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10 September Daily market report

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10 September Daily market report

  1. 1. Page 1 of 7 QSE Intra-Day Movement Qatar Commentary The QSE Index gained 1.7% to close at 11,853.0. Gains were led by the Telecoms and Banks & Financial Services indices, rising 3.4% and 2.2%, respectively. Top gainers were Qatar Industrial Manufacturing Co. and Ooredoo, rising 4.4% and 4.2%, respectively. Among the top losers, Qatari Investors Group fell 3.2%, while Doha Insurance Co. was down 2.1%. GCC Commentary Saudi Arabia: The TASI Index fell 0.4% to close at 7,718.4. Losses were led by the Multi- Investment and Insurance indices, falling 1.1% and 0.8%, respectively. Gulf General Cooperative Ins. fell 4.0%, while National Agri. Marketing was down 2.9%. Dubai: The DFM Index declined 0.1% to close at 3,621.3. The Consumer Staples index fell 1.6%, while the Insurance index declined 0.7%. Takaful Al-Emarat Insurance fell 5.2%, while Al Salam Bank – Bahrain was down 2.7%. Abu Dhabi: The ADX benchmark index rose 0.8% to close at 4,537.6. The Consumer index gained 1.5%, while the Telecommunication index rose 1.4%. Abu Dhabi Ship Building gained 11.1%, while Union Cement Co. was up 3.8%. Kuwait: The KSE Index declined 0.7% to close at 5,764.9. The Financial Services index fell 1.2%, while the Oil & Gas index declined 1.1%. Flex Resorts & Real Estate Co. plunged 16.4%, while United Foodstuff Industries Group Co. was down 9.5%. Oman: The MSM Index fell marginally to close at 5,801.0. Losses were led by the Financial and Industrial indices, falling 0.2% and 0.1%, respectively. United Power fell 8.7%, while Renaissance Services was down 2.9%. Bahrain: The BHB Index declined marginally to close at 1,290.9. The Commercial Banks index fell 0.1%, while the other indices ended flat or in green. National Bank of Bahrain was down 0.7%. QSE Top Gainers Close* 1D% Vol. ‘000 YTD% Qatar Industrial Manufact. Co. 43.65 4.4 511.7 0.7 Ooredoo 74.80 4.2 265.8 (39.6) Qatar Islamic Bank 120.00 3.4 390.8 17.4 Qatar International Islamic Bank 79.00 3.4 84.9 (3.3) Masraf Al Rayan 44.85 2.5 1,155.2 1.5 QSE Top Volume Trades Close* 1D% Vol. ‘000 YTD% Mazaya Qatar Real Estate Dev. 16.36 2.2 2,289.3 (10.3) Ezdan Holding Group 18.70 0.6 1,456.1 25.3 Masraf Al Rayan 44.85 2.5 1,155.2 1.5 Vodafone Qatar 14.00 1.4 1,149.6 (14.9) Barwa Real Estate Co. 44.00 1.3 1,066.1 5.0 Market Indicators 10 Sep 15 9 Sep 15 %Chg. Value Traded (QR mn) 667.9 553.4 20.7 Exch. Market Cap. (QR mn) 623,779.2 613,583.7 1.7 Volume (mn) 14.9 14.0 6.6 Number of Transactions 7,444 7,725 (3.6) Companies Traded 39 41 (4.9) Market Breadth 25:11 35:3 – Market Indices Close 1D% WTD% YTD% TTM P/E Total Return 18,423.80 1.7 4.5 0.5 12.2 All Share Index 3,138.51 1.5 4.0 (0.4) 12.8 Banks 3,222.88 2.2 4.8 0.6 13.7 Industrials 3,590.71 1.4 4.0 (11.1) 12.5 Transportation 2,490.14 0.2 6.1 7.4 12.7 Real Estate 2,688.85 1.0 2.3 19.8 8.9 Insurance 4,659.74 (0.1) 1.4 17.7 12.3 Telecoms 1,011.76 3.4 7.6 (31.9) 29.5 Consumer 6,784.49 0.3 1.3 (1.8) 15.8 Al Rayan Islamic Index 4,492.00 1.3 4.2 9.5 13.1 GCC Top Gainers## Exchange Close# 1D% Vol. ‘000 YTD% Etihad Etisalat Co. Saudi Arabia 27.28 5.2 9,135.4 (37.8) Knowledge Eco. City Saudi Arabia 18.15 4.6 14,624.9 7.2 Qatar Ind. Manufact. Qatar 43.65 4.4 511.7 0.7 Saudi Airlines Catering Saudi Arabia 146.68 4.4 342.8 (21.1) Ooredoo Qatar 74.80 4.2 265.8 (39.6) GCC Top Losers## Exchange Close# 1D% Vol. ‘000 YTD% Agility Kuwait 0.60 (4.8) 2,277.5 (14.9) Nat. Real Estate Co. Kuwait 0.08 (3.6) 120.3 (35.6) Nat. Investments Co. Kuwait 0.11 (3.4) 4,106.7 (25.0) Qatari Investors Group Qatar 49.00 (3.2) 502.2 18.4 Al Ahli Bank of Kuwait Kuwait 0.32 (3.1) 4,342.9 (23.2) Source: Bloomberg (# in Local Currency) (## GCC Top gainers/losers derived from the Bloomberg GCC 200 Index comprising of the top 200 regional equities based on market capitalization and liquidity) QSE Top Losers Close* 1D% Vol. ‘000 YTD% Qatari Investors Group 49.00 (3.2) 502.2 18.4 Doha Insurance Co. 23.48 (2.1) 5.5 (19.0) Islamic Holding Group 118.20 (1.4) 215.7 (5.1) Qatar Islamic Insurance Co. 74.50 (0.7) 12.0 (5.7) Mannai Corp. 94.40 (0.4) 19.5 (13.4) QSE Top Value Trades Close* 1D% Val. ‘000 YTD% Gulf International Services 62.00 2.5 52,801.3 (36.1) Masraf Al Rayan 44.85 2.5 51,056.7 1.5 Industries Qatar 135.00 2.5 49,452.6 (19.6) QNB Group 195.80 2.5 48,902.2 (8.0) Qatar Islamic Bank 120.00 3.4 46,582.6 17.4 Source: Bloomberg (* in QR) Regional Indices Close 1D% WTD% MTD% YTD% Exch. Val. Traded ($ mn) Exchange Mkt. Cap. ($ mn) P/E** P/B** Dividend Yield Qatar 11,853.01 1.7 4.5 2.5 (3.5) 183.39 171,289.8 12.2 1.8 4.3 Dubai 3,621.25 (0.1) 1.4 (1.1) (4.0) 72.42 94,698.9 11.7 1.1 7.2 Abu Dhabi 4,537.56 0.8 3.6 1.0 0.2 43.61 123,893.5 12.1 1.4 5.0 Saudi Arabia 7,718.40 (0.4) 4.5 2.6 (7.4) 1,653.67 461,115.4 16.5 1.8 3.4 Kuwait 5,764.92 (0.7) 0.1 (1.0) (11.8) 52.75 89,165.4 14.7 1.0 4.5 Oman 5,800.99 (0.0) 0.9 (1.2) (8.5) 10.54 23,590.8 10.6 1.4 4.5 Bahrain 1,290.90 (0.0) (0.7) (0.6) (9.5) 0.71 20,191.4 8.2 0.8 5.3 Source: Bloomberg, Qatar Stock Exchange, Tadawul, Muscat Securities Exchange, Dubai Financial Market and Zawya (** TTM; * Value traded ($ mn) do not include special trades, if any) 11,500 11,600 11,700 11,800 11,900 9:30 10:00 10:30 11:00 11:30 12:00 12:30 13:00
  2. 2. Page 2 of 7 Qatar Market Commentary  The QSE Index gained 1.7% to close at 11,853.0. The Telecoms and Banks & Financial Services indices led the gains. The index rose on the back of buying support from non-Qatari and GCC shareholders despite selling pressure from Qatari shareholders.  Qatar Industrial Manufacturing Co. and Ooredoo were the top gainers, rising 4.4% and 4.2%, respectively. Among the top losers, Qatari Investors Group fell 3.2%, while Doha Insurance Co. was down 2.1%.  Volume of shares traded on Thursday rose by 6.6% to 14.9mn from 14.0mn on Wednesday. Further, as compared to the 30-day moving average of 7.2mn, volume for the day was 106.8% higher. Mazaya Qatar Real Estate Development and Ezdan Holding Group were the most active stocks, contributing 15.3% and 9.7% to the total volume, respectively. Source: Qatar Stock Exchange (* as a % of traded value) Global Economic Data Global Economic Data Date Market Source Indicator Period Actual Consensus Previous 09/10 US Bureau of Labor Statistics Import Price Index YoY August -11.40% -11.10% -10.50% 09/10 US Department of Labor Initial Jobless Claims 5-September 275K 275K 281K 09/10 US Bloomberg Bloomberg Consumer Comfort 6-September 41.4 – 41.4 09/10 US Census Bureau Wholesale Inventories MoM July -0.10% 0.30% 0.70% 09/10 US Census Bureau Wholesale Trade Sales MoM July -0.30% 0.10% 0.40% 09/11 US Bureau of Labor Statistics PPI Ex Food, Energy, Trade MoM August 0.10% 0.10% 0.20% 09/11 US Bureau of Labor Statistics PPI Final Demand YoY August -0.80% -0.90% -0.80% 09/11 US Bureau of Labor Statistics PPI Ex Food, Energy, Trade YoY August 0.70% 0.70% 0.90% 09/11 US US Treasury Monthly Budget Statement August -$64.4B -$73.5B -$128.7B 09/10 France INSEE Industrial Production YoY July -0.80% 0.70% 0.70% 09/10 France INSEE Manufacturing Production YoY July -1.30% 0.70% 0.20% 09/11 France Banque De France Current Account Balance July -0.4B – 0.8B 09/11 Germany Destatis Wholesale Price Index MoM August -0.80% – 0.10% 09/11 Germany Destatis Wholesale Price Index YoY August -1.10% – -0.50% 09/10 UK Royal Institution of Chartered RICS House Price Balance August 53% 46% 44% 09/10 UK Bank of England BOE Asset Purchase Target September 375B 375B 375B 09/10 UK Bank of England Bank of England Bank Rate 10-September 0.50% 0.50% 0.50% 09/11 UK ONS Construction Output SA MoM July -1.00% 0.50% 0.90% 09/11 UK ONS Construction Output SA YoY July -0.70% 0.90% 2.60% 09/11 Spain INE CPI Core MoM August 0.10% – -1.00% 09/11 Spain INE CPI Core YoY August 0.70% – 0.80% 09/11 Italy ISTAT Industrial Production WDA YoY July 2.70% 0.90% -0.30% 09/11 Italy ISTAT Industrial Production NSA YoY July 2.70% – 2.90% 09/10 China National Bureau of Statistics CPI YoY August 2.00% 1.80% 1.60% 09/10 China National Bureau of Statistics PPI YoY August -5.90% -5.60% -5.40% 09/10 China National Bureau of Statistics Foreign Direct Investment YoY CNY August 22.00% – 5.20% 09/11 China The People's Bank of China Money Supply M2 YoY August 13.30% 13.30% 13.30% 09/11 China The People's Bank of China Money Supply M0 YoY August 1.80% 3.00% 2.90% 09/11 China The People's Bank of China Money Supply M1 YoY August 9.30% 6.80% 6.60% 09/11 China National Bureau of Statistics New Yuan Loans CNY August 809.6B 850.0B 1,480.0B 09/11 China National Bureau of Statistics Aggregate Financing CNY August 1,080.0B 1,000.0B 718.8B Source: Bloomberg (s.a. = seasonally adjusted; n.s.a. = non-seasonally adjusted; w.d.a. = working day adjusted) Overall Activity Buy %* Sell %* Net (QR) Qatari 48.40% 68.63% (135,137,250.99) GCC 15.91% 6.93% 59,974,199.14 Non-Qatari 35.69% 24.44% 75,163,051.85
  3. 3. Page 3 of 7 News Qatar  FTSE upgrades Qatar’s emerging market status – FTSE Russel, the global leader in indexing, has upgraded the Qatari market to the Secondary Emerging Market. Following its September 2015 annual review, FTSE announced Qatar would be promoted from the Frontier to the Secondary Emerging Market since it meets the criteria required for the upgrade. Qatar has already been upgraded by two other global index compilers MSCI and S&P, in May 2014 and September 2014, respectively. Qatar, along with 10 other markets, including China and Kuwait, were placed in the FTSE watch list to be considered for the September 2015 market classification review for the upgrade at different levels. Of this, just three markets found their places in the upgraded list. While China A-Shares remained on Watch List for possible inclusion as the Secondary Emerging, Kuwait failed to be included in the list this time. The FTSE Emerging Markets Indices are a part of the FTSE Global Equity Series (GEIS). The index helps investors analyze the performance of the most liquid companies in emerging markets. The index includes several large and mid-cap stocks from advanced and secondary emerging markets. China had the highest weight age (26.6%) in this index, followed by Taiwan (14.1%) and India (12.6%). (Peninsula Qatar)  QSE suspends trading of GWCS shares on September 13 – The Qatar Stock Exchange (QSE) has suspended trading of Gulf Warehousing Company’s (GWCS) shares on September 13, 2015 due to the company’s EGM being held during the day. (QSE)  14 new malls in MERS Qatar expansion strategy – Al Meera Consumer Goods Co. (MERS) is pursuing an expansion strategy to construct around 14 new shopping malls across Qatar even as the retail major opened its 40th state-of-the-art outlet in Al Wajba recently. The company’s ambitious plan is to open 56 outlets in different areas of Qatar. MERS deputy CEO Dr. Mohamed Nasser al- Qahtani said the company is committed to provide a unique and all-inclusive service to all segments of the Qatari community and looks forward to the opening of new outlets, which is a way of supporting Qatar National Vision. He explained that the new branch would be serving the Al Wajba area, in addition to the New Rayyan, Muaither, Rawdat Abal Heeran, and Al Sailiya until the completion of the new branches in those areas. The 4,300-square meter (sqm) Al Wajba branch constitutes 2,022 sqm of supermarket area. Al-Qahtani said MERS would launch two more branches in 2015 at Al Thumama and Rawdat Ekdeem, which will open its doors weeks apart after obtaining the necessary approvals and licenses from authorities. (Gulf-Times.com)  Milaha appoints Abdulrahman Essa al-Mannai as president & CEO – Qatar Navigation (Milaha) has appointed Abdulrahman Essa al- Mannai as the President and Chief Executive Officer with effect from September 12, 2015. Al-Mannai previously led the commercial planning & allocation functions at Qatargas. He will succeed Khalifa Ali al-Hetmi, who had previously announced his plan to retire. (Gulf-Times.com)  Low oil prices not to affect Qatar mega mall – Mall of Qatar Deputy Managing Director Shem Krey said he sees no risk to the $1bn project from the low oil prices and expects to have signed up retailers for all the space by 2015-end. The mall, next to the stadium that is due to host the 2022 FIFA World Cup, is set to open in August 2016, hosting 500 stores, including a Carrefour hypermarket. (Reuters)  ORDS: Qatar building ‘smart’ stadiums – Ooredoo (ORDS) Chief New Business Officer Sheikh Nasser bin Hamad bin Nasser al- Thani has said that Qatar is building world-class smart stadiums that will transform the experience of watching and attending sporting events. Speaking at the Soccerex Global Convention 2015 held in England, Sheikh Nasser said Ooredoo’s vision will support the creation of next generation of stadiums, which will deploy the latest network technology to transform the experience of watching sport. (Gulf-Times.com)  Kahramaa meets high demand for electricity – Qatar General Electricity & Water Corporation (Kahramaa) has said that it managed to meet an increased demand for electricity in the summer, especially during the holy month of Ramadan and Eid al- Fitr, through the National Control Centre. In a statement, Kahramaa said the growth in demand was due to the high temperature witnessed during the period mentioned above. Besides, the statement noted that the maximum system demand recorded in June and July was 6,890 megawatt (MW) (June 6) and 6,985 MW (July 29), respectively. (Gulf-Times.com)  D&B: Qatar 3Q2015 business outlook stays strong despite BOI drops in previous quarters – According to a recent report by Dun & Bradstreet (D&B), the outlook for the overall business environment in Qatar remains strong despite the decline in the composite Business Optimism Index (BOI) over the last two quarters. The 3Q2015 BOI report, conducted by D&B and sponsored by the Qatar Financial Centre (QFC), shows that although planned expansion activities have lost some traction in both the hydrocarbon and non-hydrocarbon sectors, the overall business environment outlook still remains strong. The construction sector forecast declined from a BOI of 46 in 2Q2015 to 34 in 3Q2015 on the back of competition, drying up of new projects and reduced business activity during the summer season. This ‘off-season’ also saw the composite BOI for the trade & hospitality sector reach its second lowest level in six years, dropping from 28 in 2Q2015 to 6 in 3Q2015. The outlook for the finance, real estate and business services sector also revealed a weaker third quarter with a 15-point decrease, from 49 in 2Q2015 to 34 in 3Q2015. Despite the decline in scores for the transport & communications sector, expectations over securing new projects and orders in the coming quarter remained firm. (Gulf-Times.com)  Moody’s: Barwa Bank gains foothold in Qatar’s growing Islamic banking sector – According to a report released by Moody’s Investors Service, state-owned Barwa Bank has found its niche in Qatar’s growing Islamic banking sector, benefiting from the country's strong economy and favorable operating environment. The bank’s loan book grew 19% in 2014 as compared with 13% for the system. Moody's expects it to grow by 10-15% in 2015. Nevertheless, the bank’s asset quality may remain stable over the next 12 to 18 months, with any weakening in the credit quality of borrowers to be limited by the supportive operating environment. Assistant Vice President – Analyst at Moody’s Arif Bekiroglu said continued high public spending would continue to create further business opportunities for local banks, particularly those with well-established government links like Barwa. Furthermore, Barwa would benefit from regulators’ policies, which prohibit conventional financial institutions operating Shari’ah-compliant banking windows and reduce the competition for a fast-growing customer segment. (Moody’s)  Al Futtaim-Voltas Qatar JV wins QR500mn MEP contract at Doha Festival City – Al Futtaim Engineering’s Hamad & Mohamad Al Futtaim and Voltas Qatar have been awarded a QR500mn contract related to the Doha Festival City project. The joint venture (JV) bagged the mechanical, electrical and plumbing (MEP) contract for Doha Festival City Mall, which is expected to be completed by 2016. Doha Festival City Mall, with a gross leasable area of around 250,000 square meters will comprise of 550 outlets, including 85 restaurants and cafes, VOX Cinemas and a snow park. It will feature around 8,000 parking spaces. (Bloomberg)
  4. 4. Page 4 of 7  New projects reaffirm Qatar 2030 plan on course – Qatar News Agency (QNA) has reported that the Supreme Council for Economic Affairs & Investment has decided to construct 2,000 villas spread over 2.5 million square meters in south Doha at an estimated cost of QR10bn in four years. The decision reaffirms that Qatar National Vision 2030 is on course as per the directives of Qatar’s Emir HH Sheikh Tamim bin Hamad Al-Thani. ‘Al Sharq’ daily newspaper said that the construction of villas would spur the real estate sector by attracting developers, investors and benefit private companies. (Bloomberg)  Early salary payments for Eid al-adha – According to Qatar News Agency (QNA), the government will pay the salaries of its employees, retirees and beneficiaries of social security on September 20, 2015 on account of Eid al-Adha. (Gulf-Times.com) International  US consumer sentiment drops in September to lowest level in a year – US consumer sentiment declined in September to the lowest level in a year as Americans anticipated a weaker economy in the face of a global slowdown and turbulent financial markets. The University of Michigan’s preliminary index dropped to 85.7 from an August reading of 91.9, the largest one-month decline since the end of 2012. Households were less upbeat than a few months earlier about future growth in employment and wages, while 73% of respondents reported hearing of negative economic developments. The sentiment survey’s current conditions index, which measures Americans’ assessment of their personal finances, decreased to an 11-month low of 100.3 from a 105.1 in August. The measure of expectations six months from now fell to 76.4, the weakest in a year, from 83.4. With the turmoil in global markets, consumers will need to see continued strength in employment in order to stay positive on the economy. (Bloomberg)  BoE keeps rate on hold, unfazed by overseas risks – The Bank of England (BoE) has said that its rate-setters felt the threat to the world economy from China’s stock-market slump did not signal a slowdown for Britain, as they left interest rates at a record-low of 0.5% on September 10. Policy makers voted 8-1 to keep rates unchanged as expected. They broadly agreed with Governor Mark Carney, who has said that so far, China’s slowdown is unlikely to derail the plan to gradually raise British rates. The BoE’s decision followed a month of declines on global stock markets, driven by financial turmoil in China and signs of some weakness in Britain’s economic recovery. However, a minority of policy makers saw a danger that near-zero inflation could rise faster than forecasted and exceed its 2% target in a couple of years, suggesting they would not take much more persuading to back a rate hike. The central bank staff trimmed their forecast for 3Q2015 growth to 0.6% from 0.7%, roughly in line with Britain’s average rate of growth. (Reuters)  China central bank enhances reserve requirement flexibility – China’s central bank is making its reserve requirement rules more flexible for banks to reduce the risk of an abrupt tightening in liquidity in the world’s second-largest economy as it cools. The People’s Bank of China (PBOC) said the amount of deposits that banks must set aside as reserves at the central bank would soon be regulated on an average basis as opposed to current daily assessments. The change, effective from September 15, would help banks combat sudden funding pressures at a time of heightened volatility in the yuan that has driven capital from China. Under the changes, banks can report a daily reserve requirement ratio (RRR) that is up to 100 basis points lower than the rate set by the PBOC, but their daily average RRR in the assessed period cannot fall under the required level. The PBOC said the new rule would allow banks to set aside less reserves when they are strapped for funds, but would not be a free pass for lenders to lapse into overdrafts. (Reuters)  CBR holds rate as economic woes mount – The Central Bank of Russia (CBR) left its main lending rate on hold as expected on Friday, for now putting concerns about stubbornly high inflation before worries about a slumping economy. The bank left its policy rate unchanged at 11%, following five successive cuts in 2015 that have reduced the rate by six percentage points after an emergency hike to 17% in December 2014. The decision to hold rates steady underscores the harsh policy dilemmas facing Russia as it simultaneously grapples with rising double-digit inflation and an economy in the throes of its deepest slump since 2009. The bank predicted that oil prices would remain around $50 per barrel for at least the next three years, and saw annual GDP returning to growth only in 2017. CBR forecasted GDP would decline by 3.9- 4.4% in 2015 and by 0.5-1% in 2016, revising down previous forecasts. (Reuters) Regional  ABCC: UAE ranks first among Arab countries in attracting FDI – The UAE has ranked first among Arab countries in attracting Foreign Direct Investment (FDI), which amounted to $10.1bn in 2014, followed by Saudi Arabia and Egypt at $8bn and $4.8bn, respectively. According to the Arab-Brazilian Chamber of Commerce (ABCC), the total FDI flowing to the Arab world stood at $43.9bn during 2014. The GCC region has received almost half of the resources that were invested in the Arab world in 2014. On the other hand, the Arab countries made FDIs worth $33.4bn in total. Kuwait was the biggest investor in the region with an investment of $13mn during 2014. (GulfBase.com)  ANB Insurance approves SR53.8mn insurance policy for ANB staff – MetLife AIG ANB Cooperative Insurance Company (ANB Insurance) has approved the issuance of a health insurance policy for the Arab National Bank (ANB) staff at an annual premium of SR53.8mn. The policy, which is set to start on September 17, will remain active for a 12-month period, while the financial impact of this will be reflected in the financial results of 3Q2015. (Tadawul)  SAMA to appoint KPMG partner as Deputy Governor for supervision – According to sources, the Saudi Arabian Monetary Agency (SAMA) is set to appoint KPMG Saudi Arabia’s Managing Partner Tareq al-Sadhan as its new Deputy Governor for supervision. (Reuters)  Saudi Aramco signs contract with Azmeel to build staff homes – State-owned Saudi Arabian Oil Company (Saudi Aramco) is planning to build 8,521 homes for its employees, as well as schools and community facilities, on 10-square kilometers of land in Dhahran. Saudi Aramco has signed a contract with Saudi-based Azmeel Contracting to build the first 955 housing units. The contract for the remaining 1,821 dwellings in Phase I of the South Dhahran Home Ownership Program (SDHOP) is expected to be awarded later in 2015. (GulfBase.com)  Saudi ICT sector spending may exceed SR138bn by 2017 – The Ministry of Interior (MoI) has announced that the Kingdom of Saudi Arabia will serve as the Official Country Partner for GITEX Technology Week 2015 – the largest technology event in the Middle East, Africa, and South Asia. Saudi Arabia’s information & communications technology (ICT) sector has expanded significantly over the past 10 years and remains on a strong growth trajectory. Over the next five years, the ICT market is expected to expand at a CAGR of 8.1% to exceed SR138bn in 2017. According to a report by IDC & Mobily, public sector investment in ICT will play a key role in Saudi Arabia’s nationwide digital transformation, with the Kingdom’s public sector IT spending set to grow by 44% from 2014-2017. (GulfBase.com)
  5. 5. Page 5 of 7  NCB: Saudi may record largest fiscal deficit in 2015 – According to the National Commercial Bank (NCB), Saudi Arabia is expected to reel under its largest fiscal deficit in 2015 because of a sharp decline in oil prices and higher spending. NCB said the break-even oil price needed for the Gulf Kingdom to balance its budget through 2015 is around $91.9 per barrel, however actual crude prices could be as low as $65 per barrel. The sharp fall in oil prices is projected to depress Saudi Arabia’s actual revenue by a huge 29% to SR741bn in 2015 from SR1,044bn in 2014. Actual spending is expected to shrink by only around 7% to SR1,032bn in 2015 from SR1,109bn in 2014. As a result, the actual deficit could peak at an all-time high of SR290bn in 2015, over quadruple the 2014 gap of SR65.5bn. Experts said the 2015 deficit would be Saudi Arabia’s highest fiscal gap since the largest Arab economy began exporting oil in commercial quantities decades ago. Announcing its budget for 2015, Saudi Arabia projected revenue at SR715bn and expenditure at SR860bn, leaving a forecast shortfall of SR145bn. (GulfBase.com)  Rights option still open for Aabar Investments – RHB Capital Managing Director Datuk Khairussaleh Ramli has said that Aabar Investments cannot be ruled out from the Malaysian Ringgit 2.5bn rights issue being called by RHB Capital. Although it has not given its commitment for the rights, it can still subscribe to its portion at the entitlement date. RHB Investment Bank, Affin Hwang Investment Bank, CIMB Investment Bank, Credit Suisse Securities (Malaysia), Maybank Investment Bank and Public Investment Bank have committed to underwrite 250.8mn shares representing around 48.45% of the rights Issue. The remaining 266.9mn rights shares, representing 51.55% of the total rights shares, are the entitlements of the Employees Provident Fund Board and OSK Holdings, the substantial shareholders of RHB Capital, for which they have provided written undertakings to subscribe in full for their respective entitlements. Consequently, bankers say that it would be difficult for Aabar to continue to maintain its stake in the bank, which currently stands at 21.09%, if it continues to receive cash as opposed to reinvesting its monies under the RHB Capital dividend reinvestment plan. (GulfBase.com)  Aramex, Orascom Telecom in talks to build logistics areas in Egypt – Aramex has confirmed that it is in discussions with Orascom Telecom Media and Technology Holding to create five logistics areas in Egypt. However, Aramex has not signed any agreement related to this matter. (DFM)  DEWA’s AED250mn substation construction on track – Dubai Electricity & Water Authority (DEWA) has said that it is progressing according to the plan with the construction of the 400/132kV substation at the Mohammed bin Rashid Al Maktoum Solar Park. The project includes supplying, installing, testing and commissioning the 400/132kV substation with four 400kV cables. Around 30% of the project’s engineering work has been completed. The substation is being built at a cost of AED250mn and has a 505 megavolt amperes (MVA) transmission capacity, and is due to be completed by November 2016. Another substation with the same capacity will be built to transmit the solar energy of the Solar Park, which is expected to reach 3,000 megawatt by 2030. (Bloomberg)  Union Properties seeks $123mn loan to fund project – Union Properties is in talks with a UAE bank to borrow up to around $123mn to fund a 271-unit project in the Emirate. Union Properties said that it will also launch a tender for the construction contract of its Oia residential development in October 2015. Union Properties General Manager Ahmad al-Marri predicted that this would be awarded in January or February 2016. He said the loan is likely to be signed in mid-2016, while the Oia project will be finished in 2018. (Reuters)  Kuwait to buy 28 Eurofighters jets for $9bn – Kuwait has signed an MoU to buy 28 Eurofighter jets in a deal worth up to $9bn. The Eurofighter aircraft are produced by Italy’s Finmeccanica, BAE Systems and Airbus. According to sources, the 20-year-long deal with Kuwait would be finalized in a few weeks. Reportedly, Kuwait is also continuing separate negotiations with the US government for buying 24 Boeing Co F/A-18E/F Super Hornets, a deal valued at over $3bn. (Reuters)  Kuwait signs KD116mn solar energy project with Spanish group – Kuwait has signed a KD116mn contract with Spain-based TSK Group for a 50 megawatt (MW) solar energy project as part of its renewable energy drive. Kuwait has a multi-billion-dollar plan to meet 15% of power demand from renewable sources by 2030. The country is targeting to produce 4,500 MW from solar and wind energy by 2030 when demand is expected to rise to 30,000 MW from the current 12,000 MW. The latest project is due to start production in December 2017, while two smaller projects of 10- MW capacity each are expected to come on stream in May 2016 and July 2016. The initial three projects have been funded by the government but future ones will be awarded to the private sector on a Build-Operate-Transfer basis. When complete, the project will meet the electricity demand of 100,000 homes and save about 12.5mn barrels of oil equivalent per year. (Gulf Times) page no. 3  Al Jazeira Services receives offer to sell 36.99% stake in Al Anwar Ceramics Tiles – Al Jazeira Services has received a preliminary offer to sell its entire stake, which is 36.99% in Al Anwar Ceramics, at a price of 370 baizas per share. Following the approval and acceptance of the offer, the acquirer would commence requisite legal, financial and commercial due diligence. The company’s board will meet on September 15, 2015 to discuss the offer. (MSM)  Orpic’s GDP impact to rise to 9% by 2018 – Oman Oil Refineries & Petroleum Industries Company (Orpic) is expecting to witness its contribution to the economy boosted to around 8-9% of the GDP (equivalent to $6.5bn in value terms) in 2018, when a trio of big- ticket projects is scheduled for completion. This compares with a current contribution of 6% as of 2014, equivalent to a GDP impact annualized value of $4.2bn. The company is investing an estimated $8bn in three ‘strategic growth projects’ that will effectively triple the value of its asset base. (GulfBase.com)  Zain, Uber announce partnership across Middle East – Zain Group has entered into a group-wide agreement with Uber to offer Zain customers discounted and preferential services when using the Uber platform. The joint agreement is the first of its kind in the region, and already has been effective and operational in Bahrain, Jordan and Saudi Arabia. Preferential services will soon be launched in Kuwait for Zain customers. The agreement will see Uber choosing Zain as its mobile launch partner and main mobile service provider for any new future Uber service in any country, where Zain operates. Uber is an American international transportation network company. (Bahrain Bourse)  Batelco signs key WiFi agreement – Bahrain Telecommunication Company (Batelco) has signed an agreement with the Capital Municipal Council to deploy the latest communications technologies in Bahrain. Under the agreement, Batelco will install WiFi hotspots at a number of locations throughout the Capital Governorate to serve the public. (GulfBase.com)  BFH signs agreement with JLL – The Bahrain Financial Harbour (BFH) has signed an agreement appointing JLL as its strategic leasing advisor. The partnership will highlight the property’s many unique features and advantages to regional and international organizations looking to relocate, or set up operations in the GCC. (BNA)  Seera Investment Bank sells Kosan Crisplant for $63.5mn – Bahrain’s Seera Investment Bank has sold Kosan Crisplant to a
  6. 6. Page 6 of 7 regional strategic buyer for $63.5mn. Kosan Crisplant is a Denmark-based provider of systems and solutions for filling and reconditioning liquefied petroleum gas (LPG) cylinders. (Bloomberg)
  7. 7. Contacts Saugata Sarkar Sahbi Kasraoui QNB Financial Services SPC Head of Research Head of HNI Contact Center: (+974) 4476 6666 Tel: (+974) 4476 6534 Tel: (+974) 4476 6544 PO Box 24025 saugata.sarkar@qnbfs.com.qa sahbi.alkasraoui@qnbfs.com.qa Doha, Qatar Disclaimer and Copyright Notice: This publication has been prepared by QNB Financial Services SPC (“QNBFS”) a wholly-owned subsidiary of QNB SAQ (“QNB”). QNBFS is regulated by the Qatar Financial Markets Authority and the Qatar Exchange QNB SAQ is regulated by the Qatar Central Bank. This publication expresses the views and opinions of QNBFS at a given time only. It is not an offer, promotion or recommendation to buy or sell securities or other investments, nor is it intended to constitute legal, tax, accounting, or financial advice. QNBFS accepts no liability whatsoever for any direct or indirect losses arising from use of this report. Any investment decision should depend on the individual circumstances of the investor and be based on specifically engaged investment advice. We therefore strongly advise potential investors to seek independent professional advice before making any investment decision. Although the information in this report has been obtained from sources that QNBFS believes to be reliable, we have not independently verified such information and it may not be accurate or complete. QNBFS does not make any representations or warranties as to the accuracy and completeness of the information it may contain, and declines any liability in that respect. For reports dealing with Technical Analysis, expressed opinions and/or recommendations may be different or contrary to the opinions/recommendations of QNBFS Fundamental Research as a result of depending solely on the historical technical data (price and volume). QNBFS reserves the right to amend the views and opinions expressed in this publication at any time. It may also express viewpoints or make investment decisions that differ significantly from, or even contradict, the views and opinions included in this report. This report may not be reproduced in whole or in part without permission from QNBFS COPYRIGHT: No part of this document may be reproduced without the explicit written permission of QNBFS. Page 7 of 7 Rebased Performance Daily Index Performance Source: Bloomberg Source: Bloomberg Source: Bloomberg Source: Bloomberg (*$ adjusted returns) 80.0 100.0 120.0 140.0 160.0 180.0 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 QSE Index S&P Pan Arab S&P GCC (0.4%) 1.7% (0.7%) (0.0%) (0.0%) 0.8% (0.1%) (1.2%) (0.6%) 0.0% 0.6% 1.2% 1.8% SaudiArabia Qatar Kuwait Bahrain Oman AbuDhabi Dubai Asset/Currency Performance Close ($) 1D% WTD% YTD% Global Indices Performance Close 1D%* WTD%* YTD%* Gold/Ounce 1,107.78 (0.3) (1.4) (6.5) MSCI World Index 1,626.99 0.1 2.0 (4.8) Silver/Ounce 14.61 (0.5) 0.2 (6.9) DJ Industrial 16,433.09 0.6 2.1 (7.8) Crude Oil (Brent)/Barrel (FM Future) 48.14 (1.5) (3.0) (16.0) S&P 500 1,961.05 0.4 2.1 (4.8) Crude Oil (WTI)/Barrel (FM Future) 44.63 (2.8) (3.1) (16.2) NASDAQ 100 4,822.34 0.5 3.0 1.8 Natural Gas (Henry Hub)/MMBtu 2.66 (1.6) (0.2) (11.0) STOXX 600 355.72 (0.3) 2.6 (2.6) LPG Propane (Arab Gulf)/Ton 44.62 (0.3) 3.2 (8.9) DAX 10,123.56 (0.1) 2.7 (3.7) LPG Butane (Arab Gulf)/Ton 57.00 (0.4) 1.8 (13.0) FTSE 100 6,117.76 (0.7) 2.8 (7.7) Euro 1.13 0.5 1.7 (6.3) CAC 40 4,548.72 (0.3) 2.4 (0.2) Yen 120.59 (0.0) 1.3 0.7 Nikkei 18,264.22 (0.3) 1.2 3.6 GBP 1.54 (0.1) 1.7 (1.0) MSCI EM 802.49 (0.2) 1.8 (16.1) CHF 1.03 0.4 0.2 2.6 SHANGHAI SE Composite 3,200.23 0.1 1.0 (3.7) AUD 0.71 0.3 2.7 (13.2) HANG SENG 21,504.37 (0.3) 3.2 (8.9) USD Index 95.19 (0.3) (1.1) 5.5 BSE SENSEX 25,610.21 0.1 2.2 (11.3) RUB 68.00 0.4 (0.7) 12.0 Bovespa 46,400.50 (1.4) (1.3) (36.7) BRL 0.26 (0.5) (0.7) (31.5) RTS 799.10 (0.2) 0.7 1.1 141.9 118.3 113.4

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