial Bank of Qatar (CBQK) and QNB Group (QNBK) were the primary contributors to the weekly index gains. MARK was the biggest contributor to the index’s weekly gain, adding 38.5 points to the index. CBQK was the second biggest contributor to the gains, adding 21.9 points to the index. Moreover, QNBK added 18.1 points to the index. On the other hand, Ezdan Holding (ERES) deleted 41.2 points. Trading value during the week decreased by 15.14% to reach QR1.36bn versus QR1.61bn in the prior week. The Banks and Financial Services sector led the trading value during the week, accounting for 35.3% of the total trading value. The Real Estate sector was the second biggest contributor to the overall trading value, accounting for 24.0% of the total trading value. MARK was the top value traded stock during the week with total traded value of QR125.3mn. Trading volume decreased by 9.60% to reach 44.6mn shares versus 49.3mn shares in the prior week. The number of transactions decreased by 13.95% to reach 16,826 transactions versus 19,553 transactions in the prior week. The Real Estate sector led the trading volume, accounting for 37.0%, followed by the Banks and Financial Services sector, which accounted for 24.8% of the overall trading volume. Vodafone Qatar (VFQS) was the top volume traded stock during the week with total traded volume of 7.5mn shares. Foreign institutions remained bullish during the week with net buying of QR40.5mn vs. net buying of QR60.1mn in the prior week. Qatari institutions remained bullish with net buying of QR103.2mn vs. net buying of QR144.5mn the week before. Foreign retail investors turned bullish for the week with net buying of QR1.2mn vs. net selling of QR12.7mn in the prior week. Qatari retail investors remained bearish with net selling of QR144.9mn vs. net selling of QR191.9mn the week before. In 2017 YTD, foreign institutions bought (on a net basis) ~$77mn worth of Qatari equities. 11,080 18,000,000 11,057.83 11,035.61 10,989.76 10,980 9,000,000 10,959.82 10,950.34 10,880 0 22-Jan 23-Jan 24-Jan 25-Jan Volume Market Indicators Value Traded (QR mn) QSE Index Week ended Jan 26 , 2017 1,364.7 Week ended Jan 19 , 2017 1,608.2 588,411.4 585,896.5 0.4 44.6 49.3 (9.6) 16,826 19,553 (13.9) 43 44 (2.3) 19:22 28:15 – Exch. Market Cap. (QR mn) Volume (mn) Number of Transactions Companies Traded Market Breadth Market Indices Total Return ALL Share Index Banks and Financial Services Industrials Transportation Real Estate Insurance Telecoms Consumer Goods & Services Al Rayan Islamic Index Market Indices Weekly Index Performance 7.5% 26-Jan Close 17,780.70 3,006.81 3,094.76 3,404.00 2,601.33 2,358.77 4,488.48 1,276.36 6,319.16 4,099.64 WTD% 0.4 0.3 1.9 (0.7) 0.2 (1.5) (1.1) 1.4 (0.4) 0.5 Chg. % (15.1) MTD% 5.3 4.8 6.3 2.9 2.1 5.1 1.2 5.8 7.1 5.6 YTD% 5.3 4.8 6.3 2.9 2.1 5.1 1.2 5.8 7.1 5.6 6.5% 4.9% 5.0% 3.7% 2.5% 0.4% 0.3% 0.3% 0.0% (2.5%) Regional Indices Qatar (QSE)* Dubai Abu Dhabi Saudi Arabia# Kuwait Oman Bahrain Close WTD% MTD% YTD% 10,989.76 3,701.46 4,624.17 7,128.12 6,852.30 5,750.96 1,300.06 0.4 0.3 (1.7) 3.7 6.5 0.3 4.9 5.3 4.8 1.7 (1.1) 19.2 (0.5) 6.5 5.3 4.8 1.7 (1.1) 19.2 (0.5) 6.5 Weekly Exchange Traded Value ($ mn) 374.78 1,741.45 718.51 6,539.40 1,280.70 56.78 40.81 Exchange Mkt. Cap. ($ mn) 161,577.8 97,389.1# 120,516.2 444,427.4 96,966.5 23,221.6 20,264.3 Abu Dhabi Oman Dubai Qatar (QSE)* Saudi Arabia Bahrain Kuwait (1.7%) TTM P/E** P/B** Dividend Yield 16.1 12.5 11.9 17.7 23.4 10.6 10.7 1.7 1.3 1.5 1.7 1.2 1.2 0.4 3.7 3.6 5.3 3.3 3.5 5.0 4.3 Source: Bloomberg, country exchanges and Zawya (** Trailing Twelve Months; * Value traded ($ mn) do not include special trades, if any; #Data as of January 25, 2017) Page 1 of 6
2. News Economic , Market & Corporate News  QIIK 4Q2016 Profitability Broadly In-Line; DPS Flat at QR4.00/share – Qatar International Islamic Bank (QIIK) reported a net profit of ~QR119mn in 4Q2016, broadly in-line with our expectations (QR126mn) with a variation of -5.6%. Net income decreased by 47% and 7% QoQ and YoY, respectively. Although the financial statements are not yet available, we believe that net provisions came in higher than on our estimate. Dividends remained flat at QR4.00/share in 2016 vs. 2015, implying an attractive yield of 5.9%. Loans exhibited strong performance. Net loans stood at QR27.2bn growing by 1.5% and 8.8% QoQ and YoY, respectively. Customer deposits declined by 1.9% QoQ (flat YoY) to QR26.6bn. As such, the bank’s LDR was elevated to 102% vs. 99% in 3Q2016 (94% at the end of 2015). Capitalization remained robust. QIIK ended 2016 with a CAR of 19.5%. (QNBFS Research, Gulf-Times.com)  Doha Bank’s 4Q2016 earnings falls short of estimates– Doha Bank (DHBK) reported a net profit of QR35mn in 4Q2016, falling short of our expectations (QR211.7mn) and consensus (BBG: QR214.3mn; Reuters: 215.6mn). Net income dropped by 89% and 83% QoQ and YoY, respectively. Although the financial statements are not available yet, we believe the miss was mainly due to a spike in provisions and impairments. DHBK maintained a flat DPS of QR3.00/share in 2016 vs. 2015. A DPS of QR3.00/share translates into payout ratio of 93% and an attractive yield of 7.9%. Management has decided to maintain the yield despite less than ideal results. Loans exhibited decent performance. Net loans increased by 6.5% YoY to QR59.2bn. Deposits followed suit and grew by 5.5% YoY to QR55.7bn. Thus, the LDR remained elevated at 106% vs. 105% in 2015. We maintain our Price Target of QR42.00 for now. DHBK trades at a P/E and P/TB of 9.7x and 1.0x on our 2017 estimates, respectively. (QSE, QNBFS Research, GulfTimes.com)  ABQK’s net profit declines 24.9% QoQ in 4Q2016, missing our estimates – Ahli Bank’s (ABQK) net profit fell 24.9% QoQ (-9.7% YoY) to QR128.28mn in 4Q2016 as compared to QR170.73mn in 3Q2016, missing our estimate of QR153.95mn (-16.7% variation). EPS amounted to QR3.31 in 2016 as compared to QR3.39 in 2015. The Board of Directors also approved the budget and recommended the distribution of cash profit of 10% and bonus shares of 5% from the capital shares of the bank on December 31, 2016 subject to the approval of QCB and the General Assembly Meeting. (QSE, QNBFS Research)  QATI posts net profit of QR1.03bn in 2016 – Qatar Insurance Company’s (QATI) net profit came in at QR1.03bn in 2016 as compared to QR1.04bn in 2015. QATI’s net underwriting results decreased 9% to QR844mn in 2016 as compared to QR926mn in 2015. Investment and other income increased to QR925mn, up 3% YoY. EPS came in at QR4.48 in 2016 as compared to QR4.84 in 2015. (Gulf-Times.com)  QNCD’s net profit rises 15.3% QoQ in 4Q2016 – Qatar National Cement Company (QNCD) reported net profit of QR119.62mn in 4Q2016 as compared to QR103.79mn in 3Q2016, representing an increase of 15.3% QoQ (+14.4% YoY). Earnings per share (EPS) came in at QR8.00 in 2016 as compared to QR7.80 in 2015. The board of directors recommended distribution of 40% cash dividends and 10% bonus shares to the shareholders for 2016. (QSE)  QIGD’s bottom line declines 7.9% QoQ in 4Q2016 – Qatari Investors Group’s (QIGD) net profit fell by 7.9% QoQ to QR56.72mn in 4Q2016 vs. QR61.58mn in 3Q2016. On YoY basis net profit declined 14.0%. The Board of Directors intend to propose distribution of cash dividend of 10% of the nominal         share value (QR1.00 per share) in the forthcoming General Assembly Meeting to be held on February 22, 2017. (QSE, QNBFS Research) IHGS’ net profit rises to QR2.90mn in 4Q2016 – Islamic Holding Group (IHGS) reported net profit of QR2.90mn in 4Q2016 as compared to QR0.25mn in 3Q2016, indicating an increase of 1049.3% QoQ (+1092.3% YoY). EPS came in at QR0.72 in 2016 as compared to QR1.53 in 2015. The board of directors proposed a dividend of 10% in cash per share. (QSE) NLCS’ net profit declines 90% QoQ in 4Q2016 – Alijarah Holding’s (NLCS) net profit fell 90.0% QoQ to QR0.11mn in 4Q2016 vs. QR1.13mn in 3Q2016. The Board of Directors intend to propose distribution of cash dividend of 5% of the nominal share value (QR0.50 per share) in the forthcoming General Assembly Meeting to be held on February 21, 2017. (QSE, QNBFS Research) QFLS to hold board meeting on February 16 – Qatar Fuel Company (QFLS) announced that its board of directors will be holding a meeting on February 16, 2017 to discuss the financial results of the company for the financial year ended December 31, 2016. (QSE) QRDS to hold board meeting on February 22 – Ooredoo (ORDS) announced that its board of directors will be holding a meeting on February 22, 2017 to discuss the financial results of the Company for the financial year ended December 31, 2016. (QSE) MCGS to hold board meeting on February 8 – Medicare Group (MCGS) announced that its board of directors will be holding a meeting on February 8, 2017 to discuss the financial results of the company for the financial year ended December 31, 2016. (QSE) QCFS posts net loss of QR3.31mn in 4Q2016 – Qatar Cinema & Film Distribution Co. (QCFS) reported net loss of QR3.31mn in 4Q2016 as compared to net profit of QR0.22mn in 3Q2016. EPS amounted to QR0.68 in 2016 as compared to QR2.28 in 2015. The board of directors intends to propose a cash dividend of 10% of the nominal share value (QR1.00 per share) to the General Assembly Meeting which will be held on February 12, 2017. (QSE) BRES board to hold meeting on February 7 – Barwa Real Estate Group (BRES) announced that its Board of Directors will be holding a meeting on February 7, 2017 to discuss the financial results of the Company for the financial year ended December 31, 2016. (QSE) Foreigners can own up to 49% in QSE-listed IHG – Foreign shareholders can now hold up to 49% in Islamic Holding Group, which is listed under the banks and financial services segment on the Qatar Stock Exchange. Qatar Central Securities Depository (QCSD) has amended the foreign ownership limit (FOL) in the shares of Islamic Holding Group up to 49% of capital. The QCSD explained that this amendment complies with Law No (9), which allows foreign investors to own a percentage not more than 49% of each company listed on the domestic bourse. This move appears to have come after Islamic Holding Group received an approval from its general assembly to amend the articles of association in line with the law provisions, and following the approval of the Ministry of Economy and Commerce on the amendment. Many listed companies, it is learnt, are in the process of enhancing the FOL in view of the upgrade by MSCI, Standard & Poor’s-Dow Jones and FTSE Russell. (Zawya) Page 2 of 6
3. Qatar Stock Exchange Top Gainers Top Decliners 9 .0% 0.0% 7.8% 5.6% 6.0% -2.0% 3.8% 3.6% -2.7% 3.0% 3.0% -2.9% -3.3% -3.6% -4.0% 0.0% Commercial Ban k of Qat ar Qat ar Masraf Al Rayan Al Meera Qat ar Nat ion al In t ern at ion al Con sumer Goods Cemen t Islamic Ban k -4.8% -6.0% Qatar German Co. Islamic Holdin g for Medical Group Devices Source: Qatar Stock Exchange (QSE) Dlala Holdin g Ezdan Real Estate Medicare Group Source: Qatar Stock Exchange (QSE) Most Active Shares by Value (QR Million) Most Active Shares by Volume (Million) 150.0 9.0 125.3 114.9 7.5 7.5 111.8 100.0 6.0 76.6 4.7 75.3 50.0 3.1 3.0 Barwa Real Est at e Masraf Al Rayan 3.0 0.0 0.0 Masraf Al Rayan Barwa Real Est at e Mazaya Qat ar Commercial Ban k of Qat ar Source: Qatar Stock Exchange (QSE) Ezdan Real Est at e Vodafon e Qat ar Mazaya Qat ar Source: Qatar Stock Exchange (QSE) Investor Trading Percentage to Total Value Traded 100% 16.74% 20.37% 80% 11.01% 10.92% Net Traded Value by Nationality (QR Million) (48) Non-Qatari 427 379 20.37% 60% Ezdan Real Est at e 27.94% 40% 41.35% (42) 51.96% 20% Qatari 987 945 0% Buy Sell Qa t a ri Individua ls Qa t a ri Inst it ut ions Non -Qa t a ri Individua ls Non-Qa t a ri Inst it ut ions Source: Qatar Stock Exchange (QSE) (200) - 200 Net Invest ment 400 600 Tot a l Sold 800 1,000 1,200 Tot a l Bought Source: Qatar Stock Exchange (QSE) Page 3 of 6
4. TECHNICAL ANALYSIS OF THE QSE INDEX Source : Bloomberg The Index ended the week slightly in the green, gaining a marginal 0.44% for the week. The uptick is facing some weakness on lower time frames which may affect the weekly outlook. That been said, we await clearer signals to support the momentum or nullify it. We sustain our support level at 10,500 and the resistance at the 11,500 level. DEFINITIONS OF KEY TERMS USED IN TECHNICAL ANALYSIS RSI (Relative Strength Index) indicator – RSI is a momentum oscillator that measures the speed and change of price movements. The RSI oscillates between 0 to 100. The index is deemed to be overbought once the RSI approaches the 70 level, indicating that a correction is likely. On the other hand, if the RSI approaches 30, it is an indication that the index may be getting oversold and therefore likely to bounce back. MACD (Moving Average Convergence Divergence) indicator – The indicator consists of the MACD line and a signal line. The divergence or the convergence of the MACD line with the signal line indicates the strength in the momentum during the uptrend or downtrend, as the case may be. When the MACD crosses the signal line from below and trades above it, it gives a positive indication. The reverse is the situation for a bearish trend. Candlestick chart – A candlestick chart is a price chart that displays the high, low, open, and close for a security. The ‘body’ of the chart is portion between the open and close price, while the high and low intraday movements form the ‘shadow’. The candlestick may represent any time frame. We use a one-day candlestick chart (every candlestick represents one trading day) in our analysis. Doji candlestick pattern – A Doji candlestick is formed when a security's open and close are practically equal. The pattern indicates indecisiveness, and based on preceding price actions and future confirmation, may indicate a bullish or bearish trend reversal. Shooting Star/Inverted Hammer candlestick patterns – These candlestick patterns have a small real body (open price and close price are near to each other), and a long upper shadow (large intraday movement on the upside). The Shooting Star is a bearish reversal pattern that forms after a rally. The Inverted Hammer looks exactly like a Shooting Star, but forms after a downtrend. Inverted Hammers represent a potential bullish trend reversal. Page 4 of 6
5. Com pany Nam e Price (January 26) % Change WTD % Change YTD Market Cap. QR Million TTM P/E P/B Div. Yield Qatar National Bank 169.80 1.07 4.24 142,577 11.7 2.7 2.1 Qatar Islamic Bank 109.90 0.27 5.77 25,969 12.7 1.8 3.9 Commercial Bank of Qatar 34.75 7.75 6.92 11,350 34.2 0.8 8.3 Doha Bank 38.60 2.80 10.60 9,973 9.5 1.1 7.8 Al Ahli Bank 38.00 (1.30) (2.56) 7,251 11.5 1.5 4.0 Qatar International Islamic Bank 69.70 5.61 10.99 10,550 13.4 1.7 5.7 Masraf Al Rayan 42.50 3.79 13.03 31,875 15.4 2.5 4.1 Al Khalij Commercial Bank 16.37 (1.80) (3.71) 5,893 13.8 0.8 6.1 Qatar First Bank 9.86 (1.99) (4.27) 1,972 N/A 1.0 N/A National Leasing 15.89 (2.46) 3.72 786 156.0 0.8 3.2 Dlala Holding 22.09 (3.33) 2.79 628 N/A 2.4 N/A Qatar & Oman Investment 10.27 (1.25) 3.22 324 28.2 1.0 5.8 Islamic Holding Group Banking and Financial Services 60.90 (3.64) (0.16) 345 84.7 2.5 2.5 Zad Holding 84.50 0.60 (5.27) 1,105 10.3 1.3 4.7 9.85 (4.83) (2.48) 114 N/A 1.2 N/A Salam International Investment 11.60 (0.85) 4.98 1,326 11.3 0.8 8.6 Medicare Group 66.00 (2.65) 4.93 1,858 21.4 1.9 2.7 Qatar Cinema & Film Distribution 28.10 0.00 2.37 176 41.3 1.3 5.3 161.00 (1.23) 10.73 14,686 12.8 2.1 4.7 Widam Food Co. 70.00 2.19 2.94 1,260 14.8 4.4 3.9 Mannai Corp. 84.50 0.00 5.63 3,855 7.8 1.5 5.9 183.90 3.61 4.79 3,678 23.2 2.8 4.9 Qatar German Co. for Medical Devices Qatar Fuel Al Meera Consumer Goods Consum er Goods and Services 249,493 28,058 Qatar Industrial Manufacturing 47.50 0.74 6.74 2,257 11.5 1.5 6.3 Qatar National Cement 91.80 3.03 6.74 5,454 11.5 1.8 4.0 119.80 (0.17) 1.96 72,479 21.7 2.2 4.2 56.50 (2.59) (3.42) 7,024 24.6 2.8 2.2 237.70 (2.18) 4.71 26,147 16.4 3.4 3.2 Aamal 14.96 (2.22) 9.76 9,425 14.8 1.2 N/A Gulf International Services 31.60 0.80 1.61 5,873 35.0 1.5 3.2 Mesaieed Petrochemical Holding Industrials 15.65 0.51 (0.95) 19,661 19.3 1.4 4.5 Qatar Insurance Doha Insurance 87.90 (1.01) 3.66 21,196 19.4 2.7 2.4 17.95 (0.28) (1.37) 898 9.1 0.8 5.6 Qatar General Insurance & Reinsurance 41.50 (2.24) (11.70) 3,632 3.7 0.6 3.3 Al Khaleej Takaful Insurance 20.43 (2.30) (3.18) 522 17.6 1.0 4.9 Qatar Islamic Insurance Insurance 55.00 2.80 8.70 825 13.5 2.5 7.3 United Development 22.69 1.11 9.88 8,034 14.7 0.7 6.6 Barw a Real Estate 36.05 0.84 8.42 14,028 14.2 0.8 6.1 Ezdan Real Estate 15.60 (2.92) 3.24 41,379 23.6 1.4 3.2 Mazaya Qatar Real Estate Development Real Estate 14.78 1.16 2.71 1,629 17.3 1.1 N/A 108.60 1.78 6.68 34,787 15.9 1.5 2.8 9.52 (0.83) 1.60 8,048 N/A 1.7 N/A Qatar Navigation (Milaha) 93.50 1.08 (2.20) 10,708 11.9 0.8 5.3 Gulf Warehousing Qatar Gas Transport (Nakilat) 56.00 (1.41) 0.00 3,282 15.7 2.2 2.7 24.50 0.00 6.11 13,574 14.0 3.5 5.1 Industries Qatar Qatari Investors Group Qatar Electricity and Water Ooredoo Vodafone Qatar Telecom s Transportation Qatar Exchange 148,320 27,072 65,071 42,835 27,564 588,411 Source: Bloomberg Page 5 of 6
6. Contacts Saugata Sarkar 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 QNB Financial Services Co. W.L.L. Contact Center: (+974) 4476 6666 PO Box 24025 Doha, Qatar Disclaimer and Copyright Notice: This publication has been prepared by QNB Financial Services Co. W.L.L. (“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 tech nical 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 6 of 6