Qatar: Weekly Market Report

Transcription

1. ` QSE Index and Volume Regional Indices Qatar (QSE)* Dubai Abu Dhabi Saudi Arabia# Kuwait Oman Bahrain Close WTD% MTD% YTD% 8,730.06 3,208.98 4,594.98 7,418.80 6,807.90 5,011.79 1,373.45 (4.0) (2.4) 0.3 (1.4) 0.8 0.8 1.6 0.9 (1.1) (0.1) (3.0) 0.5 0.2 0.3 2.4 (4.8) 4.5 2.7 6.2 (1.7) 3.1 8,000,000 8,730.06 8,653.32 8,500 0 25-Feb 26-Feb 27-Feb 28-Feb Volume Market Indicators Value Traded (QR mn) QSE Index Week ended Mar 01 , 2018 1,207.3 Week ended Feb 22 , 2018 792.7 467,574.7 487,363.7 (4.1) 55.9 Exch. Market Cap. (QR mn) Volume (mn) Number of Transactions 1.6% 0.8% 32.9 13,489 37.2 44 45 (2.2) 10:33 18:23 – Close 15,006.32 2,472.26 2,754.65 2,754.51 1,932.20 1,720.25 3,101.57 1,100.75 5,360.43 3,616.02 0.8% 52.3 51.3 Market Breadth WTD% (2.8) (3.2) (4.4) (2.1) (0.2) (5.5) (6.9) 5.0 (0.8) (1.7) MTD% 0.9 1.0 0.7 1.6 2.6 1.2 (2.4) 0.1 3.0 0.8 YTD% 5.0 0.8 2.7 5.1 9.3 (10.2) (10.9) 0.2 8.0 5.7 0.3% (1.4%) (2.4%) (4.0%) Weekly Exchange Traded Value ($ mn) 404.09 370.44 201.29 4,031.70 130.77 28.96 34.38 Exchange Mkt. Cap. ($ mn) 128,396.0 106,260.0# 127,857.7 465,421.8 94,523.6 20,914.1 21,314.9 TTM P/E** 13.5 11.3 11.6 16.4 15.4 12.1 9.1 Qatar (QSE)* 2.2% 1.1% 0.0% (1.1%) (2.2%) (3.3%) (4.4%) Chg. % 18,506 Companies Traded 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 1-Mar Dubai Foreign institutions turned bearish with net selling of QR75.6mn vs. net buying of QR1.3mn in the prior week. Qatari institutions remained bullish with net buying of QR64.1mn vs. net buying of QR57.4mn in the week before. Foreign retail investors turned bullish with net buying of QR11.1mn vs. net selling of QR2.8mn in the prior week. Qatari retail investors turned marginally bullish with net buying of QR0.3mn vs. net selling of QR55.8mn the week before. Foreign institutions bought (on a net basis) ~$63.0mn worth of Qatari equities since the beginning of 2018. 8,929.50 Saudi Arabia Trading volume increased by 55.9% to reach 51.3mn shares versus 32.9mn shares in the prior week. The number of transactions rose by 37.2% to reach 18,506 transactions versus 13,489 transactions in the prior week. The Banks and Financial Services sector led the trading volume, accounting for 30.3%, followed by the Telecoms sector which accounted for 24.9% of the overall trading volume. VFQS was the top volume traded stock during the week with 12.4mn shares. 8,992.64 8,850 Abu Dhabi Trading value during the week increased by 52.3% to reach QR1.2bn versus QR792.7mn in the prior week. The Banks and Financial Services sector led the trading value during the week, accounting for 33.27% of the total trading value. The Industrials sector was the second biggest contributor to the overall trading value, accounting for 22.00% of the total trading value. IQCD was the top value traded stock during the week with total traded value of QR116.0mn. 16,000,000 9,080.13 Oman QNB Group (QNBK), Industries Qatar (IQCD) and Masraf Al Rayan (MARK) were the primary contributors to the weekly index decline. QNBK was the biggest contributor to the index’s weekly decline, deleting 61.2 points from the index. IQCD was the second biggest contributor to the mentioned decline, deleting 56.6 points from the index. Moreover, MARK shaved off 51.6 points from the index. However, Vodafone Qatar (VFQS) added 53.7 points to the index. 9,200 Kuwait The Qatar Stock Exchange (QSE) Index decreased 366.30 points or 4.03% during the trading week to close at 8,730.06. Market capitalization fell by 4.06% to QR467.6 billion (bn) versus QR487.4bn at the end of the previous trading week. Of the 45 listed companies, 10 companies ended the week higher, while 33 declined and 2 companies remained unchanged. Vodafone Qatar (VFQS) was the best performing stock for the week with a gain of 20.8% on 12.4mn shares traded. On the other hand, Qatar Insurance (QATI) was the worst performing stock for the week with a decline of 25.3% on 879.2k shares traded. Bahrain Market Review and Outlook P/B** Dividend Yield 1.3 1.2 1.3 1.6 1.0 1.0 0.8 4.8 5.5 4.4 3.3 5.5 5.2 5.7 # Source: Bloomberg, country exchanges and Zawya (** Trailing Twelve Months; * Value traded ($ mn) do not include special trades, if any; Data as of February 28, 2018) Page 1 of 10
2. News Economic & Corporate News  QCB’s international reserves, liquidity edge up in January – Qatar Central Bank’s (QCB) international reserves and foreign currency liquidity edged up in January, data showed, after capital outflows caused by sanctions imposed last year by other Arab states eased. The reserves and liquidity, a measure of QCB’s ability to support the Qatari Riyal currency, increased to $37.7bn last month from $37.6bn in December. (Zawya)  BMI: Qatar to post sustained current account surpluses in coming years – Qatar will post sustained current account surpluses over the coming years due to higher oil prices, according to BMI Research (BMI) and noted rapidly rising imports and strong remittances outflows, however, will keep them below their pre-oil slump highs. As such, BMI forecasts current account surpluses of 5.4% and 4.5% of GDP in 2018 and 2019 respectively, up from an estimated 4.2% in 2017 but well below the average of 27.5% recorded between 2010 and 2014. “We expect hydrocarbon proceeds to continue to be invested into the country’s large sovereign wealth fund, supporting the government’s ambitions to diversify revenues away from hydrocarbons and offering a cushion against external shocks,” BMI stated. BMI’s view for only modest current account surpluses is further underpinned by its expectation for stronger flows of imports and outbound remittances ahead. It believes supply chains have now been fully reorganized to adjust to the ongoing blockade imposed and that the worst of the trade disruptions seen in 2017 has now passed. (Gulf-Times.com)  Decks cleared for Qatar’s first ETF to get listed on QSE – Decks have been cleared for the country’s first exchange traded fund (ETF) to get listed on the Qatar Stock Exchange (QSE) next week. The Qatar ETF (QETF), which is sponsored by Doha Bank and that tracks the 20-stock Qatar Index, is all set to make its foray on March 5, 2018. The Doha Bank QETF has Amwal and Group Securities as fund manager and liquidity provider respectively. The offering would enjoy easy access, as the investor needs only an investor number and broker and the ETF would be easily traded in the secondary market like other current listings. The QETF is expected to be an attractive preposition considering the buoyancy in the country’s economy mainly on account of fast paced development, especially in the infrastructure amidst the economic embargo by the siege countries, sources said. (Gulf-Times.com)  Qatar’s trade surplus jumps to QR16.35bn in January – Qatar’s trade surplus recorded QR16.35bn in January 2018, representing 52% growth on a yearly basis and 10% MoM. The country’s exports grew much faster than imports, thus helping register a robust two-digit expansion in trade surplus YoY, according to the Ministry of Development Planning and Statistics. In absolute terms, South Korea, Japan, China, India and Singapore were among the largest export markets of Qatar; while imports mainly came from China, the US, India, Japan and Germany this January. Faster expansion in the shipments to Singapore, China and South Korea led Qatar’s total exports (valued free-on-board) to reach QR25.93bn in January 2018, showing a 29% YoY increase. On a monthly basis, it was up mere 0.1%. Petroleum gases constituted 67% of total exports of domestic products in January 2018 compared to 69% in the corresponding period of 2017. The country’s re-exports amounted to QR0.58bn in January 2018, which represented 44% and 2% decline on yearly and monthly basis respectively. Qatar’s total imports (valued at cost insurance and freight) were up 2% YoY to QR9.58bn this January. However, it registered 13% decline MoM. (Gulf-Times.com)  Qatar non-oil export value rose by 62.4% – Qatar’s non-oil export value has recorded a significant increase of 62.4% to QR2.12bn in January 2018, compared to December 2017. The growth in non-export value recorded 56% YoY in January, according to Qatar Chamber. Qatar Chamber, in its report which was prepared based on certificates of origin issued by the Chamber’s Research & Studies Department and Member Affairs Department, pointed out about 2844 certificates of origin were issued in January 2018. In January, Qatar exported goods and services to about 59 countries, compared to 61 in December. Countries receiving Qatar’s non-oil exports included 13 Arab countries and GCC, 13 European countries including Turkey, 16 Asian countries (excluding Arab countries), 12 African countries (excluding Arab countries), four countries of North and South Americas and Australia. Oman was still Qatar’s top non-oil exports destination in January accounting for QR734.94mn or 34.7% of the total exports. It was followed by Turkey with almost QR464.54mn or 21.93% and Hong Kong with QR108.03mn or 5.1%. GCC countries as an economic bloc were top destinations of Qatari exports amounting to 36.4% of the total exports with QR770.33mn. Most of them were received by Oman. (Peninsula Qatar)  QNB Group: Qatar’s growth to rise on higher oil prices, eased fiscal constraints, LNG investments – Qatar’s growth is set to rise on higher oil prices, eased fiscal constraints and investments in LNG production, QNB Group stated in its latest ‘Qatar Economic Insight’. The country’s real GDP is expected to rise to 2.5% this year and 3.4% in 2019 before slowing slightly to 3.3% in 2020 as higher oil prices lead to relaxed fiscal constraints and as investment in the long-term expansion of LNG production lifts growth. In the hydrocarbon sector, the extension of the OPEC output cuts agreement in 2018 will keep oil production flat, but Qatar’s hydrocarbon production should pick up thereafter as the OPEC curbs are lifted and as new gas production from the Barzan project comes on line in 2020. The country’s non-hydrocarbon sector will be supported by relaxed fiscal constraints and by investment in a raft of new projects related to the planned 30% increase in LNG production due in five-seven years’ time, which will lend support to jobs growth and domestic demand from 2019 onwards, QNB Group stated. The oil market is expected to balance over the near term with prices averaging $58 for barrel in 2018 and $60 in the 2018-20 period, QNB Group noted. Qatar’s inflation is expected to spike in 2018 to 2.4% with higher oil prices and the introduction of value added tax (VAT) in the second half before easing, as oil prices level off and the impact of VAT fades, to 2.1% in 2019 and 1.6% in 2020. The government’s budget deficit is expected to narrow to -0.5% in 2018 before switching to a surplus of 2% and 4% in 2019-20 on a recovery in hydrocarbon revenue from higher oil prices and the introduction of VAT. Capital spending should continue in 2018 from the implementation of World Cup Page 2 of 10
3. related projects , QNB Group stated in its outlook for the Qatari economy. (Gulf-Times.com)  QNB Group: Higher US rates not a major threat to EM capital inflows – Higher US rates are not a major threat to emerging market (EM) capital inflows, QNB Group stated in an economic commentary. EM watchers have been carefully following the recent inflation developments in the US. Higher than expected inflation could mean faster monetary tightening, which some fear would bring more investors back to the US in search of higher returns and significantly dent flows to EMs. However, QNB Group does not view the risk of higher US interest rates as a major threat to EM capital flows in 2018. So long as growth in EMs rises faster than in the US, which is broadly expected, that should continue to attract global investors to EMs and result in net capital inflows strengthening in 2018. (Gulf-Times.com)  BMI: Large forex reserves help QCB to hold off on rate hikes – Qatar Central Bank (QCB) is certainly able to hold off on rate hikes for some time, given its large foreign exchange reserves. However, with growth likely to accelerate this year as FIFA World Cup-related projects progress and hydrocarbon prices edge up, the case for delaying hikes in order to support the economy amid the GCC diplomatic crisis will weaken, according to BMI Research’s (BMI) Analyst, Andrine Skjelland. Skjelland said, “BMI expects the US Federal Reserve to raise its benchmark funds rate by 75bps this year and 50bps in 2019. And for this reason we believe the QCB will follow suit in order to avoid pressure on the Qatari Riyal’s peg to the Dollar.” Inflation will accelerate in Qatar in 2018, on the back of hydrocarbon price gains, BMI stated in a report. (GulfTimes.com)  Fitch: Qatar’s fiscal deficit declining despite boycott – Qatar’s fiscal deficit is narrowing despite the economic boycott that began in June last year, according global credit rating agency Fitch. “We expect our headline measure of Qatar’s fiscal deficit to decline to 2.5% of GDP in 2017 from 5.1% in 2016, including estimated investment income of the Qatar Investment Authority (QIA),” Fitch stated in a report. The expected improvement is due to recovering oil and gas prices and an associated rebound in nominal GDP and government revenue. Qatar Central Bank’s (QCB) preliminary figures, which exclude QIA income, showed a fiscal deficit of QR24.7bn in the first three quarters of 2017 5.5% of GDP during the period, with revenues and spending up 0.9% and 1.5% respectively in the same period in 2016. The fourth quarter 2017 revenues should show a stronger pick-up with the hydrocarbon price recovery, but spending is traditionally concentrated in that quarter and will also rise, the report stated. Highlighting that there are also signs of broader economic resilience, Fitch stated QCB’s data show non-resident interbank and customer deposits at Qatar’s commercial banks grew in December for the first time since June. (Gulf-Times.com)  Boom in Qatar’s infrastructure to boost realty market – Qatar’s real estate sector will benefit from the significant boom in infrastructure projects, including the development of roads and bridges, according to report issued by Al Asmakh Real Estate Development Company. The report stated new facilities, such as Hamad International Airport and Hamad Port, and the development of infrastructure of roads, bridges and tunnels, along with the rail network, especially Doha Metro and Lusail Light Railway, and the hosting of the 2022 FIFA World Cup will be the main factors behind real estate growth in Qatar. These facilities will contribute to the recovery of the retail and hospitality sector. The report stated it expects 15% jump in the number of hotel rooms in 2018. With the completion of major commercial projects such as Vendome Mall in Lusail, Doha Mall in Mesaimeer and Katara Mall, Qatar’s real estate market for retail sector would witness 30% growth by 2019, which will double the total rental area along with the large commercial centers in different parts of the country, the report noted. (Qatar Tribune)  Qatari equity market set to improve disclosure practices – Qatar’s capital market regulatory authority is working on a draft proposal ahead of considering bringing in better transparency and disclosure practices to the market. The proposals include a series of recommendations to make the market more efficient, according to sources. “We have recommended changes in the rule book regarding the disclosures and information sharing to the investors, which are currently under review of QFMA. The highlight of the recommendations is to make it mandatory for investors to get relevant information required for their investment decisions”, sources said. (Peninsula Qatar)  Doha Bank seeks approval to sell bonds under $2bn EMTN program – Doha Bank’s board is seeking shareholders’ approval to sell bonds worth $2bn under the EMTN program. Issuance will be in various currencies such as US Dollar, Australian Dollar, Yen, Swiss Franc and British Pound. Doha Bank also seeks approval for reducing minimum amount per issuance under its commercial papers program to $1mn from $50mn. (Bloomberg)  MERS reports ~QR57mn net profit in 4Q2017 – Al Meera Consumer Goods Company (MERS) reported net profit of ~QR57mn in 4Q2017 as compared to QR34.3mn in 3Q2017. In FY2017, the company posted net profit of QR194mn as compared to QR199mn in FY2016. EPS amounted to QR9.7 in FY2017 as compared to QR9.96 in FY2016. MERS’ board proposed cash dividend of QR8.5 per share i.e., 85% of the nominal value of each share. (QSE)  Qatar Insurance Company expects 2018’s premiums to increase to about $4bn – Qatar Insurance Company expects to underwrite between QR14bn and QR15bn in policies this year compared to QR11.7bn in 2017, according to Qatar Insurance Company’s CEO, Ali Al Fadala. Further, Al Fadala said that the company has been operating in Dubai for 50 years; sees UAE as important market for them. (Bloomberg)  AHCS’s bottom line rises 31.6% QoQ in 4Q2017 – Aamal Company’s (AHCS) net profit rose 31.6% QoQ (+40.4% YoY) to QR148.06mn in 4Q2017. The company’s revenue came in at QR354.52mn in 4Q2017, which represents an increase of 28.8% QoQ. However, on YoY basis revenue fell 57.6%. EPS amounted to QR0.80 in FY2017 as compared to QR0.73 in FY2016. The company’s board of directors recommended cash dividend of 6% of the nominal share value (QR0.60 per share) subject to the approval at the Annual General Assembly Meeting which is due on April 22, 2018 . In FY2017, AHCS posted a net profit of QR500.9mn, even as the region’s fastest-growing diversified conglomerate had seen its earnings per share grow by nearly Page 3 of 10
4. 10 % over the year. AHCS’ Chairman, Sheikh Faisal Bin Qassim Al Thani said, “It gives me great pleasure also to report that Aamal Company has been at the forefront here, managing to grow its earnings per share by almost 10% over the year with annual net profits attributable to Aamal Company shareholders now exceeding QR500mn, which in the current climate is a very impressive result indeed. I should also add that these are probably the most relevant indicators of performance as some year-on-year comparatives are now not on a true like-for-like basis (revenue in particular) due to the change in the accounting presentation of a couple of business entities during the year, thereby rendering them largely meaningless. People should be made aware that the effects of this change will remain valid until after 4Q2018, by which time they will have reversed out.” (QSE, Gulf-Times.com)  MCCS reports ~QR229mn net profit in 4Q2017 – Mannai Corporation (MCCS) reported net profit of ~QR229mn in 4Q2017 as compared to QR110.3mn in 3Q2017. EPS amounted to QR11.09 in FY2017 as compared to QR11.73 in FY2016. The company recommended 40% cash dividend for FY2017. In FY2017, MCCS reported a net profit of QR506mn despite difficult market conditions in the region. MCCS reported turnover of QR7.04bn in FY2017. MCCS recorded EBITDA of QR850mn and a pre-tax profit of QR553mn in FY2017. The company’s strategy of diversifying its earnings geographically and across different business segments has enabled the company to maintain its level of profits and is well positioned to take advantage of its diverse capabilities across the various business segments and geographies, the company stated. MCCS’ Annual General Assembly will be held on March 21, 2018. (QSE, Gulf-Times.com)  QFLS reports ~QR321mn net profit in 4Q2017 – Qatar Fuel Company (QFLS) reported net profit of ~QR321mn in 4Q2017 as compared to QR270.1mn in 3Q2017. EPS amounted to QR9.7 in FY2017 as compared to QR8.9 in FY2016. The company recommended cash dividend of QR8 per share for FY2017. In FY2017, QFLS posted a net profit of QR964mn, up 9.2% on the same period last year. QFLS’ ownership rights increased by 1.1% to QR7.4bn in FY2017 compared with QR7.3bn in FY2016. QFLS’ CEO, Saad Rashid Al Muhannadi said, “Qatar Fuel Company realized the good result in net profit increase despite substantial changes and large reduction of its margins for distribution of fuel product during the said year, thanks to the efforts exerted towards the increase of fuel sales in general. This is in addition to the measure taken for costs reduction through a multi-initiative integrated cost optimization policy being implemented in phased manner, and is expected to yield results in the near future.” (QSE, Gulf-Times.com)  Mannai Corporation gets approval for QR2.18bn bond issuance – Mannai Corporation’s shareholders accorded approval to its QR2.18bn bond, which is expected to hit the market by the second week of April. Mannai Corporation’s Chairman, Hamad Bin Abdulla Bin Khalifa Al Thani said, “It is expected that the bonds will constitute perpetual instruments with no fixed maturity date, redeemable at the company’s option on certain specified dates. The bonds are expected to be listed on the Irish Stock Exchange.” Mannai Corporation’s Director and CEO, Alekh Grewal said, “The bonds are expected be launched by the second week of April and at present we are doing due diligence with the banks and lawyers. The coupon for the bond, with five-year maturity, has not been decided and would not be predetermined but would depend on the bids of the investors.” The bonds would not be offered to the public in Qatar, Mannai Corporation had earlier stated in a regulatory filing with the Qatar Stock Exchange. Ruling out any further acquisitions for the time being, Grewal said the company is now focused on harnessing the value from Gfi Informatique. (Gulf-Times.com)  Moody’s downgrades Ezdan Holding Group’s CFR to ‘B1’; outlook ‘Stable’ – Moody’s Investors Service Ltd. (Moody’s) downgraded Ezdan Holding Group’s Corporate Family Rating (CFR) to ‘B1’ from ‘Ba1’, the senior unsecured MTN rating, and the associated senior unsecured debt instrument ratings, of Ezdan Sukuk Company Limited to ‘(P)B1’ from ‘(P)Ba1’ and ‘B1’ from ‘Ba1’ respectively. The outlook was changed to ‘Stable’ from ratings under review. The downgrade to ‘B1’ reflects Moody’s concern that Ezdan Holding Group’s financial position will remain weakly positioned over the next 12 to 18 months as illustrated by weak credit metrics whereby leverage (adjusted net debt/EBITDA) and interest cover (adjusted EBITDA/interest expense) will remain above 10.0x and trending below 2.0x, respectively. The downgrade also reflects the change in financial policies, as a result of the decision to swap a portion of its equity portfolio to increase its stake in a real estate project contrary to our original expectations. The ‘Stable’ outlook reflects Moody’s expectation that Ezdan Holding Group will be able to deliver on its refinancing plan which would alleviate some pressure on covenants. (Bloomberg)  BRES forecasts soft landing for Qatar real estate market – Qatar’s real estate market is heading to a ‘soft landing’ before taking a turnaround in post 2020, according to Barwa Real Estate Company’s (BRES) CEO, Salman Bin Mohammed Al Mohannadi. The market has been witnessing a scenario for long where the rents were far beyond reasonable. As a realistic market player, BRES wants to play the role of a moderator in the market. Al Mohannadi said BRES has no intention to increase rents in short term. He added, “All of us know that that at certain point, the real estate market will face two scenarios. Either it will have to crash or will have a soft landing. In a ‘market moderator’ role we are trying to orchestrate a scenario of soft landing rather than a crash.” BRES believes that the rents, across the board, will further go down a little bit in the coming months, which is good for all the market players and local economy as well. It will be a win-win situation for all the market players, he said. On the current market trends, Al Mohannadi said Qatar’s real estate market is on a strong foot and is very positive. (Peninsula Qatar)  DBIS’ net profit declines 84.1% QoQ in 4Q2017 – Dlala Brokerage and Investments Holding Company’s (DBIS) net profit declined 84.1% QoQ (-50.7% YoY) to QR0.52mn in 4Q2017. However, in FY2017 financial statements showed that DBIS reported net profit of QR16.65mn as compared to QR3.80mn in FY2016. EPS amounted to QR0.59 in FY2017 as compared to QR0.13 in FY2016. DBIS’ board recommended to not to distribute dividends and transfer it to the retained earnings. (QSE)  VFQS posts net loss of ~QR29mn in 3Q2017-18 – Vodafone Qatar (VFQS) reported net loss of ~QR29mn in 3Q2017-18 as Page 4 of 10
5. compared to net loss of QR96 .4mn in 2Q2017-18. Further, financial statements showed that the net loss is QR182.2mn for the nine month period ended December 31, 2017 compared to net loss amounting to QR269.2mn for the year ended March 31, 2017 (year-end changed to December 31 from March 31; therefore, financials represent nine months only). Loss per share amounted to QR0.22 for the nine month period ended December 31, 2017 compared to loss per share amounted to QR0.32 for the year ended March 31, 2017. The company’s board of directors recommended to the Annual General Assembly not to distribute dividend. VFQS, which has recorded 1.39mn customers, reported a flat QR407mn EBITDA but reflecting a margin improvement of 1.2 pps during the first nine months of this year. The EBITDA increased by 75% QoQ, pointing to a strong recovery in revenue after the network outage in July 2017, disciplined cost management and recognition of a one-off benefits during the quarter. These benefits included QR13mn recognized as service revenue and QR25mn credit note from a network supplier. VFQS’ CEO, Ian Gray said, “The overall financial results clearly indicate a recovery in the performance of the business. Adding to this average revenue per user has returned to pre outage levels and our measure of customer satisfaction continues to improve, nearing our highest ever performance.” Revenue stood at QR1.48bn, which fell 4% on a yearly basis, despite acceleration in the postpaid subscriber segment (+9% for QoQ), handset and equipment revenues and the QR13mn benefit. The company’s net profit excluding amortization improved 12% YoY to QR120mn, driven by higher EBITDA and lower depreciation. Otherwise, it was on net loss since amortization amounted to QR403mn annually. The net debt position continued to improve, reaching QR620mn by December 31, 2017, the lowest level in the company’s history. (QSE, Gulf-Times.com)  QNNS reports ~QR107mn net profit in 4Q2017, beating our estimate – Qatar Navigation (QNNS) reported net profit of ~QR107mn in 4Q2017 as compared to QR95.5mn in 3Q2017, beating our estimate of QR96.5mn (variation of ~11%). EPS decreased to QR4.14 in FY2017 from QR6.26 in FY2016. The company’s board of directors recommended distribution of 35% cash dividend, equivalent to QR3.5 per share. In FY2017, QNNS posted a net profit of QR470mn as compared to QR711mn in FY2016. Operating revenues decreased by 2% to QR2.49bn for FY2017, down from QR2.55bn for the same period in FY2016. Operating profit decreased by 19% to QR448mn for the 12 months up to December, down from QR555mn for the same period in FY2016. QNNS’ Chairman, Sheikh Ali Bin Jassim Al Thani said, “Despite the unexpected events and ongoing industry-wide challenges during the year, Qatar Navigation remained profitable in 2017 driven by a stronger operating performance in the third quarter onwards, which we believe, sets the stage for a successful 2018. Going forward, we will continue to focus on driving growth and executing on our strategic priorities.” QNNS’ President and CEO, Abdulrahman Essa Al Mannai said, “We finished 2017 with strong momentum to carry us into 2018 and beyond. This reflects the success of the new shipping routes and supply chain solutions we launched throughout the year. Additionally, we continued to improve the cost structure of our businesses, expand our value proposition and we remain on track to deliver sustained short and long-term growth.” (QNBFS Research, QSE, GulfTimes.com)  Vodafone selling its 51% stake Qatar JV to partner Qatar Foundation – Vodafone is selling its 51% stake in Qatari operations to the existing partner Qatar Foundation, but its brand name will be retained in Qatar with the British telecom major agreeing to extend the technical support for another five years. Moreover, Vodafone Qatar’s license, originally granted by the Communications Regulatory Authority for 20 years, has been extended for an additional 40 years until 2068, which will greatly help reduce annual amortization costs from QR403mn to about QR100mn, making it profitable in the foreseeable future. The board has also suggested halving the face value of its shares to QR5 in order to address the QR4.27bn accumulated losses, largely on account of the amortization costs of the license. However, this will have no cash impact on the Qatar Stock Exchange-listed company. On the proposed equity stake sale, Vodafone Qatar stated Qatar Foundation entered into a conditional share purchase agreement with Vodafone Europe, whereby Qatar Foundation agreed to purchase 51% stake in the share capital of joint venture (JV) of Qatar Foundation and Vodafone, which currently owns 45% of Vodafone Qatar. Upon completion of the transaction, which is subject to and conditional upon various regulatory approvals being obtained and the satisfaction of a number of conditions precedent, the private founder will be 100% owned by Qatar Foundation whose direct and indirect shareholding in Vodafone Qatar will then increase from its current level of 27.05% to 50%. (GulfTimes.com)  Vodafone Qatar appoints Sheikh Hamad Bin Abdullah Al Thani as new CEO – Vodafone Qatar appointed Sheikh Hamad Bin Abdullah Al Thani as new CEO and Rashid Al Naimi as Managing Director. Al Naimi, who is the CEO of Qatar Foundation (QF) Endowment and responsible for QF’s investment portfolios, has been elected as Managing Director with immediate effect. Sheikh Hamad will replace Ian Gray who has decided to retire and step down following the company’s annual general assembly, scheduled to be held on March 19, 2017. (Gulf-Times.com)  QEWS to operate Umm Al Houl project from July – Umm Al Houl Power Project worth QR11bn is expected to be operational from July 2018, Qatar Electricity and Water Company (QEWS) stated. QEWS’ Chairman, HE the Minister of Energy and Industry Mohamed Bin Saleh Al-Sada, who presided over the company’s Annual General Meeting, said the project is already 98% complete. During the meeting, which approved the board of directors recommendation to distribute 77.5% cash dividend of the nominal value per share, Al Sada said Phase 1 and 2 (water) are completed with production capacity of 60MIGD (million imperial gallons per day) of desalinated water, while Phase 1 (electricity) is completed with production capacity of 1,600MW. “The whole project is expected to be completed on July 2, 2018 with production capacity of 2,520MW of power and 136MIGD of desalinated water,” Al Sada said, adding that the Umm Al Houl plant is one of the biggest power and desalination projects in the region. (Gulf-Times.com)  QGTS reports ~QR240mn net profit in 4Q2017, beating our estimate – Qatar Gas Transport Company Limited (QGTS) reported net profit of ~QR240mn in 4Q2017 as compared to Page 5 of 10
6. QR198 .1mn in 3Q2017, beating our estimate of QR209.66mn (variation of ~14%). EPS decreased to QR1.53 in FY2017 from QR1.72 in FY2016. QGTS’ board recommended distributing cash dividends to the shareholders equal to 10% of the nominal value of its capital, which is equivalent to QR1 per share, matching with our estimate. In FY2017, QGTS posted a net profit of ~QR846mn. Further, the net profit achieved in the fourth quarter of 2017 was higher than that achieved in the third quarter and fourth quarter of 2016, by 21% and 16% respectively. During the year, QGTS successfully deployed the company’s strategic plans towards maintaining its global leadership in LNG transportation and the integral role it plays in Qatar’s LNG supply chain. Despite the challenges facing the energy and maritime industry, the company managed to achieve positive results across its operations that exceeded planned expectations in 2017 through enhanced operational efficiency and a reduction in general, administrative expenses and finance costs. QGTS continues to explore and capitalize on different business opportunities and mitigating business risks to strengthen the company’s international position as a global leader in the LNG shipping industry. The board also decided to convene the Annual General Meeting on March 20, 2018. (QNBFS Research, QSE, Gulf-Times.com)  QNCD to operationalize fifth plant in 2018 – Qatar National Cement Company (QNCD) is planning to operationalize the fifth plant by this year to enhance the cement production by 5,500 tons per day (tpd). This production augmentation is to support the infrastructure upgrade of the country to meet the market demand of various products at competitive prices, QNCD’s Chairman and Managing Director, Salem Bin Butti Al Naimi said at the Annual General Assembly Meeting (AGM) that approved 45% cash dividend for FY2017. QNCD has already completed the industrial test for cement mills of its fifth plant in accordance with the designed cement production capacity of more than 5,000 tpd. QNCD is not only diversifying the production by adding new types of cement to meet the demand of local market and utilize the opportunity of export but also optimizing the production capacity of washed sand and calcium carbonate to meet the expected local market demand. (Gulf-Times.com) regional uncertainties, its spokesman said. It maintained a healthy capital adequacy ratio of 26% as per the QFCRA (Qatar Financial Center Regulatory Authority) Basel rules against the regulatory requirement of 10.5%. It has continued to enjoy a strong liquidity position of about $120mn at the end of 2017. QInvest’s Chairman, Sheikh Jassim Bin Hamad Bin Jassim Bin Jaber Al Thani said, “In 2017, we were able to capitalize on relatively more favorable global market conditions. We remain prudent in our management of risk and have built up a strong liquidity position and an underleveraged balance sheet that has enabled us to invest in key global markets on an opportunistic basis.” QInvest’s CEO, Tamim Hamad Al Kawari said over the past years the group has successfully structured new investment opportunities across several asset classes, with a particular focus on the international real estate market, debt and equity investments and funds. (Gulf-Times.com)  Ooredoo acquires 5G network spectrum – Ooredoo announced that it is racing ahead on the path to 5G, as the world’s first having 5G New Radio (NR) with commercial equipment suitable for business customers. Live in Qatar, Ooredoo is proud to announce its first-in-the-region speeds of 2.3 Gbps with amazing 3.5 ms latency. By using Ooredoo 5G spectrum at 3.5 GHz, Ooredoo will continue to expand the footprint of 5G. Ooredoo’s CEO, Waleed Al Sayed said, “At Mobile World Congress, Ooredoo Group is enhancing our position as a global innovator, racing ahead in our goal to become the world’s first company to provide wide 5G coverage. By providing superior speeds, we will enable organizations, cities, and countries to fully digitally transform in the era of Smart Cities and the Internet of Things. This is a major milestone in delivering on our promise to enrich people’s digital lives and allow them to enjoy and benefit from the extraordinary benefits of the internet.” (Zawya)  FTSE March Index Review includes Qatar Navigation in place of Qatar Insurance Company. FTSE announced that Qatar Navigation (QNNS) will replace Qatar Insurance Company (QATI) as a result of the index review conducted and announced on February 28. The changes will be effective on Monday March 19, 2018. (FTSE)  of QR368.6mn in FY2017 – QInvest has reported net profit of QR65.9mn on revenues of QATI gets approval to hike capital to QR3.2bn – Qatar Insurance Company’s (QATI) shareholders approved the board’s recommendation to increase QATI’s capital from QR2.7bn to QR3.2bn during the company’s Annual General Meeting. QATI’s Deputy Chairman, Abdulla Bin Khalifa Al Attiyah, also approved the distribution of 15% cash dividend and an issue of bonus shares of three for every 20 held. Al Attiyah said QATI’s consistent approach of applying global standards and best practices in its assessment of the current and future solvency and capital adequacy requirements ensured that it remained well-positioned and capitalized amidst the pressures of global market conditions. (Gulf-Times.com)  QInvest records net profit of QR65.9mn on revenues QR368.6mn in FY2017. The group’s global assets stood at QR4.46bn at the end of December 31, 2017. QInvest’s prudent investment approach, stringent provisioning policy, and underleveraged balance sheet have provided stability amid Page 6 of 10
7. Qatar Stock Exchange Top Gainers Top Decliners 0 .0% 24.0% 20.8% -10.0% 16.0% -12.2% 8.0% -20.0% 4.1% 3.3% 2.5% 2.5% Al Khaleej Takaful Insurance Mesaieed Petrochemical Holding Company -25.3% 0.0% Vodafone Qatar Aamal Qatar General Insurance & Reinsurance Source: Qatar Stock Exchange (QSE) -30.0% Qatar Insurance Dlala Holding Qatar National Cement Barwa Real Estate Masraf Al Rayan Source: Qatar Stock Exchange (QSE) Most Active Shares by Value (QR Million) Most Active Shares by Volume (Million) 150.0 15.0 116.0 111.9 12.4 105.1 100.7 100.0 10.0 69.1 50.0 6.6 5.0 0.0 Industries Qatar Barwa Real Estate Vodafone Qatar Masraf Al Rayan Source: Qatar Stock Exchange (QSE) QNB Group 3.2 3.0 2.7 United Development Barwa Real Estate Ezdan Real Estate 0.0 Vodafone Qatar Qatar First Bank Source: Qatar Stock Exchange (QSE) Investor Trading Percentage to Total Value Traded Net Traded Value by Nationality (QR Million) (64) 100% 20.49% 80% 13.08% 60% 30.21% 24.90% 36.23% 36.20% 26.74% Non-Qatari 470 12.16% 405 40% 20% -9.5% -10.6% -11.6% 64 Qatari 738 802 0% Buy Sell Qatari Individuals Qatari Institutions Non-Qatari Individuals Non-Qatari Institutions Source: Qatar Stock Exchange (QSE) (200) - 200 Net Investment 400 Total Sold 600 800 1,000 Total Bought Source: Qatar Stock Exchange (QSE) Page 7 of 10
8. TECHNICAL ANALYSIS OF THE QSE INDEX Source : Bloomberg The Index closed down 4.03% from the week before; it ended Thursday’s session at 8,730.06. We see a bearish move took place on higher Index constituents’ volumes, which indicates further correction is ahead of us. The MACD moved closer to its signal line, which is another sign for the anticipated weakness. We maintain our expected resistance level at the 10,000 level, and the current support level is situated at the 8,000 mark. 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 8 of 10
9. Com pany Nam e Price March 01 % Change WTD % Change YTD Market Cap. QR Million TTM P/E P/B Div. Yield Qatar National Bank 121.00 (4.72) (3.98) 111,761 8.9 1.6 Qatar Islamic Bank 96.69 (2.82) (0.32) 22,847 10.9 1.5 5.2 Commercial Bank of Qatar 28.32 (8.94) (2.01) 11,462 31.2 0.7 N/A Doha Bank 33.00 (3.11) 15.79 10,232 10.0 0.9 8.8 Al Ahli Bank 32.10 (3.02) (13.55) 6,753 10.4 1.3 3.0 Qatar International Islamic Bank 59.99 (0.76) 9.87 9,081 10.9 1.6 6.7 Masraf Al Rayan 37.55 (9.50) (0.53) 28,163 13.9 2.1 5.3 Al Khalij Commercial Bank 12.05 (7.80) (15.14) 4,338 8.8 0.7 6.2 Qatar First Bank 6.65 (0.75) 1.84 1,330 N/A 0.8 N/A National Leasing 10.55 (2.41) (1.49) 522 176.4 0.5 4.7 Dlala Holding 12.00 (12.22) (18.37) 341 18.8 1.5 N/A Qatar & Oman Investment 5.0 7.89 (1.38) (0.13) 249 26.6 0.9 6.3 Islamic Holding Group Banking and Financial Services 29.00 (4.92) (22.67) 164 N/A 1.2 3.4 Zad Holding 77.99 (0.65) (3.72) 1,020 9.8 1.1 5.8 6.03 0.67 (6.66) 70 N/A 1.0 N/A Qatar German Co. for Medical Devices Salam International Investment 207,241 5.98 (0.99) (13.21) Medicare Group 76.90 (2.66) 10.09 Qatar Cinema & Film Distribution 22.66 0.00 (9.36) 117.01 0.87 Widam Food Co. 60.69 Mannai Corp. Qatar Fuel Al Meera Consumer Goods Consum er Goods and Services 684 N/A 0.5 N/A 2,164 27.0 2.2 2.3 142 33.9 1.1 4.4 14.65 11,634 12.1 1.7 5.5 (7.20) (2.90) 1,092 10.1 3.2 7.0 62.00 0.00 4.20 2,828 5.6 1.0 6.5 149.00 (3.86) 2.83 2,980 15.4 2.2 6.0 22,615 Qatar Industrial Manufacturing 44.50 0.86 1.83 2,115 10.3 1.3 6.7 Qatar National Cement 61.00 (11.59) (3.02) 3,987 12.2 1.3 7.4 104.08 (4.22) 7.30 62,968 19.0 1.8 3.8 32.20 (0.56) (12.02) 4,003 15.8 1.5 2.3 175.72 (5.32) (1.28) 19,329 12.0 2.2 4.4 9.23 4.06 6.34 5,815 11.6 0.7 6.5 Gulf International Services 17.41 (2.74) (1.64) 3,235 38.1 0.9 N/A Mesaieed Petrochemical Holding 14.96 2.47 18.82 18,795 17.3 1.3 4.0 6.15 (1.91) 0.82 510 N/A 0.6 4.9 Industries Qatar Qatari Investors Group Qatar Electricity and Water Aamal Invesment Holding Group Industrials 120,757 Qatar Insurance Doha Insurance 37.35 (14.06) (17.41) 10,358 28.1 1.2 3.5 13.90 (1.14) (0.71) 695 16.5 0.7 4.3 Qatar General Insurance & Reinsurance 46.80 3.31 (4.49) 4,095 13.3 0.7 3.3 Al Khaleej Takaful Insurance 12.75 2.49 (3.70) 325 22.4 0.7 4.7 Qatar Islamic Insurance Insurance 56.00 (1.72) 1.87 840 13.6 2.4 6.3 United Development 16.52 (0.78) 14.88 5,850 10.9 0.5 7.6 Barw a Real Estate 33.99 (10.55) 6.22 13,226 7.8 0.7 7.4 Ezdan Real Estate 9.25 (7.41) (23.43) 24,536 14.3 0.8 5.4 Mazaya Qatar Real Estate Development Real Estate 7.86 (1.75) (12.67) 910 50.8 0.6 N/A 86.00 (2.27) (5.23) 27,548 14.0 1.2 4.1 8.90 20.76 10.97 7,524 N/A 1.7 N/A Qatar Navigation (Milaha) 65.00 1.56 16.20 7,444 15.7 0.5 5.4 Gulf Warehousing Qatar Gas Transport (Nakilat) 40.50 1.25 (7.93) 2,373 11.0 1.5 4.2 17.48 (1.69) 8.57 9,684 11.5 1.6 5.7 Ooredoo Vodafone Qatar Telecom s Transportation Qatar Exchange 16,313 44,521 35,072 19,502 467,575 Source: Bloomberg Page 9 of 10
10. 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 Mohamed Abo Daff QNB Financial Services Co. W.L.L. Senior Research Analyst Contact Center: (+974) 4476 6666 Tel: (+974) 4476 6589 PO Box 24025 mohd.abodaff@qnbfs.com.qa 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 Qatar National Bank (Q.P.S.C.). QNBFS 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 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 10 of 10