Weekly Investment Report

Transcription

1 Economic & Market News Bloomberg: The 19-nation euro-zone bloc is enjoying the strongest growth in a decade and economists at Credit Suisse and Oxford Economics are declaring that it s heading toward a golden period of low-inflationary expansion. The turnaround is striking for a region that plunged from the global financial crisis into its own sovereign debt turmoil, record unemployment and near-deflation that threatened the very survival of the currency union. The European Commission raised its 217 growth forecast to 2.2% from a 1.7% estimate in May. In a report, the IMF said growth across the European region, which includes the euro area as well as developing economies in central and eastern Europe is having a positive spill-over effect on the rest of the world. It also said those brighter prospects accounted for the bulk of the upward revision to its global outlook in October. For the euro area, economists surveyed by Bloomberg have raised their growth forecasts eight times this year. The bright prospects for the euro region paint a stark contrast to the outlook for the U.K., where the uncertainty surrounding the imminent divorce from the European Union is crimping investment and weakening the pound. The spread between 1-year and two-year government bonds has shrunk to about 8 bps this year in Britain, while it has swelled to more than 11 bps in Germany, indicating a greater level of confidence in the biggest European economy. Zawya: For GCC ccorporate and infrastructure capital market issuance, 217 is shaping up to be a bumper year, according to S&P Global Ratings. Volumes are already more than double those of last year-with almost two months still to go. As central banks hike interest rates along with the US Fed and with significant political uncertainty hanging over the region, issuers are keen to lock in long-term funding at still attractive rates. Single-exposure limits on banks are also forcing some GCC (including Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and UAE) issuers to diversify funding sources. S&P also sees an emerging trend in budget-constrained governments increasingly looking to their GRE to tap capital markets for corporate and project bonds to complement record sovereign debt issuance. Two recent examples are Abu Dhabi Crude Oil Pipeline LLC (Adcop) issuing USD 3 billion of project bonds and Nogaholding issuing USD 1 billion of bonds. Higher oil prices in recent weeks, boosted by rising global demand and expectations that OPEC and other producing countries will extend a deal to cut production, offers a glimmer of hope for GCC corporates that have endured tough operating conditions for the past three years: Real GDP growth has been about half of the rate prior to the oil price decline. Al Masah Capital: Investors adopting a cautious approach continued to weigh down global and regional markets for the past week. Regional markets trended downwards this past week with four out of the eight indices in the red zone. Egypt came out as the worst performer with a -3.5% decline over the week, followed by Abu Dhabi, Qatar and Saudi with -1.1%, -.8% and -.6% slides, respectively. Oman, Kuwait, Dubai and Bahrain were modestly up over the same period with +1.%, +.8%, +.3% and +.2% gains, respectively. Crude oil remained above the USD6 per barrel mark, however, it was down on a weekly basis by -1.3%, ending the week at USD62.72 per barrel. Regional markets are witnessing an increase in IPO activity, with Emaar Development IPO being well oversubscribed with strong demand from both international and regional accounts, stimulating investors investment appetite and consequently this will reflect positively on future IPO s in the pipeline such as ADNOC as well as elevate investor sentiment regarding overall market activity. Indexes Last WTD (%) MTD (%) YTD (%) Dubai (DFMGI) 3, % -4.83% -2.% Abu Dhabi (ADSMI) 4, % -3.39% -4.81% Saudi (SASEIDX) 6, % -.3% -4.12% Kuwait (KWSE) 6, % -3.14% 9.76% Egypt (EGX3) 13, % -3.45% 12.17% Qatar (DSM) 7, % -4.16% -25.2% Bahrain (BHSEIDX) 1, % -.53% 4.5% Oman (MSM3) 5, % 1.9% % TR GCC (Reuters) % -4.9% -8.45% DJ MENA %.% 5.77% Commodities & FX Last WTD (%) MTD (%) YTD (%) Oil (Brent) % 2.2% 68.24% Natural Gas % 6.94% 32.52% Gold % 1.82% 22.% Silver % 3.69% 25.13% EURUSD % 1.28% 8.59% GBPUSD % -.53% -1.36% USDJPY % -1.36% -6.84% USDCHF % -.91% -1.34% AUDUSD % -1.18% 3.99% USDCAD % -.95% -7.79% Indexes Last WTD (%) MTD (%) YTD (%) DJI 23, % -.8% 18.19% S&P 5 2, %.14% 15.19% NASDAQ 6, % 1.6% 29.83% STOXX Europe % -2.89% 6.19% FTSE 1 7, % -1.5% 3.33% DAX 12, % -1.78% 13.18% LIBOR US Dollar WoW (%) Euro WoW (%) 1 Month % % 2 Month % % 3 Month % % 6 Month % % 12 Month % % CAC 4 5, % -3.35% 9.4% Nikkei , % 1.75% 17.17% SENSEX 33, %.39% 25.22% Shanghai Composite 3, % -.31% 9.% Hang Seng 29, % 3.38% 32.72% 1

2 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Weekly Investment Report Economic & Market News (continued) Zawya: Overall real GDP growth in Kuwait is expected to pick up over the medium term, according to the preliminary findings released by the IMF. Driven by accelerated project implementation under the five-year development plan and improved confidence, non-oil growth is projected to increase gradually to about 4%, according to IMF. Hydrocarbon output is forecast to increase by 4.5% in 218, as the OPEC+ deal expires (mission's baseline assumption) and to expand gradually afterwards in line with investment plans in the sector. Inflation is expected to rise to 2.5% next year and to peak at 3.75% in 219, due to the introduction of the new taxes, before stabilizing below 3%. The gradual pickup in oil production and prices will keep the current account broadly balanced over the forecast period. The overall fiscal balance is projected to remain nearly balanced. Notwithstanding the recent rise in oil prices, the mission's baseline scenario assumes oil prices at around USD 49 per barrel in , increasing to about USD 52 per barrel over the medium-term. Gross financing needs will, however, remain large. After transfers to the FGF and excluding investment income, a fiscal deficit of about 15% of GDP annually will generate cumulative financing needs of some USD 1 billion over five years. Reuters: China s economy cooled further last month, with industrial output, fixed asset investment and retail sales missing expectations as the government extended a crackdown on debt risks and factory pollution. Beijing is already in the second year of a campaign to reduce high levels of debt as authorities worry that riskier lending practices, especially in the real estate sector, could imperil the economy. Data pointed to moderating growth over the next few quarters as credit expansion slows, with year-on-year industrial output gain of 6.2% in October missing analysts estimates of a 6.3% rise, and below a 6.6% increase in September. Fixed-asset investment growth slowed to 7.3% in the January-October period, according to National Bureau of Statistics (NBS) compared to analysts expectation of 7.4%. China s economy has surprised financial markets with robust growth of nearly 6.9% in the first nine months of this year, underpinned by a recovery in its manufacturing and industrial sectors thanks to a government-led infrastructure spending spree, a resilient property market and unexpected strength in exports. China s exports and import growth both eased in October, while the smog war dragged on manufacturing activity last month. Zawya: Egypt's central bank kept interest rates unchanged as expected, concluding that further declines in inflation were needed to warrant a shift towards a looser policy. The bank, which has raised interest rates by 7 bps since the flotation of Egypt's pound currency last November, held the overnight deposit rate at 18.75% and the overnight lending rate at 19.75%. Egyptian inflation dipped for the third month running in October but remained above 3%. The bank said the baseline inflation outlook remained consistent with achieving its inflation targets of 13% in the fourth quarter of next year and single digits thereafter. Nine of 1 economists polled by Reuters had predicted the MPC would hold rates for the third month in a row. They saw rates being cut in coming months as inflation continued to ease. The Egyptian pound has lost half of its value since it was floated as part of a USD 12 billion IMF programme aimed at reviving the economy. Authorities hope the IMF deal will help revive an economy that has been struggling since a 211 uprising drove tourists and investors away. 4 US Government Bonds - Yield to Maturity (%) M 3M 6M 12M 2Y 5Y 1Y 3Y Last Week Current Week Global Equity Indexes - Rebased 5 CBOE S&P Volatility Index - VIX Oct-14 Dec-14 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 S&P 5 STOXX Europe 6 TR MENA MSCI Asia ex. Japan MENA Market - Price Ratios PE PB Dubai Abu Dhabi Saudi Kuwait Egypt Qatar Bahrain Oman Average Year CDS Rates (basis points) Dubai Abu Dhabi Saudi Kuwait Egypt Qatar Bahrain Oman Average 2

3 Government Bonds Government Bond Name Currency Maturity Coupon Current Yield (%) YTM - Ask (%) Rating Bid Ask UAE - Emirate of Abu Dhabi ABU DHABI GOVT INT'L USD 8/4/ Aa United States of America US TREASURY N/B USD 31/5/ AAA United Kingdom of Great Britain UK TSY 4 3/4% 22 GBP 7/3/ AA Kingdom of Bahrain KINGDOM OF BAHRAIN USD 31/3/ UAE - Emirate of Dubai DUBAI GOVT INT'L BONDS USD 5/1/ United States of America US TREASURY N/B USD 15/5/ AAA State of Qatar STATE OF QATAR USD 15/6/ Aa Arab Republic of Egypt ARAB REPUBLIC OF EGYPT USD 3/4/ B United States of America US TREASURY N/B USD 15/5/ AAA Kingdom of Bahrain KINGDOM OF BAHRAIN USD 19/9/ BB Corporate Bonds Government/Parent Company Bond Name Currency Maturity Coupon Current Yield (%) YTM - Ask (%) Rating Bid Ask Abu Dhabi Water & Electricity TAQA ABU DHABI NATL ENER USD 1/8/ BBB Abu Dhabi Water & Electricity TAQA ABU DHABI NATL ENER USD 16/9/ BBB Qatar Petroleum RAS LAFFAN LNG 3 USD 3/9/ A National Bank of Oman NATIONAL BANK OF OMAN USD 7/1/ Baa Qatari Diar Real Estate Invest QATARI DIAR FINANCE QSC USD 21/7/ Aa Stichting Waha Aerospace WAHA AEROSPACE BV USD 28/7/ AA Qatar Petroleum RAS LAFFAN LNG II USD 3/9/ A Investment Corp of Dubai EMIRATES NBD PJSC EUR 23/3/ A Saudi Electricity Co SAUDI ELECTRICITY GLOBAL USD 3/4/ A Emaar Malls Group PJSC EMG SUKUK LTD USD 18/6/ Baa Emirate of Sharjah United Arab SHARJAH SUKUK LTD USD 17/9/ BBB Qatar Petroleum RAS LAFFAN LNG 3 USD 3/9/ A Qatar Gas Transport Co Ltd NAKILAT INC USD 31/12/ A Port & Free Zone World FZE DP WORLD LTD USD 2/7/ BBB Burgan Bank SAK BURGAN TIER 1 FINANCING USD Perpetual Emirates NBD PJSC EMIRATES NBD 214 TIER 1 USD Perpetual Thomson Reuters composite rating; NR = No Rating 3

4 Bahrain Qatar Egypt Kuwait Saudi UAE Weekly Investment Report Money Markets EIBOR 1 Week 1 Month 2 Months 3 Months 6 Months 12 Months N/A T/N 1 Week 1 Month 2 Months 3 Months 6 Months 9 Months 12 Months Year 2 Years 3 Years 4 Years 5 Years 7 Years 1 Years SAIBOR KIBOR 1 Month 2 Months 3 Months 6 Months 9 Months 12 Months T/N 1 Week 1 Month 2 Months 3 Months 6 Months 9 Months 12 Months Year 2 Years 3 Years 4 Years 5 Years 7 Years 1 Years O/N 1 Month 3 Months 6 Months 1 Year 2 Years 3 Years EGIBR Bank Rates T-Bill Yields QIBOR QCB Interest Rates BHIBOR Interest Rates O/N T/N 1 Week 1 Month 2 Months 3 Months 6 Months 9 Months 12 Months Year 2 Years 3 Years 4 Years 5 Years 7 Years 1 Years O/N < 1 Week 1 Week < 1 Month 1 Month > 1 Month Re Discount Lending Benchmark Week 1 Month 3 Months 6 Months 9 Months 1 Year 2 Years 3 Years O/N 1 Week 1 Month 2 Months 3 Months 6 Months 9 Months 12 Months Week 1 Month 2 Months 3 Months 6 Months 9 Months 12 Months O/N Deposit O/N Lending Repo Rate O/N 1 Week 1 Month 2 Months 3 Months 6 Months 9 Months 12 Months O/N Deposit 1W Deposit O/N Repo O/N Secured Year 2 Years 3 Years 4 Years 5 Years 7 Years 1 Years

5 Qatar Egypt Kuwait Saudi Abu Dhabi Dubai Weekly Investment Report Top Weekly Performers by Country ( indicates native currency; Data as of the previous Thursday) SHUAA CAPITAL PSC % % 1,235 ISLAMIC ARAB INSURANCE CO PSC % 3.84% 655 AMANAT HOLDINGS PJSC % 28.44% 3,15 AL SALAM BANK SUDAN PLC % 49.19% 224 DUBAI INVESTMENTS PJSC % 1.29% 1,63 DUBAI INSURANCE CO PSC % 15.52% 335 ARABTEC HOLDING PJSC % % 3,81 NATIONAL CENTRAL COOLING CO PJSC % -7.96% 5,24 ARAB INSURANCE GROUP BSC % 25.6% 345 EMAAR MALLS PJSC % % 27,981 NATIONAL TAKAFUL CO PJSC % -32.1% 83 ABU DHABI NATIONAL TAKAFUL CO % 17.65% 5 ABU DHABI SHIP BUILDING PJSC % % 494 FOODCO HOLDING PJSC % 2.17% 47 ARKAN BUILDING MATERIALS CO PJSC % -2.48% 1,155 ABU DHABI NATIONAL INSURANCE CO % 39.53% 1,35 GULF PHARMACEUTICAL INDUSTRIES % 6.8% 2,531 ABU DHABI NATIONAL FOR BUILDING % % 126 GULF CEMENT CO PSC % -4.% 788 UNION NATIONAL BANK PJSC % % 11,35 (SAR mln) (SAR mln) MIDDLE EAST SPECIALIZED CABLES CO % 1.83% 51 SAUDI INDUSTRIAL EXPORT CO SJSC % -61.3% 148 SAUDI VITRIFIED CLAY PIPE CO SJSC % -34.8% 79 AL KATHIRI HOLDING CO %.% 48 ANAAM INTERNATIONAL HOLDING % % 256 AL GASSIM INVESTMENT HOLDING CO % % 357 KINGDOM HOLDING CO % -3.96% 3,575 DAR AL ARKAN REAL ESTATE DEVELOP % 19.2% 7,95 MALATH COOPERATIVE INSURANCE % -8.52% 621 MAKKAH CONSTRUCTION AND DEVEL % % 9,378 (fils) (KWD mln) (fils) (KWD mln) KUWAIT CABLE VISION COMPANY % % 1 KUWAIT FOOD COMPANY KSCP 1, % % 682 KUWAIT COMPANY FOR PROCESS % -7.56% 16 AL MAL INVESTMENT COMPANY KPSC % % 9 INDEPENDENT PETROLEUM GROUP % 13.81% 76 AMAR FINANCE AND LEASING CO % % 6 AJWAN GULF REAL ESTATE CO KSCP % -3.92% 3 AWJ HOLDING COMPANY KSCP % -2.77% 11 REAL ESTATE ASSET MANAGEMENT % 27.55% 26 TAAMEER REAL ESTATE INVESTMENT % 27.56% 7 (EGP mln) (EGP mln) DICE SPORT AND CASUAL WEAR SAE %.% 1,271 PYRAMISA HOTELS AND RESORTS SAE % 51.67% 764 EGYPTIAN TOURAH PORTLAND % 12.29% 1,763 MISR OILS AND SOAP CO SAE % 15.71% 21 UNIVERSAL CO FOR PACKAGING % % 23 MISR CEMENT CO SAE % % 2,357 ARAB ENGINEERING INDUSTRIES SAE % 8.9% 58 GENERAL COMPANY FOR PAPER % 13.87% 254 VODAFONE EGYPT TELECOMM % 6.37% ARAB ALUMINUM CO SAE % 266.5% 211 (QAR mln) (QAR mln) QATAR INSURANCE CO SAQ % % 11,367 COMMERCIAL BANK PSQC % % 1,867 QATAR INDUSTRIAL MANUFACTURING % % 1,815 ZAD HOLDING CO SAQ % % 916 INDUSTRIES QATAR QSC % -18.3% 58,8 MEDICARE GROUP QSC % % 1,266 ALIJARAH HOLDING CO QPSC % % 41 EZDAN HOLDING GROUP QSC % % 18,17 AAMAL CO QPSC % % 4,174 QATAR FIRST BANK LLC % % 984 5

6 Top 5 MENA Stocks by Market Capitalization ( indicates native currency; Latest data) Company Name Country Market Cap (USD mln) MTD % YTD % 52w High 52w Low P/E P/B Dividend Yield 1 SAUDI BASIC INDUSTRIES CORPORATION SA 79, % 9.1% % 2 EMIRATES TELECOMMUNICATIONS GROUP AE 39, % -11.7% % 3 SAUDI TELECOM COMPANY SJSC SA 37, % -3.7% % 4 QATAR NATIONAL BANK QPSC QA 3, % -18.3% % 5 FIRST ABU DHABI BANK PJSC AE 3, % 2.1% % 6 NATIONAL COMMERCIAL BANK SJSC SA 28, % 25.1% % 7 AL RAJHI BANKING & INVESTMENT CORP SA 27, % -.2% % 8 SAUDI ELECTRICITY COMPANY SJSC SA 26, % 7.3% % 9 DP WORLD LTD AE 19, % 35.9% % 1 SAUDI ARABIAN MINING CO SJSC SA 17, % 44.1% % 11 INDUSTRIES QATAR QSC QA 15, % -18.3% % 12 JABAL OMAR DEVELOPMENT CO SJSC SA 15, % -14.% % 13 EMAAR PROPERTIES PJSC AE 15, % 1.2% % 14 NATIONAL BANK OF KUWAIT SAKP KW 14, % 19.5% % 15 ALMARAI CO SJSC SA 14, % -.9% % 16 SAMBA FINANCIAL GROUP SJSC SA 12, % -4.3% % 17 EMIRATES NBD BANK PJSC AE 12, % -4.4% % 18 EMIRATES ISLAMIC BANK PJSC AE 1, %.% % 19 KUWAIT FINANCE HOUSE KSCP KW 1, % 11.8% % 2 SAUDI BRITISH BANK SJSC SA 1, % 4.% % 21 BANQUE SAUDI FRANSI SJSC SA 1, % 19.9% % 22 ABU DHABI COMMERCIAL BANK PJSC AE 1, % 2.9% % 23 RIYAD BANK SJSC SA 9, % 5.6% % 24 KINGDOM HOLDING CO SA 8, % -27.2% % 25 YANBU NATIONAL PETROCHEMICALS CO SA 8, % 2.6% % 26 DUBAI ISLAMIC BANK PJSC AE 8, % 8.1% % 27 EMAAR MALLS PJSC AE 7, % -17.9% % 28 OOREDOO QSC QA 7, % -17.% % 29 MASRAF AL RAYAN QPSC QA 7, % -8.3% % 3 ALINMA BANK SJSC SA 6, % 15.8% % 31 ARAB NATIONAL BANK SA 6, % 12.% % 32 MOBILE TELECOMMUNICATIONS CO KSCP KW 6, %.% % 33 SAUDI ARABIA FERTILIZERS CO SJSC SA 6, % -22.3% % 34 EMIRATES INTEGRATED TELECOMM AE 6, % -16.9% % 35 QATAR ISLAMIC BANK QPSC QA 6, % -9.5% % 6

7 Top 5 MENA Stocks by Market Capitalization Continued ( indicates native currency; Latest data) Company Name Country Market Cap (USD mln) MTD % YTD % 52w High 52w Low P/E P/B Dividend Yield 36 DAMAC PROPERTIES DUBAI CO PSC AE 5, % 42.3% % 37 SAVOLA GROUP COMPANY SJSC SA 5, % -5.9% % 38 QATAR ELECTRICITY AND WATER CO QSC QA 5, % -23.3% % 39 AHLI UNITED BANK BSC BA 5, % 15.2% % 4 EZDAN HOLDING GROUP QSC QA 4, % -54.7% % 41 COMMERCIAL INTERNATIONAL BANK EG 4, %.5% % 42 ALDAR PROPERTIES PJSC AE 4, % -15.6% % 43 MESAIEED PETROCHEMICAL HOLDING CO QA 3, % -3.9% % 44 SAUDI KAYAN PETROCHEMICAL CO SJSC SA 3, % 1.4% % 45 ALAWWAL BANK SA 3, % -17.6% % 46 AGILITY PUBLIC WAREHOUSING CO KSCP KW 3, % 37.9% % 47 JARIR MARKETING CO SJSC SA 3, % 22.7% % 48 MASHREQBANK PSC AE 3, % 12.9% % 49 ABU DHABI ISLAMIC BANK PJSC AE 3, % -2.6% % 5 RABIGH REFINING AND PETROCHEMICAL SA 3, % 16.3% % Total MCap; Weighted Avg Div Yield 649, % Disclaimer: This report is prepared by Al Masah Capital Management Limited ( AMCML ). AMCML is a company incorporated in the DIFC (Dubai International Financial Centre) and regulated by the DFSA (Dubai Financial Services Authority). The information contained in this report does not constitute any offer to sell securities or the solicitation of any offer to buy, or recommendation for investment in, any securities in any jurisdiction. The information in this report is not intended as financial advice and is only intended to be used by experienced investment persons with appropriate investment knowledge and ones that AMCML is satisfied meet the regulatory criteria to be classified as a Professional Client as defined under the Rules & Regulations of the appropriate financial authority. More-over, none of the report is intended as a prospectus within the meaning of the applicable laws of any jurisdiction and none of the report is directed to any person in any country in which the distribution of such report is unlawful. This report provides general information only. The information and opinions in the report constitute a judgment as at the date indicated and are subject to change without notice. The information may therefore not be accurate or current. The information and opinions contained in this report have been compiled or arrived at from sources believed to be reliable in good faith, but no representation or warranty, express, or implied, is made by AMCML, as to their accuracy, completeness or correctness and AMCML does also not warrant that the information is up to date. Any reference to third party research material or any other report contained in this report represents the respective research organization's estimates and views and does not represent the views of AMCML and its officers and employees do not accept any liability or responsibility whatsoever with respect to its accuracy or correctness and AMCML has included such reports or made reference to such reports in good faith. This report may also provide the addresses of, or contain hyperlinks to websites. Except to the extent to which the report refers, AMCML takes no responsibility whatsoever for the contents therein. Such addresses or hyperlinks are provided solely for your convenience and information and the content of the linked site does not in any way form part of this report. Accessing such website or following such link through this report shall be at your own risk. Moreover, you should be aware of the fact that investments in undertakings, securities or other financial instruments involve general and specific risks. Past results do not guarantee future performance. AMCML does not accept any liability for any loss arising from the use of material presented in this report. AMCML may seek to do business, or may already have had some business dealings, with companies covered in this report. As a result, investors should be aware that AMCML may be considered as having a conflict of interest that could affect the objectivity of research produced. Investors should consider any AMCML research as only a single factor in making any investment decision. This document has not been reviewed by, approved by or filed with the DFSA. This report or any portion hereof may not be reprinted, sold or redistributed without our prior written consent of the Company. Copyright 215 Al Masah Capital Management Limited 7