Published on March 6, 2014
Market Review and Outlook QE Index and Volume The Qatar Exchange (QE) Index declined 164.80 points, or 1.40%, during the trading week, to close at 11,607.03 points. Market capitalization decreased by 3.12% to reach QR662.2 billion (bn) as compared to QR683.5bn at the end of the previous week. Of the 43 listed companies, 15 companies ended the week higher while 27 fell and 1 remained unchanged. Islamic Holding Group (IHGS) was the best performing stock for the week, with a gain of 10.00% on 1.8 million (mn) shares traded. On the other hand, Mesaieed Petrochemical Holding Company (MPHC) was the worst performing stock with a decline of 17.78% on 21.7mn shares traded. 11,700 Regional Indices Qatar (QE)* Dubai Abu Dhabi Saudi Arabia Kuwait Oman Bahrain Close 11,607.03 4,153.64 4,896.87 9,248.82 7,507.43 7,118.12 1,373.27 WTD% MTD% YTD% (1.4) (1.6) (1.2) 1.6 (2.4) 0.1 0.0 (1.4) (1.6) (1.2) 1.6 (2.4) 0.1 0.0 11.8 23.3 14.1 8.4 (0.6) 4.1 10.0 15,000,000 11,346.58 QE was closed on March 02, 2014 11,150 0 2-Mar 3-Mar 4-Mar 5-Mar Volume QE Index Week ended Feb 27, 2014 3,707.2 662,160.8 683,473.6 72.7 71.2 2.2 49,006 42,660 14.9 43 43 0.0 15:27 Value Traded (QR mn) 15:26 – Exch. Market Cap. (QR mn) Volume (mn) Number of Transactions Companies Traded Market Breadth Market Indices Close Total Return 16,911.92 All Share Index 2,940.33 Banks/Financial Svcs. 2,851.27 Industrials 3,966.23 Transportation 2,017.21 Real Estate 2,010.70 Insurance 2,826.24 Telecoms 1,494.18 Consumer 7,027.46 Al Rayan Islamic Index 3,372.15 Market Indices Weekly Index Performance 3.5% 6-Mar Week ended Mar 6, 2014 3,592.4 Market Indicators WTD% (0.7) (0.6) (0.6) 0.0 0.0 (0.4) 0.5 (6.5) 2.4 (0.1) Chg. % (3.1) (3.1) MTD% (0.7) (0.6) (0.6) 0.0 0.0 (0.4) 0.5 (6.5) 2.4 (0.1) YTD% 14.0 13.6 16.7 13.3 8.5 3.0 21.0 2.8 18.1 11.1 1.6% 0.1% 0.0% 0.0% Weekly Exchange Traded Value ($ mn) 1,041.21 1,917.40 696.78 13,312.47 486.80 126.92 15.97 Exchange Mkt. Cap. ($ mn) 181,829.4 84,868.0 130,978.7 499,504.7# 109,888.7 25,546.9 51,762.9 (2.4%) Kuwait Dubai Qatar (1.2%) (1.4%) (1.6%) Abu Dhabi (3.5%) Bahrain Foreign institutions remained bullish for the week with net buying of QR80.1mn vs. net buying of QR213.2mn in the prior week. Qatari institutions also remained bullish with net buying of QR274.8mn vs. net buying of QR113.4mn the week before. Foreign retail investors turned bearish for the week with net selling of QR32.3mn vs. net buying of QR16.7mn in the prior week. Qatari retail investors remained bearish with net selling of QR323.0mn vs. QR343.3mn the week before. Thus far in 2014, the QE has already witnessed net foreign portfolio investment inflow of ~$742.3mn. 11,425 Oman Trading value during the week decreased by 3.10% to reach QR3.59bn vs. QR3.71bn in the prior week. The Industrials sector, driven by MPHC, led the trading value during the week, accounting for 40.27% of the total equity trading value. Trading volume increased by 2.20% to reach 72.7mn shares vs. 71.2mn shares in the prior week. The number of transactions rose by 14.88% to reach 49,006 transactions versus 42,660 transactions in the prior week. The Industrials sector also led the trading volume, accounting for 36.21%. 11,607.03 11,588.24 Saudi Arabia During the week, Ooredoo Group (ORDS) and Mannai Corporation (MCCS) announced their results. ORDS reported a net profit of QR510.0mn for the fourth quarter of 2013, up by 51.2% on a quarterover-quarter (QoQ) basis due to a drop in foreign exchange losses. For the full year 2013, the company's net profit fell by 12.5% year-over-year (YoY) to QR2.6bn due to increased foreign exchange losses (despite higher revenue). FY2013 revenue reached QR33.9bn, reflecting a modest YoY increase of 1.1%. ORDS recommended a QR4.00 cash dividend with the results (QR5.00 in 2012). MCCS posted a net profit of QR446.1mn in 2013, up 11.4% from QR400.3mn posted in 2012. In 2012, MCCS acquired a 66% stake in Damas International. In 2013, the company increased its stake in Damas International by an additional 15% by acquiring the remaining shareholding of the founder shareholders, thereby increasing Mannai‟s shareholding to 81%. Recently, the company upped its stake in Damas to 100%. Along with its results announcement, MCCS recommended a cash dividend of QR5.50 per share. 30,000,000 11,664.02 TTM P/E** P/B** Dividend Yield 15.3 17.8 13.0 18.5 15.4 10.9 9.5 1.9 1.5 1.6 2.3 1.2 1.6 0.9 4.2 2.0 3.7 3.2 3.8 3.6 3.7 Source: Bloomberg, country exchanges and Zawya (** Trailing Twelve Months; * Value traded ($ mn) do not include special trades, if any) (#Data as of Mar. 05, 2014) Page 1 of 5
News Economic News QNB Group: Qatar international reserves touch $41.9bn in January – A new study has shown that Qatar‟s international reserves surged by 22.2% YoY to reach a total of $41.9bn in January 2014, reflecting the country‟s strong current account surplus and lower capital outflows. According to QNB Group, the country‟s international reserves had stood at $34.3bn in January 2013. While the balance of payments data for 2013 are yet to be released, the country‟s current account is expected to have registered a strong surplus due to the large hydrocarbon exports offsetting growing imports. Qatar‟s foreign reserves have been rising steadily over the years due to large current account surpluses. Going forward, QNB Group expects Qatar‟s reserves to continue rising in 2014. (Gulf-Times.com) QNB Group: Qatar’s population growth to be one of world’s highest – According to a report by QNB Group, Qatar‟s forecasted average population growth of 10.5% for 2014 will be one of the world‟s highest rates. Qatar‟s population grew by 10.4% YoY in February to reach 2.12mn. Population growth in recent months has been driven by the large ramp up in infrastructure spending in preparation for the 2022 FIFA World Cup. QNB Group said that the larger population will enable higher economic growth by boosting aggregate demand and investment in housing and services. Planned heavy investments in major projects in 2014 are likely to accelerate economic growth, which could lead to certain supply bottlenecks, pushing up prices somewhat. (Gulf-Times.com) QCB caps bonuses for bank board members – The Qatar Central Bank (QCB) is capping bonuses for board members of commercial banks in the country. This is a part of the Emir's objective to undertake a number of steps to spread the country's wealth more widely among all Qataris. The maximum annual bonus for a bank chairman in Qatar has been set at QR2mn ($550,000), while the cap for a board member is QR1.5mn. Bonuses can only be granted if a bank makes a net profit and 5% of a bank's capital has to be distributed among investors. No bonuses can be distributed without the QCB's approval. (Gulf-Times.com) New Port Project set for early completion – According to a top official, quick progress is being made in the construction of the New Port Project (NPP) and more than 35% of the work has been completed as of now. The project consists of the new port, a naval base for the Emiri Naval Force and Qatar Economic Zone 3. Situated 24 kilometers south of Doha, the entire cost for the project is estimated at QR27bn. With an area of 26.5 square kilometer, a major part of the project is reclaimed land. (Gulf-Times.com) S&P: Qatar may not issue long-term debt in 2014 – Standard & Poor‟s (S&P) said that Qatar is not expected to issue any long-term debt in 2014 even as the Middle East & North Africa (MENA) region is slated to witness borrowings of around $56bn. In general, sovereign debt capital markets are relatively underdeveloped in the GCC and S&P said it does not expect Abu Dhabi, Kuwait, Qatar, or Saudi Arabia to issue longterm debt in 2014. S&P viewed that financing these states‟ large investment programs could result in weaker government balances, but as long as oil prices remain high, it expects them to continue to post fiscal surpluses. However, S&P expects that smaller GCC countries such as Oman and Bahrain to issue commercial debt in the market. (Gulf-Times.com) Market & Corporate News ORDS reports QR510mn net profit in 4Q2013 - Ooredoo Group (ORDS) reported a net profit of QR510.0mn for 4Q2013, up by 51.2% on a QoQ basis due to a drop in FX Losses. The company's 4Q2013 revenue declined by 3.6% QoQ to reach QR8,199.8mn. For FY2013, the company's net profit fell by 12.5% YoY to QR2.6bn, despite higher revenue, due to increased FX losses, SG&A expenses, operating expenses and net finance costs. FY2013 revenue reached QR33.9bn, reflecting a modest YoY increase of 1.1%. In line with the decline in net profit, EPS decreased to QR8.05 in FY2013 compared to QR9.89 in FY2012. Meanwhile, ORDS' BoD recommended a 40% cash dividend which is to be approved during the shareholders meeting scheduled to be convened later. (QE) MCCS net profit rises by 11.4% to QR446.1mn in 2013 – Mannai Corporation (MCCS) earned a net profit of QR446.1mn in 2013, up 11.4% from QR400.3mn posted in 2012. Moreover the company‟s revenue surged by 17.5% to reach QR5.6bn vs. QR4.8bn in 2012. Mannai said its acquisition in 2012 of a 66% stake in Damas was a defining moment in the company‟s history. The company increased its stake in Damas International by an additional 15% by acquiring the remaining shareholding of the founder shareholders, thereby increasing Mannai‟s shareholding to 81%. Recently, the company upped its stake in Damas to 100%. MCCS‟s board of directors has recommended a 55% cash dividend to its shareholders, which work out to QR5.50 a share. MCCS‟ AGM will be held on March 23, 2014 at the Grand Hyatt Hotel Doha, where the recommendation will be submitted for approval. (QE, GulfTimes.com) Al Khaliji to finance QR117mn greenfield recycling project in Qatar – Al Khalij Commercial Bank (Al Khaliji) is financing one of the largest greenfield projects for recycling materials in Qatar, estimated to cost QR117mn. The 20,000-square meter modern recycling plant located in Mesaieed Industrial City is focused on recycling used tires and rubber materials in line with government‟s efforts to make recycling a standard practice that promotes environmental sustainability, as well as creating economic opportunities that contribute to diversifying state revenues. The funding initiative comes as part of the Generation Green Program at Al Khaliji, which is the first incentive-driven loan initiative for green projects by a bank in Qatar. (Gulf-Times.com) Doha Bank to acquire bank branches in India – Doha Bank‟s (DHBK) Group CEO R. Seetharaman said that the bank is exploring opportunities to buy branches of foreign and Indian banks operating in India. Shareholders of Doha Bank authorized its board of directors to acquire branches of foreign and Indian banks in India at the bank's ordinary general meeting. Seetharaman said instead of taking the organic route, the bank is planning to take the investment route to grow its operations in India. In the first phase of DHBK‟s expansion in India, the bank will aim at acquiring the branches of only foreign banks operating in India. In the second-phase, the bank will look at acquiring the branches of Indian banks. (Qatar Tribune) Alijarah to add 200 vehicles to Mowasalat fleet – Alijarah Holding (NLCS) has signed an agreement with Mowasalat Company to add 200 new vehicles to its existing taxi fleet in order to take it to 1,000 vehicles. (QE) Page 2 of 5
Qatar Exchange Top 5 Gainers Top 5 Decliners 0.0% 12.0% 10.0% -4.2% -7.0% 8.0% 6.9% -8.2% -7.3% -6.9% Ooredoo Salam International Investment 5.5% -14.0% 4.0% 3.0% 2.1% -17.8% 0.0% -21.0% Islamic Gulf Qatar Cinema Qatar Islamic Holding Group International & Film Insurance Services Distribution Al Meera Consumer Goods Source: Qatar Exchange (QE) Mesaieed Petrochemical Holding Company Doha Bank Mannai Corp. Source: Qatar Exchange (QE) Most Active Shares by Value (QR Million) Most Active Shares by Volume (Million) 1,200.0 24.0 21.7 904.0 800.0 16.0 400.0 307.5 303.7 8.0 204.0 5.6 180.6 5.4 4.9 3.8 0.0 Mesaieed Petrochemical Holding Company QNB Group Industries Qatar Masraf Al Rayan Source: Qatar Exchange (QE) Doha Bank 0.0 Mesaieed Petrochemical Holding Company Barwa Real Estate Masraf Al Rayan Vodafone Qatar Qatar Gas Transport (Nakilat) Source: Qatar Exchange (QE) Investor Trading Percentage to Total Value Traded Net Traded Value by Nationality (QR Million) 48 100% 25.72% 23.49% 12.07% 12.97% Non-Qatari 80% 60% 19.45% 1,358 11.80% 40% 42.76% 1,310 (48) 51.75% 20% Qatari 2,283 2,235 0% Buy Sell Qatari Individuals Qatari Institutions Non-Qatari Individuals Non-Qatari Institutions Source: Qatar Exchange (QE) (500) Net Investment 500 1,000 Total Sold 1,500 2,000 2,500 Total Bought Source: Qatar Exchange (QE) Page 3 of 5
TECHNICAL ANALYSIS OF THE QE INDEX Source: Bloomberg The QE Index continued its slide for the second consecutive week losing around 165 points. The index started the curtailed week on a bearish note and caved under heavy selling pressure on Wednesday; it breached the important supports of the 21-day moving average and the 11,400.0 psychological level suffering its largest single day loss in the past six months. However, Thursday was a different day as the index witnessed a gap-up opening and erased all its Wednesday‟s losses, reclaiming the 11,400.0, the 21-day moving average and 11,600.0 levels within one trading session as bulls were back in action. Technically, the index has strong support near 11,520.0. The medium-term trend is up and intact until it holds onto the support of the 11,520.0 level. A continued push toward 11,660.0 is possible considering the current higher push. Moreover, a rise above this level may indicate that the correction is over and further confirms the bullish move toward the 11,750.0-11,800.0 levels. On the flip side a drop below the 21-day moving average as well as the 11,520.0 levels will get traders thinking that the index may continue its downmove signaling a bearish sign. Meanwhile, both indicators are providing mixed signals suggesting the likely continuation of volatility. 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 5
Price % Change 5(Mar 06) Day % Change YTD Market Cap. QR Million TTM P/E P/B Div. Yield 191.00 (2.05) 11.05 133,648 14.1 2.5 3.7 Qatar Islamic Bank 75.00 (0.92) 8.70 17,722 13.3 1.5 5.3 Commercial Bank of Qatar 77.20 (0.90) 9.04 19,103 11.9 1.2 7.8 Doha Bank 61.50 (8.21) 5.67 15,890 10.7 1.4 7.3 Al Ahli Bank 50.80 (0.20) 20.07 8,392 16.0 2.4 N/A Qatar International Islamic Bank 76.50 1.59 23.99 11,580 15.4 2.2 4.6 Masraf Al Rayan 38.60 (0.90) 23.32 28,950 17.0 2.8 3.9 Al Khaliji Bank 21.05 (0.71) 5.30 7,578 13.8 1.3 4.8 National Leasing 28.45 (3.07) (5.64) 1,408 16.1 1.1 5.3 Dlala Holding 20.55 (1.49) (7.01) 456 N/M 2.0 N/A Qatar & Oman Investment 12.59 1.53 0.56 397 20.0 1.2 4.0 Islamic Holding Group 48.40 10.00 5.22 194 21.4 3.3 3.5 Company Name Qatar National Bank 245,317 Banking and Financial Services Zad Holding 70.80 1.14 1.87 926 9.4 0.7 5.7 Qatar German Co. for Medical Devices 13.97 0.58 0.87 161 N/M 0.9 N/A Salam International Investment 12.05 (6.88) (7.38) 1,377 12.1 0.8 8.3 Medicare Group 66.00 0.30 25.71 1,858 30.2 2.4 2.7 Qatar Cinema & Film Distribution 43.25 5.49 7.86 247 33.0 1.8 4.6 21,833 18.0 3.4 3.0 732 13.3 2.9 9.8 3,084 15.0 2.3 5.2 258.50 Qatar Meat and Livestock (0.28) 18.29 40.65 Qatar Fuel (3.44) (21.37) 2.12 15.68 154.20 Al Meera Consumer Goods 30,218 Consumer Goods and Services 44.40 0.53 5.30 2,110 10.4 1.5 5.6 Qatar National Cement 120.00 0.76 0.84 5,892 13.5 2.4 5.0 Industries Qatar 194.90 (0.56) 15.39 117,915 14.7 3.5 4.0 40.80 (1.69) (6.64) 5,073 23.0 2.4 1.8 Qatar Electricity and Water 170.00 (2.30) 2.80 18,700 13.5 3.1 4.0 Mannai Corp. 101.90 (4.23) 13.35 4,649 10.4 2.0 4.7 Aamal 13.95 (1.06) (7.00) 8,370 16.6 1.2 N/A Gulf International Services 91.60 13,618 20.1 4.4 1.6 Mesaieed Petrochem. Holding Co. 40.70 51,132 N/A N/A N/A Qatar Industrial Manufacturing Qatari Investors Group 6.88 (17.78) 50.16 N/A 227,458 Industrials Qatar Insurance 65.40 0.46 22.93 10,499 12.9 2.0 3.1 Doha Insurance 24.50 (0.81) (2.00) 631 9.4 1.1 8.2 Qatar General Insurance & Reinsurance 47.00 0.00 (1.88) 2,709 1.3 0.6 1.9 Al Khaleej Takaful Insurance 41.50 1.34 13.70 709 10.8 1.2 2.0 Qatar Islamic Insurance 69.20 2.98 19.52 1,038 16.3 3.8 5.1 15,586 Insurance United Development 21.48 0.37 (5.00) 7,244 22.4 0.7 4.7 Barwa Real Estate 32.05 (0.77) 7.55 12,471 18.3 1.0 4.7 Ezdan Real Estate 16.33 (2.68) (3.94) 43,315 N/M 1.6 0.8 Mazaya Qatar Real Estate Development 12.23 (1.37) 9.39 1,223 18.5 1.1 4.9 64,253 Real Estate 139.00 (7.33) 1.31 44,524 17.3 1.8 3.6 11.93 (1.57) 11.39 10,086 N/M 1.7 N/A Qatar Navigation (Milaha) 92.50 1.09 11.45 10,594 11.1 0.8 4.1 Gulf Warehousing 41.60 (3.26) 0.24 1,979 19.5 2.5 3.6 Qatar Gas Transport (Nakilat) Transportation 21.69 (0.28) 7.11 12,146 16.4 2.8 4.6 Qatar Telecom Vodafone Qatar 54,610 Telecoms 24,719 Qatar Exchange 662,161 Source: Bloomberg Contacts Saugata Sarkar Ahmed M. Shehada Keith Whitney Sahbi Kasraoui Head of Research Head of Trading Head of Sales Manager - HNWI Tel: (+974) 4476 6534 Tel: (+974) 4476 6535 Tel: (+974) 4476 6533 Tel: (+974) 4476 6544 firstname.lastname@example.org email@example.com firstname.lastname@example.org email@example.com QNB Financial Services SPC Contact Center: (+974) 4476 6666 PO Box 24025, Doha, Qatar DISCLAIMER: This publication has been prepared by QNB Financial Services SPC (“QNBFS”) a wholly-owned subsidiary of Qatar National Bank (“QNB”). QNBFS is regulated by the Qatar Financial Markets Authority and the Qatar Exchange; QNB 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. 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. While this publication has been prepared with the utmost degree of care by our analysts, QNBFS does not make any representations warranties as to the accuracy and completeness of the information it may contain, and declines any liability in that respect. 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. COPYRIGHT: No part of this document may be reproduced without the explicit written permission of QNBFS. Page 5 of 5
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