Weekly Investment Report

Transcription

1 Economic & Market News Reuters: The Federal Reserve raised interest rates by a quarter of a percentage point to a range of 1.25% to 1.5%, which was the third rate hike this year. The rate increase represented a victory for a central bank that has struggled at times to deliver on its promised pace of monetary tightening. The Fed now envisions a burst of growth, ultra-low unemployment of below 4% in 218 and 219 and continued low interest rates, yet little movement on inflation. The Fed now sees GDP growing 2.5% in 218, up from the 2.1% forecast in September. The pace of growth is expected to cool to 2.1% in 219, slightly higher than the prior forecast of 2.%. The Fed also said it expected the nation s unemployment rate would fall to 3.9% next year and remain at that level in 219, well below what is considered to be full employment. It previously had forecast a jobless rate of 4.1% for those two years. Policymakers do see the federal funds rate rising to 3.1% in 22, slightly above the 2.8% neutral rate they expect to maintain in the long run. That indicates possible concerns about a rise in inflation pressures over time Zawya: GCC economy expected to grow near 2.5% next year. Oil prices above USD 5 a barrel will allow countries with large fiscal buffers and small populations to implement fiscal reforms at a slower pace than their regional peers, which will in turn support the operating environment in these countries. Higher oil prices and continued public spending support the stable 218 outlook on non-financial companies in the GCC. Rated GCC corporates are mainly government-related issuers, which will continue to benefit from strong competitive positions and government support. The ratings agency said fewer growth opportunities would drive GCC companies toward consolidations and acquisitions outside the region, as well as investments in increasing vertical integration, and corporate focus on costs. Mature state-owned corporates are increasingly looking to diversify funding sources, which could lead to an uptick in capital market activity. Analysts pointed out that governments across the GCC are committed to increase public spending just as Dubai announced through its recent expansionary budget with a record spending of AED 56.6 billion. The budget, allocating an increased spending to boost infrastructure efficiency in line Dubai Strategic Plan 221's targets and future commitments, especially Expo 22, reflects a strong commitment to social expenditure, including health, education and housing. Improved current account positions as a result of replenished oil reserves will support investment in non-oil sectors of the economy as the Gulf countries attempt to diversify away from hydrocarbons. Al Masah Capital: Another positive week for US markets which are pricing in the potential passing of a significant tax bill. On the other hand, lack of catalysts is still weighing heavily on regional markets trading activities, surprisingly disregarding the strength witnessed by crude oil prices. Over the week, four out of the eight indices were in green, while four were in red. Qatar came in as the best performing index with gains of +5.6% over the week, followed by Egypt +2.7%, Kuwait +2.3% and Abu Dhabi +1.5%. Dubai main index lost -1.1% on a weekly basis followed by Saudi, Bahrain and Oman, each losing around -.1% over the same period. The continuing outage of a North Sea pipeline coupled with the extension in OPEC production volumes supported oil prices, with crude oil hovering around the USD63 per barrel and the WTI ending the week at USD57.3 per barrel. For the remaining two weeks in 217, markets are expected to trade range bound with thin volumes as traders and investors start to put 217 behind them and begin looking towards the new year. Indexes Last WTD (%) MTD (%) YTD (%) Dubai (DFMGI) 3, % -1.89% -4.97% Abu Dhabi (ADSMI) 4, % 1.31% -4.56% Saudi (SASEIDX) 7, % 1.2% -1.87% Kuwait (KWSE) 6, % 2.18% 1.15% Egypt (EGX3) 14, %.67% 18.91% Qatar (DSM) 8, % 6.45% % Bahrain (BHSEIDX) 1, % -1.41% 3.7% Oman (MSM3) 5, % -.94% % TR GCC (Reuters) % 2.26% -7.4% DJ MENA %.% 5.77% Indexes Last WTD (%) MTD (%) YTD (%) DJI 24, %.97% 24.2% S&P 5 2, %.17% 18.46% NASDAQ 6, % 1.58% 32.95% STOXX Europe %.39% 7.41% FTSE 1 7, % 2.24% 4.87% DAX 13, %.61% 14.13% Commodities & FX Last WTD (%) MTD (%) YTD (%) Oil (Brent) % -.53% 69.61% Natural Gas % % 11.77% Gold % -1.51% 18.31% Silver % -2.25% 16.6% EURUSD % -1.26% 8.21% GBPUSD % -1.52% -9.63% USDJPY %.4% -6.43% USDCHF %.7% -1.15% AUDUSD % 1.3% 5.7% USDCAD % -.26% -7.7% LIBOR US Dollar WoW (%) Euro WoW (%) 1 Month % % 2 Month % % 3 Month % % 6 Month % % 12 Month % % CAC 4 5, % -.44% 1.2% Nikkei , % -.76% 17.99% SENSEX 33, %.95% 25.68% Shanghai Composite 3, % -1.54% 5.24% Hang Seng 29, % -1.13% 31.12% 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: Several economies in the Middle East, particularly those in the GCC, are transitioning towards a "new normal", and 218 will mark some interesting milestones. After a period of emergency austerity (which saw public spending cut by almost 2% from at the GCC level), public finances now look to be on a more sustainable path in most economies, allowing spending to start gradually recovering, according to ICAEW economic insight report. Against this backdrop, the GDP in the region is expected grow by 2.8% in 218 (after growth of just.3% in 217), and an acceleration from 1.4% to 3.2% in the wider Middle East. There will remain a broad spread of growth performance though, with GCC economies bound by the OPEC agreement to keep oil output low, growing slower than other economies (although non-oil sectors are forecast to pick up). 218 will be a key year of transition for Saudi Arabia in several contexts. The Emirates NBD Purchasing Managers Index for Saudi Arabia (a gauge of activity in the non-oil private sector) has averaged a reading of 56 for 217 so far, compared to the "no-change" reading of 5, and an average of below 55 for 216 overall. Private (i.e. business and households) bank deposits have also started to recover through the summer months, providing some support for spending power into 218. Reuters: Growth in China s property investment cooled in November as an official crackdown on riskier lending and stiffer regulation of the real estate market took effect. The Property investment growth eased for a second straight month to 4.6% in November from a year earlier, the slowest pace since July 216. Property sales by floor area reached a five-month high in November, rising 5.3% from a year earlier, compared with a 6.% decline in October, showing considerable resilience even as more tightening measures are expected for lower-tier cities. Property investment in the first 11 months of the year rose 7.5% from a year earlier, compared with 7.8% in Jan-Oct. The figure mainly focuses on residential real estate but also includes commercial and office space. China s economy has surprised global financial markets and investors with robust growth of 6.9% through the first nine months of this year, driven by a renaissance in long-ailing smokestack industries such as steel thanks to the resilient property market and government infrastructure spending. Zawya: Kuwait s current account surplus improved slightly in 2Q17 on lower remittances, a decline in imports, and some gain in investment income. The surplus improved to KWD.62 billion, up from KWD.44 billion in 1Q17, rising to an annualized 6.9% of GDP. The balance continues to show broad improvement from a year ago, thanks in large part to the higher oil price during the first half of 217 compared to the year before. The price of Kuwait export crude averaged USD 5 per barrel during the first half of 217, up from USD 34 the year before. Prices moved higher still after that, reaching USD 59.4 in November, a 35% increase from June s average. Oil exports have seen healthy growth on the back of higher oil prices, even as production declined due to OPEC cuts. Oil export receipts rose by 17% yearon-year (y/y) in 2Q17, as Kuwait oil price rose by 18%. Imports have also continued to see solid growth, putting some pressure on the trade balance. Imports grew by 7% y/y, boosted in part by strong demand for capital goods imports. Another source of support to the current account has come from easing worker remittances. Worker remittances declined by 18% y/y in 2Q17. Remittance outflows had already eased notably from the double-digit growth seen before 214; they shrank by 9% between 213 and 216. The decline is likely due to the lower oil price environment. 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 9.4 PB Year CDS Rates (basis points) Dubai Abu Dhabi Saudi Kuwait Egypt Qatar Bahrain Oman Average 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/ B 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/ A 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 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 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 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

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 % % 1,289 AMANAT HOLDINGS PJSC % 36.6% 3,35 MASHREQBANK PSC % 16.94% 12,871 UNION PROPERTIES PJSC % % 3,719 DUBAI INVESTMENTS PJSC % 5.88% 1,25 EMAAR PROPERTIES PJSC % -2.52% 49,76 TAKAFUL EMARAT INSURANCE PJSC % % 279 ARAMEX PJSC % 9.58% 6,53 AL SALAM BANK SUDAN PLC % 38.71% 29 MARKA PJSC.58-3.% % 291 GULF MEDICAL PROJECTS CO PSC % % 1,747 COMMERCIAL BANK INTERNATIONAL %.% 1,598 FOODCO HOLDING PJSC % 7.39% 494 NATIONAL MARINE DREDGING PSC % % 937 EMIRATES INSURANCE COMPANY PSC % 25.% 975 ABU DHABI NATIONAL INSURANCE CO % 39.53% 1,35 INVEST BANK PSC % -.44% 3,573 AL KHALEEJ INVESTMENT CO PJSC % % 273 ABU DHABI NATIONAL FOR BUILDING % % 12 GULF CEMENT CO PSC % -9.% 747 (SAR mln) (SAR mln) ANAAM INTERNATIONAL HOLDING % -3.44% 325 MAKKAH CONSTRUCTION AND DEV % -14.3% 12,822 RAYDAN COMPANY CJSC %.% 45 AL KATHIRI HOLDING CO %.% 63 AL JOUF CEMENT CO SJSC % 11.83% 1,38 ABDULLAH ABDUL MOHSIN % -3.64% 513 SAUDI ELECTRICITY COMPANY SJSC % -2.68% 9,827 FAWAZ ABDULAZIZ ALHOKAIR CO SJSC % % 6,426 SOUTHERN PROVINCE CEMENT CO % % 6,293 BUPA ARABIA FOR COOPERATIVE INS % % 7,52 (fils) (KWD mln) (fils) (KWD mln) BURGAN FOR WELL DRILLING TR % -1.91% 19 NAFAIS HOLDING COMPANY KSCP % -7.87% 8 AFAQ EDUCATIONAL SERVICES CO % -29.1% 6 KUWAIT AND GULF LINK TRANSPORT % 9.92% 19 TAAMEER REAL ESTATE INVESTMENT % 38.67% 7 KUWAIT CABLE VISION COMPANY % % 1 FIRST TAKAFUL INSURANCE CO KPSC % 24.9% 7 GULF FRANCHISING HOLDING CO KSCP % 16.67% 2 HAYAT COMMUNICATIONS CO KSCP % 27.27% 6 KAMCO INVESTMENT CO KSCP % -36.8% 16 (EGP mln) (EGP mln) IBNSINA PHARMA CO ,652.%.% 4,618 MARIDIVE AND OIL SERVICES SAE % 26.92% 135 SHARM DREAMS COMPANY FOR TOUR % 74.45% 336 ORASCOM HOTELS AND DEV % % 4,966 EGYPT GAS CO SAE % 32.82% 2,485 GENIAL TOURS CO SAE % 49.75% 12 VODAFONE EGYPT TELECO % 34.22% UPPER EGYPT FLOUR MILLS SAE % 97.79% 1,38 EGYPTIAN CO FOR INTNL TOURISTIC % -2.2% 1,247 EL SHAMS HOUSING AND URBAN % % 993 (QAR mln) (QAR mln) EZDAN HOLDING GROUP QSC % % 3,238 MAZAYA QATAR REAL ESTATE DEV % % 964 QATAR INSURANCE CO SAQ % -3.57% 14,198 AAMAL CO QPSC % -42.7% 4,92 MEDICARE GROUP QSC % -1.43% 1,745 QATAR CINEMA AND FILM DIST % % 144 AHLI BANK QSC % % 5,74 QATAR GENERAL INSURANCE %.% 4,113 DLALA BROKERAGE AND INVESTMENT % % 49 QATAR NATIONAL CEMENT CO QSC % % 4,278 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 8, % 1.4% % 2 EMIRATES TELECOMMUNICATIONS GROUP AE 4, % -9.3% % 3 SAUDI TELECOM COMPANY SJSC SA 36, % -5.8% % 4 QATAR NATIONAL BANK QPSC QA 31, % -15.9% % 5 FIRST ABU DHABI BANK PJSC AE 3, % 2.1% % 6 AL RAJHI BANKING & INVESTMENT CORP SA 27, % 1.6% % 7 NATIONAL COMMERCIAL BANK SJSC SA 26, % 18.1% % 8 SAUDI ELECTRICITY COMPANY SJSC SA 24, % -2.7% % 9 DP WORLD LTD AE 2, % 37.9% % 1 SAUDI ARABIAN MINING CO SJSC SA 15, % 31.3% % 11 INDUSTRIES QATAR QSC QA 15, % -19.1% % 12 JABAL OMAR DEVELOPMENT CO SJSC SA 14, % -2.3% % 13 ALMARAI CO SJSC SA 14, %.9% % 14 NATIONAL BANK OF KUWAIT SAKP KW 14, % 17.% % 15 EMAAR PROPERTIES PJSC AE 13, % -2.5% % 16 EMIRATES NBD BANK PJSC AE 12, % -4.% % 17 SAMBA FINANCIAL GROUP SJSC SA 12, % -7.2% % 18 KUWAIT FINANCE HOUSE KSCP KW 11, % 17.5% % 19 SAUDI BRITISH BANK SJSC SA 1, % 4.4% % 2 EMIRATES ISLAMIC BANK PJSC AE 1, %.% % 21 RIYAD BANK SJSC SA 9, % 5.8% % 22 ABU DHABI COMMERCIAL BANK PJSC AE 9, % -.7% % 23 BANQUE SAUDI FRANSI SJSC SA 9, % 7.7% % 24 YANBU NATIONAL PETROCHEMICALS CO SA 8, % 8.1% % 25 KINGDOM HOLDING CO SA 8, % -28.5% % 26 EZDAN HOLDING GROUP QSC QA 8, % -24.6% % 27 DUBAI ISLAMIC BANK PJSC AE 8, % 1.4% % 28 EMAAR MALLS PJSC AE 7, % -18.3% % 29 OOREDOO QSC QA 7, % -16.5% % 3 MASRAF AL RAYAN QPSC QA 7, % -4.2% % 31 ALINMA BANK SJSC SA 7, % 22.5% % 32 SAUDI ARABIA FERTILIZERS CO SJSC SA 7, %.% % 33 ARAB NATIONAL BANK SA 6, % 12.4% % 34 MOBILE TELECOMMUNICATIONS CO KW 6, % 7.1% % 35 EMIRATES INTEGRATED TELECO AE 6, % -19.5% % 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 QATAR ISLAMIC BANK QPSC QA 6, % -1.% % 37 SAVOLA GROUP COMPANY SJSC SA 5, % 1.5% % 38 EMAAR DEVELOPMENT PJSC AE 5, %.% % 39 DAMAC PROPERTIES DUBAI CO PSC AE 5, % 31.2% % 4 QATAR ELECTRICITY AND WATER CO QSC QA 5, % -23.8% % 41 AHLI UNITED BANK BSC BA 4, % 13.4% % 42 COMMERCIAL INTERNATIONAL BANK EG 4, % 1.5% % 43 ALDAR PROPERTIES PJSC AE 4, % -15.6% % 44 SAUDI KAYAN PETROCHEMICAL CO SJSC SA 4, % 21.4% % 45 MESAIEED PETROCHEMICAL HOLDING CO QA 4, % -22.5% % 46 DAR AL ARKAN REAL ESTATE DEV SA 3, % 121.8% % 47 QATAR INSURANCE CO SAQ QA 3, % -3.6% % 48 ALAWWAL BANK SA 3, % -16.4% % 49 AGILITY PUBLIC WAREHOUSING CO KSCP KW 3, % 41.% % 5 MASHREQBANK PSC AE 3, % 16.9% % Total MCap; Weighted Avg Div Yield 651, % 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 and such should not be relied upon by or distributed to Retail Clients. 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. 7