Foreign Fund Flows (FFF) October 2015 Trading Review Equities MENA Friday, 13 November 2015

Transcription

1 Foreign Fund Flows (FFF) October 215 Trading Review Equities MENA Friday, 13 November 215 Oil prices still the key driver for macro and equity performance in MENA markets; foreigners net sellers in Saudi Arabia, Oman, and Kuwait In October 215, foreigners were net sellers with net outflows of USD191mn versus net inflows of USD712mn the month before. Foreigners were net sellers in Kuwait, Oman (for the second consecutive month), and Saudi Arabia (cumulative outflows of USD363mn). Meanwhile, foreigners were net buyers in the UAE, Qatar, and Egypt (cumulative net inflows of USD172.5mn). For the last 12 months, foreigners were net buyers in major MENA markets (except for Oman and Saudi Arabia). The UAE and Qatar are still foreigners most preferred markets. MENA markets showed a mixed performance in October 215, while the continued decline in oil prices remained the main topic. The IMF warned that Saudi Arabia may run out of financial assets within the next five years if the government maintains its current policies. The IMF estimates that the kingdom will face a budget deficit of around 22% of GDP this year. Saudi Arabia s CMA is studying the possibility of allowing institutional investors with less than USD5bn of assets under management (AUMs) to own shares. The UAE trimmed its federal budget for next year by 1.1%. In view of continued low oil prices, the UAE is open to impose taxes in the coming period. The UAE oil sector is expected to see a slowdown of about 23% if oil prices will not rebound from the current levels. Meanwhile, Qatar s trade surplus fell 53% YoY to QAR43.3bn in Q2 215 driven by lower energy exports. Also, Kuwait's sovereign wealth fund is considering selling assets to cover the state budget deficit caused by low oil prices. Lastly, the Egyptian pound weakened during the month to EGP7.93 versus the US dollar compared to EGP7.73 earlier. Egypt launched the first round of its longawaited parliamentary elections since June 212 but with a relatively low turnout. Page 1 Index Level % Change ADT () % Change Market Sep15 Oct15 MoM Sep15 Oct15 MoM Oman 5, , % % Egypt 7, , % % Qatar 11, , % % Kuwait 5,726. 5, % % UAE (DFM) 3, , % % Saudi Arabia 7,44.1 7, % 1,246 1,31 4% UAE (ADX) 4,52.8 4, % % Mohamed Hamdy Manager Equity Analysis Mubasher International Mohamed.Hamdy@MubasherFS.com Net trading by foreigners in key MENA markets (Egypt and GCC, exbahrain) 1,5 1, 5 5 1, 1,5 Phebe Sobhy Equity Analyst Mubasher International Phebe.Sobhy@MubasherFS.com 1,5 1, 5 5 1, 1,5 Abu Dhabi Dubai Egypt Kuwait Oman Qatar Saudi Arabia Total Note: Foreigners include Arabs and GCC in Qatar and nongcc Arabs in Saudi Arabia. Sources: Countries stock exchange websites, Bloomberg, MubasherTrade Research Mahmoud Mostafa Equity Analyst Mubasher International Mahmoud.Mostafa@MubasherFS.com Month Abu Dhabi Dubai Egypt Kuwait Oman Qatar Saudi Arabia Total Nov (21.1) (25.4) (16.6) Dec14 (91.4) (1.6) (46.4) (55.2) (151.8) (275.8) Jan15 (6.4) (143.1) (4.6) 52.3 (18.7) (69.5) (25.2) (53.2) Feb (2.5) (2.5) 85.9 (37.3) 162. Mar (23.8) (58.5) (29.5) (116.9) (162.4) (119.6) Apr (26.4) May (24.) (31.9) 85. Jun (24.6) 6. (25.2) 13.6 Jul (73.3) (66.7) Aug (45.2) (31.1) (4.2) (28.3) (136.) (76.) Sep (9.7) (9.5) Oct (29.3) (47.5) 51.4 (286.6) (19.8) Trailing 12M (269.5) (385.9) 2,165.1 All figures in

2 Foreign Fund Flows (FFF) October 215 Trading Review Friday, 13 November 215 Table of Contents MARKETS MONTHLY OVERVIEW Egypt and Kuwait 3 Oman and Qatar 4 Saudi Arabia and UAE 5 EGYPT Monthly Breakdown 6 Historical Trend 7 KUWAIT Monthly Breakdown 9 Historical Trend 1 OMAN Monthly Breakdown 12 Historical Trend 13 SAUDI ARABIA Monthly Breakdown 19 Historical Trend 2 UAE (ABU DHABI) Monthly Breakdown 22 Historical Trend 23 Top Stocks Inflows/Outflows 25 UAE (DUBAI) Monthly Breakdown 26 Historical Trend 27 Top Stocks Inflows/Outflows 29 QATAR Monthly Breakdown 15 Historical Trend 16 Top Stocks Inflows/Outflows 18 Page 2

3 Foreign Fund Flows (FFF) October 215 Trading Review Friday, 13 November 215 Markets Monthly Overview +2.4% +.9% EGYPT In Egypt, Tarek Amer was appointed as a governor of the Central Bank of Egypt (CBE), succeeding Hisham Ramez, who resigned on 22 October 215. The CBE has issued instructions to all banks to accept cash deposits in foreign currency from exports to Libya, Syria, Sudan, Palestine, Iraq and Yemen, and eased the restrictions set before in February that limited foreign currency cash deposits to USD1, per day or USD5, per month. The Egyptian pound weakened during the month to EGP7.93 against dollar compared to EGP7.73 earlier. In the parallel market, it traded at a range of EGP compared with EGP8.42. As a result of devaluation and energy shortage, exports declined by 2% during the 9M 215 to reach USD13.9bn compared with USD17.2bn during the same period last year. The Minister of Finance, Hany Kadry Dimian, stated that Egypt will receive USD3bn loan from the World Bank in installments over 3year period. Egypt's net international reserves dropped for the third month in a row in September 215 to USD16.3bn vs. USD18.9bn in August, almost wiping out the gains from Gulf aid received this year. Egypt launched the first round of its longawaited parliamentary election since June 212 on 1819 October 215. The second round will take place in 2223 November 215. Although the turnout was low, the For the Love of Egypt party obtained the majority of votes in several governorates. The Investment Minister, Ashraf Salman, said that the economy grew by 4.1% in the financial year ended June 215 and expects a 55.2% in the current year ended June 216. Salman added that Egypt is targeting USD1bn Foreign Direct Investment (FDI) and lower unemployment from 11.2% to 1.6%. The Prime Minister, Sherif Ismail, said the government is looking to decrease the budget deficit by 1.5% per year while increasing the growth rate by 1.5% annually. The Central Agency for Public Mobilization and Statistics (CAPMAS) stated that Egypt's annual headline inflation accelerated to 9.4% in September compared to 7.9% in August. Egypt raised taxes on airplane tickets to EGP15 from EGP1 for commercial tickets and to EGP4 from EGP3 on first class tickets. The Minister of Finance said the ministry is currently undertaking procedures to widen the tax base and to rationalize energy subsidies. Companies Qalaa Holdings (CCAP.EGX) s (+14.8) announced that its subsidiary, TAQA Arabia, concluded an agreement with the Egyptian Gulf Bank (EGBE.EGX) to secure a credit facility amounting to EGP7mn. Misr Cement Qena's (MCQE.EGX) BOD approved acquiring Qalaa's whole stake in ASEC Ready Mix and ASEC Menya, subsidiaries of ASEC Holding. EFGHermes Holding (HRHO.EGX)'s (+11.5%) BOD approved decreasing the company's issued capital from EGP3.26bn to EGP3.7bn through canceling 37mn treasury shares at a par value of EGP5/share. Ezz Steel (ESRS.EGX) (+9.1%) announced that it will start operations at its new direct reduced iron" DRI" plant in Suez in the current month with a total DRI production capacity of 1.8m tpa and investment cost of EGP8mn. Heliopolis Housing (HELI.EGX) s (+7.7%) Q1 215/216 earnings dropped 44% YoY on lower land sales to EGP51mn compared to EGP91mn in the same period last year. Amer Group Holding (AMER.EGX) (+5.9) demerged into two companies namely Amer Group Holding and Porto Group Holding, and the trade on both of stocks started on 22 October 215. The company announced that it will kick off the development of four "Porto" projects by end of 215. Elsewedy Electric (SWDY.EGX) (.6%), among 43 other companies, is bidding for a solar power plant in Aswan with a capacity of 2MW. Cairo Poultry (POUL.EGX) s (1.6%) Q3 215 earnings surged by 138% YoY to EGP8mn and it plans to sell its investments in Egypt Kuwait Holding (EKHO.EGX) to secure USDdenominated cash. Juhayna Food Industries (JUFO.EGX) (6.8%) reported a 64% YoY higher net earnings in Q3 215 to reach EGP88mn. It has secured three mediumterm loans for a total of EGP48mn to enhance its working capital position and refinance existing debt. KUWAIT Given the oil sector's importance to the Kuwaiti economy, Moody's expects a sizable contraction in nominal GDP in 215 and only a slight recovery in 216. Real GDP will only grow at a projected average rate of 1.5% in 215, a recovery from a 1.6% contraction in 214. Due to the decline in oil prices, the government is facing numerous economic challenges by taking steps towards resolving structural problems in the economy. The government is adopting short and mediumterm development plans such as supporting the private sector and the SMEs through cooperation with various business institutions to provide best trade services. Kuwait's sovereign wealth fund, one of the world's largest, is to sell assets to cover a budget deficit caused by low oil prices and to finance huge infrastructure projects. Companies Al Mazaya Holding (MAZAYA.KSE) (+1.9%) through one of its subsidiaries acquired a commercial tower in the north of Al Riyadh as a step to diversify its geographical areas, business segments, and sources of income. National Bank of Kuwait (NBK.KSE) (+1.2%) posted KWD65mn in net profit, marking 9% YoY growth in Q3 215, missing consensus estimates by 9%. Jazeera Airways (JAZEERA.KSE) (+1.1%) approved reducing the capital by 52.4% to KWD2mn. The company will buy back 22mn shares from shareholders, for a total of KWD22mn at a nominal value of KWD.1/share. Kuwait Finance House (KFH) (KFIN.KSE) (1.8%) sold 59.3mn shares of its stake in Nafais Holding (NAFAIS.KSE) for 13 fils/share, with a total value of KWD7.7mn. KFH achieved a net profit worth KWD2.37mn from the sale. Kuwait Finance House (KFIN.KSE) (1.8%) posted 17% YoY increase in 9M 215 net profits to KWD15.7mn. Page 3

4 Foreign Fund Flows (FFF) October 215 Trading Review Friday, 13 November 215 Markets Monthly Overview (Cont. d) +2.4% +1.2% OMAN Oman economy is expected to slowdown in 215 compared to last year due to the impact of low oil prices. However, the government seeks to sustain growth by economic diversification initiatives. The Omani Ministry of Oil and Gas declared that they has no intention to standardize the fuel prices with the rest of Gulf States, despite the fact that at least 881 Omani workers have been laid off by in Oman in less than two months citing the slump in oil prices. The Shura Council elections started on 25 October 215. The organizing committee of the election reported a huge turnout, where 64% of voters were under the age of 45. Oman opened subscriptions for its first sovereign issue of Islamic bonds, taking a major step to develop its Islamic finance industry. Moody's has assigned a provisional rating of A1 to the proposed Omani Rials certificates, which attracted strong orders issued by Oman Sovereign Sukuk. Companies Bank Sohar (BKSB.MSM) (+8.7%) s net profits declined 2.3% YoY to OMR7.4mn, missing consensus of OMR7.8mn by 5.2%. Bank Dhofar (BKDB.MSM) (+3.8%) posted a 1% YoY growth in net earnings to reach OMR1.8mn in Q3 215, in line with consensus (2%). National Bank of Oman (NBOB.MSM) (+2.7%) net income was up 16% YoY to reach OMR43mn in Q3 215 due to a 16% rise in its net interest income and income from Islamic finance. Omantel (OTEL.MSM) (+.9%) and Drake and Scull (DSI.DFM) (7.5%), signed agreements to provide IPTV services. Bank Muscat's (BKMB.MSM) s (1.8%) Q3 215 net profits increased by 15% YoY to reach OMR46.4mn, beating consensus by 8%. The bank also received the Omani approval to open Dubai branch. Galfar Engineering (GECS.MSM) (6.5%) reported a net loss of OMR3.5mn in 9M 215 compared to net profits of OMR2.36mn in 9M 214. QATAR Qatar Central Bank (QCB) ruled out an interest rate hike in case the US Federal Reserve decided to raise the interest rates in the United States. The QCB Governor explained that the current conditions of the Qatari banking system which is characterized by high liquidity provided by QCB to local banks, exclude the issue of raising the interest rate in case it was approved in the United States. Qatar's trade surplus fell by 53% to QAR43.3bn in Q2 215 from a year ago driven by lower energy exports. The decline in total exports was mainly due to lower exports of mineral fuels, lubricants and related materials by QAR47.8bn and manufactured goods by QAR.4bn. The combined value of Qatar's imports in Q2 215 was QAR29.3bn, showing a rise of QAR2.7bn (+1.3% YoY). Companies Qatar Gas Transport "Nakilat" (QGTS.QE) (+1.7%) bond credit rating reaffirmed by Standard & Poor's (S&P) at 'AA' with a stable outlook. Ezdan Holding Group (ERES.QE) (+4.3%) obtained USD5mn 5year senior secured syndicated facility from Mashreq Bank (MASQ.DFM). Qatar Islamic Bank (QIBK.QE) (+3.4%) posted a 27% YoY increase in Q3 215 consolidated net profit recording QAR515.2mn, up from QAR44.8mn in Q Qatar Electricity & Water Co. "QEWC" (QEWS.QE) (+1.5%) net profit for Q3 215 declined by 11% YoY to record QAR44mn. Qatar Navigation Company "Milaha" (QNNS) (+1.3%) amended the foreign ownership percentage in its shares to become 49% of the company's capital. Qatar National Cement Company (QNCD.QE) (+1.%) reported a 24% YoY growth in net profit to reach QAR116.3mn in Q Gulf Warehousing Company (GWCS.QE) (+.9%) posted a 36% YoY robust growth in earnings to QAR47mn in Q Qatar National Bank Al Ahli (QNBA.EGX) (2.9%) posted 52.5% YoY higher net profits of EGP897.9mn for Q Commercial Bank of Qatar (CBQK.QE) (5.7%) announced that it has finished off squeeze out process of its operations in Turkey. Qatari Investors Group (QIGD.DSM) recorded a 7% YoY increase in net profits of QAR186mn in Q Its USD75mn 5year Sukuk offering was oversubscribed 2.3x. Page 4

5 Foreign Fund Flows (FFF) October 215 Trading Review Friday, 13 November 215 Markets Monthly Overview (Cont. d) 3.8% Abu Dhabi 4.%; Dubai 2.5% SAUDI ARABIA According to the International Monetary Fund (IMF), Saudi Arabia may run out of financial assets within the next five years if the government maintains its current policies. The IMF estimates that the Kingdom will face a budget deficit of over USD1bn this year, amounting to 21.6% of GDP, underscoring the need of measures to cut the nation s budget deficit. Saudi Arabia s government is in talks with local banks to sell SAR2bn (USD5.3bn) of local currency bonds to increase the amount of bonds issued by the government this year to a total of SAR75bn. The government is also looking for possible adjustments to its spending and revenues policies, which can be implemented through adjusting costly subsidies, boosting nonoil revenues by introducing a valueadded tax, improving the efficiency of public investment projects, and control current spending by rationalizing the state sector wage bill. The Capital Market Authority (CMA) is studying the possibility of allowing institutional investors with less than USD5bn of assets under management to own shares in the kingdom. Companies Saudi Basic Industries (21.TDWL) (+4.9%) is considering launching more than 3 joint ventures in China and the US in Q The company has also announced launching a new plant in Korea. Saudi Electricity Company (511.TDWL) (+3.5%) signed an agreement with PowerChina to build a 1.9GW power plant near Riyadh. ACWA Power International may file for an initial public offering (IPO) in 216 and may consider a secondary listing elsewhere after IPO. Arab National Bank (18.TDWL) (1.1%) raised SAR2bn from the sale of 1year Tier 2 Islamic bonds priced at 14 bps over the sixmonth Saudi interbank offered rate (SAIBOR). The Sukuk were sold in a private placement, and the bank can call the bonds after five years. Saudi Ceramic (24.TDWL) (5.3%) started trail production at its new red brick plant, with commercial operations set to begin in February 216. Eastern Province Cement (38.TDWL) (6.4%) expects its new plant to begin a trial run in Q1 216 and commercial output in the following quarter. Rabigh Refining and Petrochemical Company (238.TDWL) (9.1%) will postpone shutdown of its refining and petrochemical complex at Rabigh on the Red Sea coast. The shutdown is expected to result in a SAR9mn (USD24mn) drop in Q4 215 gross profit. Savola Group Company (25.TDWL) (9.4%) will book a SAR94mn (USD25.1mn) gains on insurance claim in Q4 215 related to its subsidiary United Sugar Company after a fire in June 213 at a raw sugar warehouse. UAE The UAE s Cabinet approved a trimmed Federal budget of AED48.5bn for next year, down 1.1% from this year. Dubai Financial Market (DFM) reported that the value of trades fell 63% YoY to AED29bn in Q The DFM announced earlier in October that it is on track to transform itself into the Smart Borse through offering new smartphone application that provides a new trading experience for investors. DP World reported gross container volumes up 3.2% YoY for 9M 215. The Central Bank of UAE reported that the lending growth in UAE slowed to 7.% in September, while the money supply (M3) declined.2% YoY in September. Meanwhile, foreign assets fell 4.7% YoY to AED267.1bn (USD72.8bn) in September. In view of the ongoing low oil prices, the Minister of Economy announced that the UAE is open to impose taxes in the coming period but any decision will be evaluated thoroughly by the government before implementation. The chairman of Abu Dhabi s Department of Economic Development said that the UAE s oil sector is expected to see a slowdown of about 23% if oil prices will not rebound from the current levels below USD5/barrel. The Dubai Mercantile Exchange (DME) was named "Asia Exchange of the Year during the 8th Energy Risk Awards Asia 215 in Singapore. DME is the premier international energy futures and commodities exchange in the Middle East, It aims to provide oil producers, traders and consumers engaged in the East of Suez markets with transparent pricing of crude oil. Companies Abu Dhabi Commercial Bank (ADCB.ADX) (2.%) reports an 18.3% increase in net profit attributable to shareholders to AED1.2bn (USD326.7mn) in Q Dubai Islamic Bank (DIB.DFM) (3.4%) has received an approval from Indonesia's Financial Services Authority (OJK) to increase its shares in Bank Panin Syariah Tbk PT (PNBS) from 24.9% to 4% stake. Dubai Investments (DIC.DFM) (4.6%) plans a 34% IPO of Emirates District Cooling in H2 216 and a further 2% one year to 18 months later. Union National Bank (UNB.ADX) (8.9%) posted a 12.4% drop in net earnings to reach AED48.59mn in Q Deyaar Development (DEYAAR.DFM) (9.3%) reported a 37.7% drop in net earnings to reach AED48.9mn in Q The First Gulf Bank (FGB.ADX) (11.5%) posted a.4% decline in net profits to AED1.42bn (USD386.62mn) in Q Dubai Financial Market (DFM.DFM) s (14.9%) net earnings declined 7% in Q3 215 to AED45.4mn (USD12.4mn). National Bank of Fujairah (NBF.ADX) recorded a 22.9% increase in net profits to reach AED453.8mn in Q Page 5

6 Foreign Fund Flows (FFF) October 215 Trading Review Friday, 13 November 215 Egypt Monthly Breakdown October 215 Breakdown by Nationality Nationality (%) USDm 1,5 1, Buy Sell Net (RHS) Foreigners were net buyers but with lower contribution to total trading at 16%, down from 2% in September 215. Nationals 75% 5 1, 1, Nationals Arabs Foreigners Foreigners 16% Arabs 9% Breakdown by Investor Type Investor Type (%) 1, 5 Buy Sell Net (RHS) Trading was almost balanced between buyers and sellers, and contribution by individuals and institutions were almost unchanged. 32% % 1, 6 Page 6

7 Foreign Fund Flows (FFF) October 215 Trading Review Friday, 13 November 215 Egypt Historical Trend Total Turnover Average Daily Turnover 3,5 3, 2,5 8% 6% 4% Total turnover and ADT rebounded by almost 31% and 3% MoM, respectively % 3% 2% 2, 1,5 2% % 6 1% % 1, 2% 4 1% 5 4% 2 2% 6% 3% Total Turnover Chg MoM (RHS) ADT Chg MoM (RHS) By Nationality By Investor Type 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % Nationals and individuals increased their contributions to total trading. 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % Foreigners Arabs Nationals Page 7

8 Foreign Fund Flows (FFF) October 215 Trading Review Friday, 13 November 215 Egypt Historical Trend (Cont. d) Net Trading by Nationality Net Trading by Investor Type 2. Egyptians Arabs Foreigners (5.) (1.) (2.) (4.) (6.) (15.) (8.) (2.) (1.) Foreigners Cumulative Net Trading Cumulative net trading for last 12 months Foreigners (5) (1) (4.6) (24.) (31.1) Nov14 Dec14 Jan15 Feb15 Mar15 Apr15 May15 Jun15 Jul15 Aug15 Sep15 Oct15 Page 8

9 Foreign Fund Flows (FFF) October 215 Trading Review Friday, 13 November 215 Kuwait Monthly Breakdown October 215 Breakdown by Nationality Nationality (%) Buy Sell Net (RHS) Foreigners are net sellers with a higher contribution of 11% vs. 9% in September 215. Nationals 84% Nationals GCC Foreigners Foreigners 11% GCC 5% Breakdown by Investor Type Investor Type (%) Company Funds Clients Accounts Buy Sell Net (RHS) Corporate investors saw their contribution increase MoM. 47% Clients Accounts 13% Company 3% Funds 1% Page 9

10 Foreign Fund Flows (FFF) October 215 Trading Review Friday, 13 November 215 Kuwait Historical Trend Total Turnover Average Daily Turnover 2,5 2, 1,5 1, 5 1% 8% 6% 4% 2% % 2% 4% Total turnover and ADT declined by 7% MoM apiece but are still above their lowest levels reached in July % 6% 4% 2% % 2% 4% 6% 6% Total Turnover Chg MoM (RHS) ADT Chg MoM (RHS) By Nationality 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % Trading by foreigners increased 1% MoM, while trading by other investor types declined. By Investor Type 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % Page 1 Nationals GCC Foreigners Company/ Establishment Investment Funds Clients Accounts

11 Foreign Fund Flows (FFF) October 215 Trading Review Friday, 13 November 215 Kuwait Historical Trend (Cont. d) Net Trading by Nationality Net Trading by Investor Type 1 8 Kuwaitis GCC Foreigners 15 Company/ Establishment Investment Funds (2) (4) (6) (5) (8) (1) (1) Foreigners Cumulative Net Trading 25 Cumulative net trading for last 12 months Foreigners (5) (1) (21) (1) (4) (29) (59) Nov14 Dec14 Jan15 Feb15 Mar15 Apr15 May15 Jun15 Jul15 Aug15 Sep15 Oct15 Page 11

12 Foreign Fund Flows (FFF) October 215 Trading Review Friday, 13 November 215 Oman Monthly Breakdown October 215 Breakdown by Nationality Nationality (%) Buy Sell Net (RHS) Foreign investors increased their trading contribution on account of lower contribution by nationals. Arabs 1% Nationals 37% GCC 6% Foreigners 56% 5 Nationals GCC Arabs Foreigners 1 Breakdown by Investor Type Investor Type (%) Buy Sell Net (RHS) are still net sellers but with a lower contribution to total trading vs. 31% in September % % 6 3 Page 12

13 Foreign Fund Flows (FFF) October 215 Trading Review Friday, 13 November 215 Oman Historical Trend Total Turnover Average Daily Turnover % 15% 1% 5% % 5% Total turnover reached its highest level, and ADT jumped to reach USD26mn % 2% 15% 1% 5% % 1% 5% Total Turnover Chg MoM (RHS) ADT Chg MoM (RHS) By Nationality By Investor Type 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % Trading by foreigners reached the highest level over the last 12 months. 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % Nationals GCC Arabs Foreigners Individual Page 13

14 Foreign Fund Flows (FFF) October 215 Trading Review Friday, 13 November 215 Oman Historical Trend (Cont. d) Net Trading by Nationality Net Trading by Investor Type 1. Omanis Aarbs GCC Foreigners 8. Individual (5.) (2.) (1.) (4.) (6.) (15.) (8.) Foreigners Cumulative Net Trading Cumulative net trading for last 12 months Foreigners (5) (25.4) (46.4) (18.7) (2.5) (29.5) (26.4) (24.6) (28.3) (9.5) (47.5) (1) (15) (2) (25) (3) Nov14 Dec14 Jan15 Feb15 Mar15 Apr15 May15 Jun15 Jul15 Aug15 Sep15 Oct15 Page 14

15 Foreign Fund Flows (FFF) October 215 Trading Review Friday, 13 November 215 Qatar Monthly Breakdown October 215 Breakdown by Nationality Nationality (%) 1, Buy Sell Net (RHS) Foreigners are still net buyers but with less contribution to total trading. Nationals increased their trading contribution from 52% in September 215. Nationals 59% GCC 8% Foreigners 33% 1, Nationals GCC Foreigners 15 Breakdown by Investor Type Investor Type (%) 1, 5 Buy Sell Net (RHS) contribution decreased to 42% vs. 53% in September % % 1, 4 Page 15

16 Foreign Fund Flows (FFF) October 215 Trading Review Friday, 13 November 215 Qatar Historical Trend Total Turnover Average Daily Turnover 6, 5, 12% 1% 8% ADT decreased by 17% MoM reaching USD79mn % 8% 6% 4, 3, 2, 1, 6% 4% 2% % 2% 4% % 2% % 2% 4% 6% 6% Total Turnover Chg MoM (RHS) ADT Chg MoM (RHS) By Nationality By Investor Type 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % Trading contribution by GCC investors and institutions decreased compared to September % 9% 8% 7% 6% 5% 4% 3% 2% 1% % Nationals Foreigners GCC Note: Qatar started to disclose GCC trading figures in April 215. Page 16

17 Foreign Fund Flows (FFF) October 215 Trading Review Friday, 13 November 215 Qatar Historical Trend (Cont. d) Net Trading by Nationality Net Trading by Investor Type 8. Qatari Foreigners GCC (2.) (5.) (4.) (1.) (6.) (15.) Foreigners Cumulative Net Trading (1) (2) Cumulative net trading for last 12 months Foreigners (55.2) (69.5) (116.9) (73.3) Nov14 Dec14 Jan15 Feb15 Mar15 Apr15 May15 Jun15 Jul15 Aug15 Sep15 Oct15 Page 17

18 Foreign Fund Flows (FFF) October 215 Trading Review Friday, 13 November 215 Qatar Top Stocks Inflows/Outflows October 215 Nationals Foreigners GCC Inflows Top 5 Stocks () Inflows Top 5 Stocks () Inflows Top 5 Stocks () Industries Qatar 3.4 Qatar Gas Transport 1.1 Ooredoo 1.6 Qatar National Bank 1.6 Vodafone Qatar.6 Qatar Navigation 1.1 Gulf International.6 Aamal.1 Qatar National Bank.7 Qatari German for Medical Devices.5 Almeera Consumer Goods.1 Qatar Islamic Bank.7 Rayan.5 Barwa.1 Comm. Bank of Qatar.4 Outflows Top 5 Stocks () Outflows Top 5 Stocks () Outflows Top 5 Stocks () Ooredoo 1.1 Industries Qatar 3.2 Vodafone Qatar.6 Qatar Navigation 1. Qatar National Bank 2.4 Qatar Gas Transport.5 Qatar Gas Transport.6 Comm. Bank of Qatar.7 MediCare Group.2 Qatar Islamic Bank.3 Rayan.7 Industries Qatar.2 Ezdan Holding Group.1 Ooredoo.5 Barwa.2 Page 18

19 Foreign Fund Flows (FFF) October 215 Trading Review Friday, 13 November 215 Saudi Arabia Monthly Breakdown October 215 Breakdown by Nationality Nationality (%) , , Buy Sell Net (RHS) 3, 1, , 1, 1, 2, Foreigners are net sellers with very low contribution to total trading, while nationals continue to dominate trading. Nationals 94% 5 Nationals GCC Foreigners 3, Foreigners 4% GCC 2% Breakdown by Investor Type Investor Type (%) 25, 15, 5, 5, 15, 25, Page 19 4, ,474 2, Foreigners (SWAP) Buy Sell Net (RHS) 22,257 24,21 1,953 3, 2, 1, 1, 2, 3, are net buyers, while individuals still dominate the trading volume. 85% 13% Note: Tadawul has changed the periodicity it uses when reporting breakdown, so our monthly numbers are based on average daily figures for weeks overlapping two consecutive months. Foreigners (SWAP) 2%

20 Foreign Fund Flows (FFF) October 215 Trading Review Friday, 13 November 215 Saudi Arabia Historical Trend Total Turnover Average Daily Turnover 7, 6, 5, 4, 3, 2, 1, 12% 1% 8% 6% 4% 2% % 2% 4% 6% ADT increased to USD1,31mn, while total turnover doubled. 3, 2,5 2, 1,5 1, 5 3% 2% 1% % 1% 2% 3% 8% 4% Total Turnover Chg MoM (RHS) ADT Chg MoM (RHS) By Nationality 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % Nationals and individuals still dominate the trading volume. By Investor Type 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % Nationals GCC Foreigners Foreigners (SWAP) Note: Tadawul has changed the periodicity it uses when reporting breakdown, so our monthly numbers are based on average daily figures for weeks overlapping two consecutive months. Page 2

21 Foreign Fund Flows (FFF) October 215 Trading Review Friday, 13 November 215 Saudi Arabia Historical Trend (Cont. d) Net Trading by Nationality Net Trading by Investor Type USDbn.8 Nationals GCC Foreigners USDbn 3. Foreigners (SWAP) (.2) (1.) (.4) (.6) (2.) (.8) (3.) Foreigners Cumulative Net Trading.8 USDbn Cumulative net trading for last 12 months Foreigners (.1) (.2) (.3) (.) (.2) (.) (.3) (.1) (.1) (.3).6.8 Nov14 Dec14 Jan15 Feb15 Mar15 Apr15 May15 Jun15 Jul15 Aug15 Sep15 Oct15 Note: Tadawul has changed the periodicity it uses when reporting breakdown, so our monthly numbers are based on average daily figures for weeks overlapping two consecutive months. Page 21

22 Foreign Fund Flows (FFF) October 215 Trading Review Friday, 13 November 215 UAE (Abu Dhabi) Monthly Breakdown October 215 Breakdown by Nationality Nationality (%) 1, 5 5 Buy Sell Net (RHS) Foreigners are still net buyers with a higher contribution to total trading. Nationals 58% Arabs 8% GCC 5% Foreigners 29% 1, Nationals Arabs GCC Foreigners 25 Breakdown by Investor Type Investor Type (%) Buy Sell Net (RHS) Company contribution decreased to 47% vs. 59% in September % Company 53% Page 22

23 Foreign Fund Flows (FFF) October 215 Trading Review Friday, 13 November 215 UAE (Abu Dhabi) Historical Trend Total Turnover Average Daily Turnover 2,5 2, 1,5 1, 5 8% 6% 4% 2% % 2% 4% Both ADT and total turnover decreased by 2% MoM % 6% 4% 2% % 2% 4% 6% 6% Total Turnover Chg MoM (RHS) ADT Chg MoM (RHS) By Nationality By Investor Type 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % Contribution by nationals and individuals decreased, while that of foreigners and corporate investors increased. 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % Arabs GCC Foreigners Nationals Company Page 23

24 Foreign Fund Flows (FFF) October 215 Trading Review Friday, 13 November 215 UAE (Abu Dhabi) Historical Trend (Cont. d) Net Trading by Nationality Net Trading by Investor Type 25 UAE Arab GCC Foreigners 4 Company Individual (5) 1 (1) (1) (2) (15) (3) (2) (4) Foreigners Cumulative Net Trading 1, Cumulative net trading for last 12 months Foreigners (2) (91) (6) Nov14 Dec14 Jan15 Feb15 Mar15 Apr15 May15 Jun15 Jul15 Aug15 Sep15 Oct15 Page 24

25 Foreign Fund Flows (FFF) October 215 Trading Review Friday, 13 November 215 UAE (Abu Dhabi) Top Stocks Inflows/Outflows October 215 Arab GCC Foreigners Nationals Inflows Top 5 Stocks () Inflows Top 5 Stocks () Inflows Top 5 Stocks () Inflows Top 5 Stocks () First Gulf Bank 1. Aghtia Group 2.58 Etisalat First Gulf Bank 6.4 Eshraq.3 RAK Ceramic.32 ALDAR Properties 1.47 National Bank of AD 1.37 Aghtia Group.1 Etisalat.2 AD. Commercial Bank.16 AD. Commercial Bank 1.9 Union National Bank.1 ALDAR Properties.18 Eshraq.12 Dana Gas.74 Green Crescent Insurance.1 Dana Gas.16 National Bank of RAK.9 Methaq Takaful.13 Outflows Top 5 Stocks () Outflows Top 5 Stocks () Outflows Top 5 Stocks () Outflows Top 5 Stocks () Dana Gas.9 First Gulf Bank.12 First Gulf Bank 5.68 Etisalat 18.6 ALDAR Properties.6 National Bank of AD.7 Aghtia Group 2.45 ALDAR Properties 1.6 Methaq Takaful.1 AD. Commercial Bank.4 Waha Capital.11 Eshraq.51 National Bank of AD.2 National Bank of RAK.2 RAK Ceramic.7 Aghtia Group.25 Gulf Cement.2 Gulf Pharmaceutical Co..1 National Bank of AD.3 RAK Ceramic.25 Page 25

26 Foreign Fund Flows (FFF) October 215 Trading Review Friday, 13 November 215 UAE (Dubai) Monthly Breakdown October 215 Breakdown by Nationality Nationality (%) 1, Buy Sell Net (RHS) Foreigners were net buyers for the second month in a row with the same contribution to total trading. Nationals 46% Arabs 18% GCC 11% Foreigners 25% 1, Nationals Arabs GCC Foreigners 6 Breakdown by Investor Type Investor Type (%) 1,5 1, 5 5 1, Buy Sell Net (RHS) are still net buyers with a higher contribution of 39% vs. 32% in September % 39% 1,5 15 Page 26

27 Foreign Fund Flows (FFF) October 215 Trading Review Friday, 13 November 215 UAE (Dubai) Historical Trend Total Turnover Average Daily Turnover 9, 8, 7, 6, 5, 4, 2% 15% 1% 5% ADT and total turnover declined to a 12month low in October % 15% 1% 5% 3, 2, 1, % 5% 1 5 % 5% 1% 1% Total Turnover Chg MoM (RHS) ADT Chg MoM (RHS) By Nationality 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % Trading contribution by nationals has been declining since April 215. By Investor Type 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % Arabs GCC Foreigners Nationals Page 27

28 Foreign Fund Flows (FFF) October 215 Trading Review Friday, 13 November 215 UAE (Dubai) Historical Trend (Cont. d) Net Trading by Nationality Net Trading by Investor Type 3. UAE Arab GCC Foreigners 25. Individual (5.) (5.) (1.) (1.) (15.) (15.) (2.) (2.) (25.) Foreigners Cumulative Net Trading (1) (2) Cumulative net trading for last 12 months Foreigners (1.6) (2.5) (23.8) (45.2) (143.1) Nov14 Dec14 Jan15 Feb15 Mar15 Apr15 May15 Jun15 Jul15 Aug15 Sep15 Oct15 Page 28

29 Foreign Fund Flows (FFF) October 215 Trading Review Friday, 13 November 215 UAE (Dubai) Top Stocks Inflows/Outflows October 215 Arab GCC Foreigners Nationals Inflows Top 5 Stocks () Inflows Top 5 Stocks () Inflows Top 5 Stocks () Inflows Top 5 Stocks () Mazaya 8.8 Dubai Financial Market 1. Emaar Malls 2.2 Damac 13.4 Dubai Islamic Bank 2.1 Dubai Investment.5 National Industries Group 1.9 Emaar 2.1 AirArabia 1.2 AirArabia.5 Emaar.9 Emirates NBD 1.5 Gulf Navigation.6 Arabtec.3 Dubai Financial Market.5 Emaar Malls 1.2 Al Madina.56 Hits Telecom.14 Arabtec.45 Tabreed.38 Outflows Top 5 Stocks () Outflows Top 5 Stocks () Outflows Top 5 Stocks () Outflows Top 5 Stocks () Damac 11.8 Mazaya 9.5 AirArabia 1.5 National Industries Group 1.96 Emaar Malls 3.4 Damac 1.6 Dubai Islamic Bank.6 Dubai Islamic Bank.62 Emaar 2.9 Dubai Islamic Bank.9 Hits Telecom.4 Arabtec.25 Dubai Financial Market 1.5 Gulf Navigation.6 Ekttitab.2 Shuaa Capital.16 Emirates NBD 1.4 Union Properties.4 Al Madina.2 AirArabia.16 Page 29

30 Disclosure Appendix Important Disclosures METHODOLOGY: We strive to search for the best businesses that trade at the lowest valuation levels as measured by an issuer s intrinsic value on a pershare basis. In doing so, we follow both topdown and bottomup approaches. Under the topdown approach, we attempt to study the most important quantitative and qualitative factors that we believe can affect a security's value, including macroeconomic, sectorspecific, and companyspecific factors. Under the bottomup approach, we focus on the analysis of individual stocks by running our proprietary scoring model, including valuation, financial performance, sentiment, trading, risk, and value creation. COUNTRY MACRO RATINGS: We analyze the four main sectors of a country s macroeconomics, then we assign,, and star for low risk, moderate risk, and high risk, respectively. We use different weights for each economic sector: (a) Real Sector (35% weight), (b) Monetary Sector (15% weight), (c) Fiscal Sector (25% weight), and (d) External Sector (25% weight). STOCK MARKET RATINGS: We compare our yearend price targets for the subject market index on a totalreturn basis versus our calculated required rate of return (RRR). Taking into account our Country Macro Rating, we set the Neutral borderline (below which is Underweight ) as 2% of RRR for Country Macro Rating, 4% of RRR for Country Macro Rating, and 6% of RRR for Country Macro Rating. That said, our index price targets are based on the average of two models. Model (1): Estimated index levels based on consensus price targets of all index constituents. Stocks with no price targets are valued at market price. Model (2): Estimated index levels based on our expected repricing (whether rerating, derating, or unchanged rating) of the forward priceearnings ratio (PER) of each index in addition to consensus earnings growth for the forward year. SECTOR RATINGS: On the sectors level, we focus on six major sectors, namely (1) Consumer and Health Care, (2) Financials, (3) Industrials, Energy, & Utilities, (4) Materials, (5) Real Estate, and (6) Telecom Services & IT. To assess each sector, we use the SWOT analysis to list the strengths, weaknesses, opportunities, and threats in each country. We then translate our qualitative SWOT analysis into a quantitative model to evaluate all six sectors across countries. Each of the measures we used, although mostly subjective, is assigned a score as either +1 (high impact), (medium impact), or 1 (low impact). At a later stage, when assigning the final rating Overweight, Neutral, or Underweight for each sector in each country, we realize that sometimes it is unfair to assign equal weights for the subsectors in each major sector assessed. Hence, some of the subsectors are given different weights for their significant profile in each country. Additionally, the final rating for each sector in each specific country is assigned based on a relative calculation comparing this sector to all other sectors in this country. SECURITY INVESTMENT RATINGS: We combine intrinsic value, relative valuation, and market sentiment into a single rating. Our threepronged methodology involves (1) discounted cash flows DCF valuation model(s), (2) relative valuation metrics, and (3) overall sentiment. Whenever possible we attempt to apply all three aspects on the issuers or securities under review. In certain cases where we do not have our own financial and valuation models, we attempt to scan the market for other analysts value estimates and ratings (i.e. consensus view) on average. We compliment this with relative valuation and sentiment drivers, such as positive/neutral/negative news flows. For all issuers/securities covered, we have three investment ratings (Buy, Hold, or Sell), comparing the security s expected total return (including both price performance and expected cash dividend) over a 12month period versus its Required Rate of Return RRR as calculated using the Capital Asset Pricing Model CAPM and adjusted for the Risk Rating we attach to each security. Our price targets are subjective and are estimates of the analysts where the securities covered will trade within the next 12 months. Price targets can be derived from earningsbased valuation models (e.g. Discounted Cash Flow DCF ), assetbased valuation models (e.g. Net Asset Value NAV ), relative valuation multiples (e.g. PER, PBV, EV/EBITDA, etc.), or a combination of them. In case we do not have our own valuation model, we use a weighted average of market consensus price targets and ratings. We review the investment ratings periodically or as the situation necessitates. SECURITY RISK RATINGS: We assess the risk profile of each issuer/security covered and assign one of three risk ratings (High, Moderate, or Low). The risk rating is weighted to reflect different aspects specific to (1) the sector, (2) the issuer, (3) the security under review, and (4) volatility versus the market (as measure by beta) and versus the security s average annualized standard deviation. We review the risk ratings at least annually or as the situation necessitates. Other Disclosures MFS does not have any proprietary holding in any securities. Only as a nominee, MFS holds shares on behalf of its clients through Omnibus accounts. MFS is not currently a market maker for any listed securities. Investment Rating If Total Return is Buy (B) Hold (H) Sell (S) Not Rated (NR) Not Covered (NC) Low (1) Moderate (2) High (3) Higher than RRR Higher than RRR Higher than RRR Between RRR and 2% of RRR Lower than 2% of RRR Risk Rating Between RRR and 4% of RRR Lower than 4% of RRR Between RRR and 6% of RRR Lower than 6% of RRR We have decided not to publish a rating on the stock due to certain circumstances related to the company (i.e. special situations). We do not currently cover this stock or we are restricted from coverage for regulatory reasons.

31 Analyst Certification I (we), Mohamed Hamdy, Manager Equity Analysis; Phebe Sobhy, Equity Analyst; and Mahmoud Mostafa, Equity Analyst, employed with Mubasher International, a company under the National Technology Group of Saudi Arabia being a shareholder of Mubasher Financial Services BSC (c) and author(s) to this report, hereby certify that all the views expressed in this research report accurately reflect my (our) views about the subject issuer(s) or security(ies). I (we) also certify that no part of my (our) compensation was, is or will be directly or indirectly related to the specific recommendation(s) or view(s) expressed in this report. Head of Research Certification I, Amr Hussein Elalfy, Global Head of Research of Mubasher Financial Services BSC (c) confirm that I have vetted the information, and all the views expressed by the Analyst in this research report about the subject issuer(s) or security(ies). I also certify that the author of this report, has not received any compensation directly related to the contents of the Report. Disclaimer This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. Mubasher Financial Services BSC (c) ( MFS ) has based this document on information obtained from sources it believes to be reliable but which it has not independently verified; MFS makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. The opinions contained within the document are based upon publicly available information at the time of publication and are subject to change without notice. This document is not intended for all recipients and may not be suitable for all investors. Securities described in this document are not available for sale in all jurisdictions or to certain category of investors. The document is not substitution for independent judgment by any recipient who should evaluate investment risks. Additionally, investors must regard this document as providing standalone analysis and should not expect continuing analysis or additional documents relating to the issuers and/or securities mentioned herein. Past performance is not necessarily a guide to future performance. Forwardlooking statements are not predictions and may be subject to change without notice. The value of any investment or income may go down as well as up and you may not get back the full amount invested. Where an investment is denominated in a currency other than the local currency of the recipient of the research report, changes in the exchange rates may have an adverse effect on the value, price or income of that investment. In case of investments for which there is no recognized market, it may be difficult for investors to sell their investments or to obtain reliable information about its value or the extent of the risk to which it is exposed. References to ratings/recommendations are for informational purposes only and do not imply that MFS adopts, supports or confirms in any way the ratings/recommendations, opinions or conclusions of the analysts. This document is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country, or other jurisdiction where such distribution, publication, availability or use would be contrary to law, regulation or which would subject MFS or its affiliates to any registration or licensing requirements within such jurisdiction. MFS accepts no liability for any direct, indirect, or consequential damages or losses incurred by third parties including its clients from any use of this document or its contents. Copyright Copyright 215, Mubasher Financial Services BSC (MFS), ALL RIGHTS RESERVED. No part or excerpt of this document may be redistributed, reproduced, stored in a retrieval system, or transmitted, on any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of MFS. MubasherTrade is a trademark of Mubasher Financial Services BSC. Mubasher Financial Services BSC (c) is an Investment Business Firm Category 1, licensed and regulated by the Central Bank of Bahrain. Issuer of Report Mubasher Financial Services BSC (c) is an Investment Business Firm Category 1, licensed and regulated by the Central Bank of Bahrain. Website: Research@MubasherTrade.com

32 Sales & Research Contact Details INSTITUTIONAL SALES RETAIL SALES RESEARCH MENA Bahrain Libya Research Team (UAE) Call Center: (Kuwait) (Jordan) Egypt UAE Egypt Egy@Mubasher.net Egypt@MubasherTrade.com UAE@MubasherTrade.com Call Center: / Call Center: