Week ended Oct 05, Week ended Oct 12, Chg. % Market Indicators

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1 ` Market Review and Outlook The Qatar Stock Exchange (QSE) Index increased by points or 2.58% during the trading week to close at 8, Market capitalization increased by 2.3% to QR453.8 billion (bn) versus QR443.7bn at the end of the previous trading week. Of the 45 listed companies, 26 companies ended the week higher, while 18 declined and 1 remained unchanged. Ahli Bank (ABQK) was the best performing stock for the week with a gain of 10.0% on 80,906 shares traded only. On the other hand, Islamic Holding Group (IHGS) was the worst performing stock for the week with a decline of 6.9% on 172,463 shares traded. Industries Qatar (IQCD), Qatar Islamic Bank (QIBK) and Ooredoo (ORDS) were the primary contributors to the weekly index gains. IQCD was the biggest contributor to the index s weekly increase, adding 72.5 points to the index. QIBK was the second biggest contributor to the gains, tacking on 24.1 points to the index. Moreover, ORDS contributed 18.9 points from the index. Alternatively, Vodafone Qatar (VFQS) contributed negatively to the index, deleting 3.7 points from the index. Trading value during the week increased by 2.6% to reach QR845.6 million (mn) versus QR824.2mn in the prior week. The Banks and Financial Services sector led the trading value during the week, accounting for 45.1% of the total trading value. The Industrials sector was the second biggest contributor to the overall trading value, accounting for 20.1% of the total trading value. QNB Group (QNBK) was the top value traded stock during the week with total traded value of QR180.2mn. Trading volume increased by 1.0% to reach 38.9mn shares versus 38.5mn shares in the prior week. The number of transactions increased by 20.4% to reach 12,704 transactions versus 10,550 transactions in the prior week. The Banks and Financial Services sector led the trading volume, accounting for 32.5%, followed by the Industrials sector which accounted for 23.5% of the overall trading volume. Investment Holding Group (IGRD) was the top volume traded stock during the week with 6.03mn shares. Foreign institutions remained bullish with net buying of QR75.7mn vs. net buying of QR10.0mn in the prior week. Qatari institutions turned bearish with net selling of QR66.2mn vs. net buying of QR14.8mn the week before. Foreign retail investors turned bullish with net buying of QR12.9mn vs. net selling of QR7.5mn in the prior week. Qatari retail investors remained bearish with net selling of QR22.5mn vs. net selling of QR17.3mn the week before. In 2017 YTD, foreign institutions bought (on a net basis) ~$633mn worth of equities. QSE Index and Volume 8,400 8,200 8,000 Market Indicators Week ended Oct 12, 2017 Week ended Oct 05, 2017 Chg. % Value Traded (QR mn) Exch. Market Cap. (QR mn) 453, , Volume (mn) Number of Transactions 12,704 10, Companies Traded Market Breadth 26:18 7:35 Market Indices Close WTD% MTD% YTD% Total Return 13, (17.2) ALL Share Index 2, (1.2) (18.4) Banks and Financial Services 2, (0.4) (11.0) Industrials 2, (20.8) Transportation 1, (0.4) (32.1) Real Estate 1, (7.6) (27.2) Insurance 3, (3.1) (26.6) Telecoms 1, (13.5) Consumer Goods & Services 4, (3.1) (16.2) Al Rayan Islamic Index 3, (1.3) (14.0) Market Indices Weekly Index Performance 4.0% 2.0% 0.0% (2.0%) (4.0%) (6.0%) 8, , , , Oct 9-Oct 10-Oct 11-Oct 12-Oct Volume QSE Index 2.6% 2.5% 1.9% 0.1% Qatar (QSE)* Abu Dhabi Dubai Bahrain (0.5%) Kuwait (1.6%) Oman 8, (5.1%) Saudi Arabia 12,000,000 6,000,000 0 Regional Indices Close WTD% MTD% YTD% Weekly Exchange Traded Value ($ mn) Exchange Mkt. Cap. ($ mn) TTM P/E** P/B** Dividend Yield Qatar (QSE)* 8, (20.1) , Dubai 3, ,070.2 # Abu Dhabi 4, (0.5) , Saudi Arabia # 6, (5.1) (5.4) (4.4) 3, , Kuwait 6, (0.5) (0.8) , Oman 5, (1.6) (0.2) (11.3) , Bahrain 1, (0.7) , Source: Bloomberg, country exchanges and Zawya (** Trailing Twelve Months; * Value traded ($ mn) do not include special trades, if any; # Data as of October 11, 2017) Page 1 of 6

2 News Economic & Corporate News QNB Group: Qatari economy will remain resilient Qatar's economy remains one of the strongest in the Middle East and North Africa region despite the blockade by some neighboring countries, according to QNB Group weekly economic analysis. Hydrocarbon exports have continued uninterrupted, new trade routes have been established and the authorities are eager to attain a higher degree of economic self-sufficiency. While the blockade initially disrupted some economic activity, its impact has dissipated. Over the medium-term, the Qatari economy will prove resilient. Domestic industries will benefit from increased self-reliance while the government s plans to expand liquefied natural gas (LNG) production and a renewed drive to attract international tourists will drive future growth. (Peninsula Qatar) IMF: Blockade has no impact on Qatar gas exports International Monetary Fund (IMF) officially announced that the Arab quartet country s more than four-month old blockade against Qatar has not affected the country s energy exports. The diplomatic rift has not impacted global liquefied natural gas markets, as Qatar continued its export, the IMF stated. The diplomatic rift between Qatar, the world s largest exporter of liquefied natural gas, and several other countries in the region, including Saudi Arabia, has not affected liquefied natural gas markets, as Qatar s exports have continued, the IMF noted in its October 2017 World Economic Outlook (WEO). The IMF noted the natural gas price index, an average for Europe, Japan, and the US - decreased by 9.6% from February to August The decline was mostly tied to seasonal factors and robust supply from the US and Russia, and lower oil prices, which some natural gas prices are indexed to. (Peninsula Qatar) Hamad Port import container volume doubles in September The volume of import containers handled at Qatar s worldclass Hamad Port doubled in September compared with the average number of import containers received in the first six months of the year at the newly inaugurated facility. While the total number of import containers arrived at the port in the first half of the year stood around 157,000 TEUs, making a monthly average of a little over 26,100 TEUs, the volume of import containers shot up significantly to more than 54,000 TEUs in September, shipping industry sources said. Confirming the encouraging trend, sources attributed the remarkable leap in import volumes to business generated at the port, post blockade. Equally encouraging were imports in the two previous months, sources said. While it was close to 39,000 TEUs in July, the number exceeded 45,000 in August. (Gulf- Times.com) QNBK s net profit rises 6% YoY to QR10.3bn in 9M2017 QNB Group (QNBK) reported 6% YoY increase in its 9M2017 net profit to QR10.3bn. Net fees and commission income stood at QR2.7bn, whereas net interest income decreased by 3% YoY to reach QR13.2bn. The decrease in net interest income was primarily driven by the devaluation of the EGP which took place in late The Group s prudent cost control policy and strong revenue generating capability helped to improve the efficiency ratio (cost to income ratio) to 29% as at September 30, 2017 from 30.1% on September 30, 2016, which is considered one of the best ratios among financial institutions in the region. Total assets increased by 11% YoY to reach QR792bn at the end of September 30, The growth in total assets was driven by 14% YoY growth in loans & advances to QR579bn. QNBK was successful in attracting new customer deposits to comply with the cap on loans to deposit ratio of 100% set by Qatar Central Bank (QCB), which will be effective from 2017-end. These deposit mobilization efforts resulted in increased customer funding by 15% to reach QR574bn. This led to the reduction in the Group s loan to deposit ratio to 100.8%, compared with 101.3% in September This clearly demonstrates the success of QNBK s strategy to diversify its funding sources. The Group was able to maintain the ratio of non-performing loans to gross loans at 1.8%. The Group s conservative policy in regard to provisioning continued with the coverage ratio reaching 111% on September 30, Total Equity increased by 2% YoY to reach QR77bn as at September 30, Capital Adequacy Ratio (CAR) calculated as per the QCB and Basel III requirements stood at 15.4% as at September 30, 2017 (18.0%, including profitability up to September 30, 2017), higher than the regulatory minimum requirements of the QCB and Basel Committee. The Group is keen to maintain a strong capitalization in order to support future growth targets. QNBK is now the most valuable banking brand in the Middle East and Africa (MEA) region, with the value of its brand increased to $3.8bn to rise to the 60th place globally, in addition to attaining the highest rating of AA+ in brand strength, making it the only Qatari banking brand among the world s top 100. The total number of staff for the Group is more than 27,800 operating from 1,230 locations and 4,200 ATMs serving more than 21mn customers. (QNB Group Press Release) QIIK has $2,000,000,000 Sukuk program approved by the UK financial conduct authority Qatar International Islamic Bank (QIIK) has established a $2,000,000,000 Trust Certificate Issuance Program. The Program has been approved by the UK Financial Conduct Authority (FCA) and is expected to be admitted to the official list of the FCA and the London Stock Exchange within the following days. The Program has been assigned a provisional rating of A2 by Moody s Investors Service Cyprus and expected rating of A by Fitch Ratings. (QSE) IFRS9 to help reinforce confidence in the banking system The implementation of impairment provisions under the newlypromulgated International Financial Reporting Standard IFRS9 from 2018, the health of Qatari banks will get strengthened further. More prudent and stringent lending and investing conditions under IFRS 9 will further boost investor s confidence, say experts from the industry. IFRS9 is a revised financial reporting practice replacing the earlier version of IFRS (IAS 39). After the 2008 financial crisis, the US-based International Accounting Standards Board (IASB), decided to revise their accounting standards for financial instruments to address perceived deficiencies which were believed to have contributed to the magnitude of the crisis. (Peninsula Qatar) Page 2 of 6

3 Qatar Stock Exchange Top Gainers 12.0% Top Decliners 0.0% 10.0% 8.0% 7.1% 6.5% 6.4% 5.9% -3.0% -3.7% -3.2% -2.4% 4.0% -6.0% -6.0% -6.9% 0.0% Al Ahli Bank Doha Insurance Doha Bank Industries Qatar Qatar General Insurance & Reinsurance -9.0% Islamic Holding Group Investment Holding group Qatar First Bank Vodafone Qatar Mannai Corp. Most Active Shares by Value (QR Million) Most Active Shares by Volume (Million) QNB Group Industries Qatar Masraf Al Rayan Investment Holding group Qatar First Bank 0.0 Investment Holding group Qatar First Bank Ezdan Real Estate Vodafone Qatar Mazaya Qatar Investor Trading Percentage to Total Value Traded Net Traded Value by Nationality (QR Million) 100% 80% 60% 30.77% 9.42% 16.44% 21.82% 7.89% 24.26% Non-Qatari % 20% 43.37% 46.03% (89) Qatari 594 0% Buy Sell 506 Qatari Individuals Qatari Institutions (200) (100) Non-Qatari Individuals Non-Qatari Institutions Net Investment Total Sold Total Bought Page 3 of 6

4 TECHNICAL ANALYSIS OF THE QSE INDEX Source: Bloomberg The Index managed to close in the green and gained 2.58% from the week before; it has been down for the past 10 weeks. The 8,000 level proved to be a strong support and the Index created a bullish engulfing candlestick pattern. Consequently, we expect the Index to be positive in the foreseen future. Our resistance level remains around the 10,000 level. DEFINITIONS OF KEY TERMS USED IN TECHNICAL ANALYSIS RSI (Relative Strength Index) indicator RSI is a momentum oscillator that measures the speed and change of price movements. The RSI oscillates between 0 to 100. The index is deemed to be overbought once the RSI approaches the 70 level, indicating that a correction is likely. On the other hand, if the RSI approaches 30, it is an indication that the index may be getting oversold and therefore likely to bounce back. MACD (Moving Average Convergence Divergence) indicator The indicator consists of the MACD line and a signal line. The divergence or the convergence of the MACD line with the signal line indicates the strength in the momentum during the uptrend or downtrend, as the case may be. When the MACD crosses the signal line from below and trades above it, it gives a positive indication. The reverse is the situation for a bearish trend. Candlestick chart A candlestick chart is a price chart that displays the high, low, open, and close for a security. The body of the chart is portion between the open and close price, while the high and low intraday movements form the shadow. The candlestick may represent any time frame. We use a one-day candlestick chart (every candlestick represents one trading day) in our analysis. Doji candlestick pattern A Doji candlestick is formed when a security's open and close are practically equal. The pattern indicates indecisiveness, and based on preceding price actions and future confirmation, may indicate a bullish or bearish trend reversal. Shooting Star/Inverted Hammer candlestick patterns These candlestick patterns have a small real body (open price and close price are near to each other), and a long upper shadow (large intraday movement on the upside). The Shooting Star is a bearish reversal pattern that forms after a rally. The Inverted Hammer looks exactly like a Shooting Star, but forms after a downtrend. Inverted Hammers represent a potential bullish trend reversal. Page 4 of 6

5 Company Name Price October 12 % Change WTD % Change YTD Market Cap. QR Million TTM P/E P/B Div. Yield Qatar National Bank (17.28) 113, Qatar Islamic Bank (8.76) 22, Commercial Bank of Qatar (0.21) (9.73) 11, N/A Doha Bank (14.03) 8, Al Ahli Bank (15.19) 6, Qatar International Islamic Bank (18.79) 7, Masraf Al Rayan (3.72) 27, Al Khalij Commercial Bank (30.00) 4, Qatar First Bank 6.55 (3.68) (36.41) 1,310 N/A 0.8 N/A National Leasing (1.49) (26.57) 557 N/A Dlala Holding (0.58) (20.89) N/A Qatar & Oman Investment 7.83 (0.38) (21.31) Islamic Holding Group (6.90) (36.07) Banking and Financial Services 204,119 Zad Holding (1.53) (20.40) Qatar German Co. for Medical Devices (26.73) 85 N/A 1.2 N/A Salam International Investment (26.24) Medicare Group , Qatar Cinema & Film Distribution (8.93) Qatar Fuel (0.16) (25.15) 9, Widam Food Co (8.84) 1,116 N/A Mannai Corp (2.38) (23.13) 2, Al Meera Consumer Goods (18.29) 2, Consumer Goods and Services 20,789 Qatar Industrial Manufacturing (6.04) 1, Qatar National Cement (1.06) (17.76) 4, Industries Qatar (16.71) 59, Qatari Investors Group (0.12) (41.97) 4, Qatar Electricity and Water (20.31) 19, Aamal 8.02 (1.35) (41.16) 5, Gulf International Services (38.97) 3,527 N/A Mesaieed Petrochemical Holding (0.77) (18.23) 16, Invesment Holding Group 7.33 (6.03) N/A 608 N/A Industrials 114,940 Qatar Insurance (1.24) (32.19) 13, Doha Insurance (17.58) Qatar General Insurance & Reinsurance (15.98) 3, Al Khaleej Takaful Insurance (34.60) Qatar Islamic Insurance Insurance 19,218 United Development (1.69) (32.45) 4, Barw a Real Estate (5.32) 12, Ezdan Real Estate (37.79) 24, Mazaya Qatar Real Estate Development 9.07 (1.52) (33.82) 1, N/A Real Estate 43,173 Ooredoo (15.80) 27, Vodafone Qatar 7.81 (3.22) (16.65) 6,603 N/A 1.4 N/A Telecoms 34,060 Qatar Navigation (Milaha) (42.47) 6, Gulf Warehousing (21.43) 2, Qatar Gas Transport (Nakilat) (32.44) 8, Transportation 17,520 Qatar Exchange 453,819 Source: Bloomberg Page 5 of 6

6 Contacts Saugata Sarkar, CFA Shahan Keushgerian Zaid al-nafoosi, CMT, CFTe Head of Research Senior Research Analyst Senior Research Analyst Tel: (+974) Tel: (+974) Tel: (+974) Mohamed Abo Daff QNB Financial Services Co. W.L.L. Senior Research Analyst Contact Center: (+974) Tel: (+974) PO Box Doha, Qatar Disclaimer and Copyright Notice: This publication has been prepared by QNB Financial Services Co. W.L.L. ( QNBFS ) a wholly-owned subsidiary of Qatar National Bank (Q.P.S.C.). QNBFS is regulated by the Qatar Financial Markets Authority and the Qatar Exchange. Qatar National Bank (Q.P.S.C.) 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 6 of 6