Daily Market Report Saudi Arabia Stock Exchange 20 July 2016

Transcription

1 29-Jun 30-Jun Thousands 10:00 10:15 10:30 10:5 11:00 11:15 11:30 11:5 12:00 12:15 12:30 12:5 13:00 13:15 13:30 13:5 1:00 1:15 1:30 1:5 20 July 201 TASI Index,.9-3% Turnover (SAR mn) 3, % TASI Intra Day Movement Global commentary Research Department Tel: ,90,80,70,0,50,0,30,20,10 Intraday TASI Activity Trend (Last 10 Days) - 2 Turnover (LHS, SAR bn) Previous Close TASI Index (RHS) 9,000 8,500 8,000 7,500 7,000,500,000 5,500 5,000 Regional Indices Close 1D% WTD% YTD% KSA (TASI), Qatar (DSM) 10, Kuw ait (KSE) 5, Abu Dhabi (ADSM), Dubai (DFM) 3, Oman (MSM30) 5, Bahrain (BSE) 1, MSCI GCC Major Commodities / Currencies Close 1D % WTD % YTD % Gold Spot $/Oz 1, Silver Spot $/Oz Crude Oil (Brent) OPEC Basket Euro USD Index JPY Major Global Indices Close 1D % WTD % YTD % DJ Industrial 18, S&P 500 2, Nikkei 225 1, Hang seng 21, FTSE 100, CAC 0, MSCI World 1, MSCI EM Interest Rates 1M 3M 12M 3M Chg 1Y LIBOR (USD) SAIBOR EIBOR Data Sources: Bloomberg Updated as of 20/Jul/201 7:37 AM US stock markets declined on Tuesday, owing to mixed corporate earnings. The Nasdaq Composite Index dropped 0.%, while the S&P 500 edged down 0.1%, pulled down by the materials and energy sectors. However, the Dow Jones gained 0.1%, driven by McDonald s and Johnson & Johnson. European markets fell yesterday, as a result of weak corporate earnings and sluggish economic sentiment data from Germany. The DAX and the CAC 0 declined 0.8% and 0.%, respectively. However, the FTSE 100 ended on a flat note, as the losses were pared by the gains in energy stocks. Most of the GCC markets declined yesterday, on the back of fall in oil prices and mixed corporate results. Dubai fell 0.3%, led by Drake & Scull and Arabtec Holdings, while Kuwait declined 0.2%. Further, Abu Dhabi dropped 0.1%, despite rise in Abu Dhabi Commercial Bank. Meanwhile, Oman and Bahrain edged down 0.1% each. However, Qatar rose 0.%, driven by Qatar Islamic Bank and Qatar International Islamic Bank. Asian markets are trading on a mixed note this morning. The Nikkei 225 is trading down 0.7%, as investors are cautious ahead of the corporate earnings season, while the KOSPI is down 0.2%. However, the Hang Seng Index is trading up 0.8%, but the Shanghai Composite Index is trading on a flat note. Brent crude declined 0.% on Tuesday, owing to the rise in US dollar and concerns regarding oversupply of crude oil in the market. The investors brushed aside the larger-than-expected fall in crude oil inventory data by the API. Key crude contracts Brent and WTI ended at US$. (-0.%) and US$.5 (-1.3%), respectively. Saudi commentary Tadawul All Share Index (TASI) lost points or 3% to close at,.8. Thirteen of the fifteen sector indices closed lower. The advance decline ratio was 2/95. Trading turnover was around SAR 3.8bn. Saudi economic growth to hit 2% in 2017 IMF: Economic growth in Saudi Arabia, the GCC s biggest economy, is expected to hit percent in 2017, a 0.1 percent increase from the International Monetary Fund s (IMF) April outlook. The agency left its expectation for Saudi GDP growth in 201 unchanged at 1.2 percent in its latest World Economic Outlook report. )Argaam) The projections of IMF suggest that the GDP growth of the Kingdom is set to bottom out in 201 and stage an increase in Further, the GDP estimates for 2017 have been marginally upgraded suggesting evidence of better build-up of economic activity, which is positive for all asset classes in the Kingdom including equities. Al Rajhi Bank announces SAR0.75 dividend for first half of 201: The Board of Directors of Al Rajhi Bank has recommended the distribution of dividend to the tune of SAR0.75 per share for the first half of 201. (Tadawul) Al Rajhi Bank s dividend of SAR0.75 per share for the first half of 201 is higher than SAR per share dividend declared during the same period last year Please see penultimate page for additional important disclosures. Al Rajhi Capital (Al Rajhi) is a foreign broker-dealer unregistered in the USA. Al Rajhi research is prepared by research analysts who are not registered in the USA. Al Rajhi research is distributed in the USA pursuant to Rule 15a- of the Securities Exchange Act of 193 solely by Rosenblatt Securities, an SEC registered and FINRA-member broker-dealer. 1

2 SABB s H1 net profit rises 2%: Saudi British Bank (SABB) reported a net profit of SAR 2.3 billion in the first half of 201, a 1.8 percent y-o-y rise attributed to higher total operating income as net special commission income increased. There was also an increase in exchange and trading income, offset by a reduction in fee and commission income and gains on non-trading investments. (Argaam) Mobily said to be in talks on refinancing SAR 8 bln debt: Saudi Arabia s Etihad Etisalat Co. (Mobily) has started talks with creditors on refinancing debt worth SAR 8 billion to get better terms, Bloomberg reported on Tuesday, citing unnamed sources familiar with the matter. (Argaam) Latest Research Saudi Arabian Mining Co- Q2: Earnings below expectations Ma aden s Q2 net profit of SAR132mn (down 51% y-o-y) was below our estimate of SAR19mn and consensus estimate of SAR157mn, on the back of continuing unfavourable pricing environment for its products. Lower product prices were negated by higher sales volume, which led to revenue coming in-line with our estimates (SAR2.5bn, down 15.5% y-o-y; our estimate of SAR2.55bn). The company is implementing cost reduction initiatives to sustain margins in a challenging environment and has been able to reduce its operating expenses and cushion the margin decline. Going forward, we expect gold and aluminium volumes to increase led by production ramp up of new facilities. Moreover, the modest recovery in commodity prices should also support Ma aden s profitability in Q We will revise our estimates and rating on the company post a discussion with the management. Ma aden s stock price jumped ~28% since our last report in April. Hence, we revise our rating to Neutral (from Overweight earlier) and maintain our target price of SAR35 per share. Click here to download attached English Report Arabian Cement- Q2: Mixed performance Arabian Cement reported a disappointing set of numbers in Q2 with net profit of SAR12.8mn (down 12% y-o-y and down 3.7% q- o-q), missing our estimate (SAR171mn) and consensus estimates (SAR 18mn). While the company s top-line of SAR33mn (-18.% y-o-y) was better than our estimate of SAR351mn, higher than expected cost of goods sold, due to high cost of imported clinker led to gross and operating profits declining 1% y-o-y and were below our estimates. The partial consumption of imported clinker impacted the company s gross margin, which declined by ~830 bps as compared to the previous quarter when the company consumed its own clinker. For now, we reiterate Neutral rating on Arabian Cement with a target price of SAR.5 per share Click here to download attached English Report Disclosures Please refer to the important disclosures at the back of this report. 2

3 Cement Industries Building Retail Energy Transport Multi invt Hotels Media TASI Large Cap (>10% Index weight) Sectors Performance TASI Top Gainers / Losers TASI Petrochem Banks Telecom Company Last Price Chg % Vol (mn) Value Trd (SAR mn) Red Sea Housing Al Alamiya Coope Sisco Saudi Indl Devt Allied Coop Ins Company Last Price Chg % Vol (mn) Value Trd (SAR mn) Maaden Emaar Eco City Natl Agri Dev Dallah Healthcare Amana Coop Ins TASI Mid Cap (5-10% index weight) Sectors Performance TASI Top Index Movers / Losers (Heavy weight stocks) Real Estate Agri -1-2 Company Last Price Chg % Index Imp Value Trd (SAR mn) Savola Riyad Bank Mobily Jabal Omar Jarir Mktg Company Last Price Chg % Index Imp Value Trd (SAR mn) Maaden Sabic Samba Emaar Eco City Alinma Bk TASI Small Cap (<5% index weight) Sectors Performance TASI Volume Leaders Company Last Price Chg % Vol (mn) Value Trd (SAR mn) Alinma Bk Dar Al Arkan Saudi Kayan Sabic Solidarity Saudi Allied Coop Ins Maaden Emaar Eco City Al Sagr Coop Ins Malath TASI Stocks Closer to 52 Week High TASI - Stocks Closer to 52 Week Low Company Last Price 52Wk High % Diff Value Trd (SAR mn) Sanad Coop Ins % 00 Weqaya For Takaf % 00 Sadafco % 3 Bupa Arabia % Saudi Elec %.53 Company Last Price 52Wk Low % Diff Value Trd (SAR mn) Sanad Coop Ins % 00 Weqaya For Takaf % 00 Saudi Inv Bk % Safco % Riyad Bank % Disclosures Please refer to the important disclosures at the back of this report. 3

4 5-Jul DSM Bank Telecom Consumer Transport Real Estate ADSM Real Estate Energy Telecome Banks Fin. Industrial Consumer DFM Bank Reality Investment Transport Telcom Performance of Regional markets Country Last Index Change (%) MCap Volume Turnover P/E (x) P/E (x) P/E (x) P/B (x) Div Yld Close 1D 1M YTD US$ bn mn shr US$ mn 12M 201E 2017E Current 12M (%) Saudi Arabia, , Qatar 10, , Dubai 3, , Abu Dhabi, , Kuw ait 5, , Oman 5, , Bahrain 1, NA NA 0..7 Dubai Activity Trend (Last 10 Days) Dubai Sector Performances Dubai Top Gainers / Losers Turnover (LHS, AED bn) DFMGI Index (RHS) 3,00 3,550 3,500 3,50 3,00 3,350 3,300 3,250 3, Takaful Emarat Ins Takaful House Aramex Gulf Navigation Shuaa Capital National Cement Drake & Scull Intl Amlak Finance Arabtec Islamic Arab Ins Abu Dhabi Activity Trend (Last 10 Days) Abu Dhabi Sector Performances Abu Dhabi Top Gainers / Losers Turnover (LHS, AED bn) ADSMI Index (RHS) 5,000, Abu Dhabi Aviati Arkan Building Mat Abu Dhabi Nat Co Union Cement Rak Properties Natl Marine Dredg Abu Dhabi Natl Ins United Arab Bk Bank Of Sharjah Eshraq Propertie Qatar Activity Trend (Last 10 Days) Qatar Sector Performances Qatar Top Gainers / Losers Turnover (LHS, QAR bn) DSM Index (RHS) 10,800 10,00 10,000 9,00 9, QIsB Qatar Intl Is Bk 5.0 Barw a Real Est Qatar Electric CBQ United Devt Co Qatar QNB Disclosures Please refer to the important disclosures at the back of this report.

5 5-Jul BSE Banks Hotel & Tourism Industries Thousands KSE Technology Investment Industrial Real estate Bank Fin. Parallel Telecom Consumer Basic material Oil&Gas Healthcare Kuwait Activity Trend (Last 10 Days) Kuwait Sector Performances Kuwait Top Gainers / Losers Turnover (LHS, KWD mn) KWSEIDX Index (RHS) 5,395 5,390 5,385 5,380 5,375 5,370 5,35 5,30 5,355 5, Pamls Agro Produ Kuw ait Slaughter Marine Specialities Group Alrai Media Grp Kuw ait Cable Vision Automated Sys Gulf Franchising Kuw ait Natl Cinema Combined Group Oman Activity Trend (Last 10 Days) Oman Sector Performances Oman Top Gainers / Losers 8 0 Turnover (LHS, OMR mn) MSM30 Index (RHS) 5,90 5,920 5,900 5,880 5,80 5,80 5,820 5,800 5,780 5, Al Sharqiya Inv NBO Raysut Cement Oman Telecom Ooredoo MSM 30 Bank Industry Al-Anw ar Ceramic Al Anw ar Holding Ominvest Gulf Invest Svcs Renaissance Serv Bahrain Activity Trend (Last 10 Days) Bahrain Sector Performances Bahrain Top Gainers / Losers Turnover (LHS, BHD mn) BHSEASI Index (RHS) 1,180 1,170 1,10 1,150 1,10 1,130 1,120 1,110 1, Nass Corp Bahrain Duty Fre Aluminium Bahrain Ahli United Bk Disclosures Please refer to the important disclosures at the back of this report. 5

6 IMPORTANT DISCLOSURES FOR U.S. PERSONS This research report was prepared by Al Rajhi Capital (Al Rajhi), a company authorized to engage in securities activities in Saudi Arabia. Al Rajhi is not a registered broker-dealer in the United States and, therefore, is not subject to U.S. rules regarding the preparation of research reports and the independence of research analysts. This research report is provided for distribution to major U.S. institutional investors in reliance on the exemption from registration provided by Rule 15a- of the U.S. Securities Exchange Act of 193, as amended (the Exchange Act ). Any U.S. recipient of this research report wishing to effect any transaction to buy or sell securities or related financial instruments based on the information provided in this research report should do so only through Rosenblatt Securities Inc, 20 Broad Street 2th Floor, New York NY 10005, a registered broker dealer in the United States. Under no circumstances should any recipient of this research report effect any transaction to buy or sell securities or related financial instruments through Al Rajhi. Rosenblatt Securities Inc. accepts responsibility for the contents of this research report, subject to the terms set out below, to the extent that it is delivered to a U.S. person other than a major U.S. institutional investor. The analyst whose name appears in this research report is not registered or qualified as a research analyst with the Financial Industry Regulatory Authority ( FINRA ) and may not be an associated person of Rosenblatt Securities Inc. and, therefore, may not be subject to applicable restrictions under FINRA Rules on communications with a subject company, public appearances and trading securities held by a research analyst account. Ownership and Material Conflicts of Interest Rosenblatt Securities Inc. or its affiliates does not beneficially own, as determined in accordance with Section 13(d) of the Exchange Act, 1% or more of any of the equity securities mentioned in the report. Rosenblatt Securities Inc, its affiliates and/or their respective officers, directors or employees may have interests, or long or short positions, and may at any time make purchases or sales as a principal or agent of the securities referred to herein. Rosenblatt Securities Inc. is not aware of any material conflict of interest as of the date of this publication. Compensation and Investment Banking Activities Rosenblatt Securities Inc. or any affiliate has not managed or co-managed a public offering of securities for the subject company in the past 12 months, nor received compensation for investment banking services from the subject company in the past 12 months, neither does it or any affiliate expect to receive, or intends to seek compensation for investment banking services from the subject company in the next 3 months. Additional Disclosures This research report is for distribution only under such circumstances as may be permitted by applicable law. This research report has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient, even if sent only to a single recipient. This research report is not guaranteed to be a complete statement or summary of any securities, markets, reports or developments referred to in this research report. Neither Al Rajhi nor any of its directors, officers, employees or agents shall have any liability, however arising, for any error, inaccuracy or incompleteness of fact or opinion in this research report or lack of care in this research report s preparation or publication, or any losses or damages which may arise from the use of this research report. Al Rajhi may rely on information barriers, such as Chinese Walls to control the flow of information within the areas, units, divisions, groups, or affiliates of Al Rajhi. Investing in any non-u.s. securities or related financial instruments (including ADRs) discussed in this research report may present certain risks. The securities of non-u.s. issuers may not be registered with, or be subject to the regulations of, the U.S. Securities and Exchange Commission. Information on such non-u.s. securities or related financial instruments may be limited. Foreign companies may not be subject to audit and reporting standards and regulatory requirements comparable to those in effect within the United States. The value of any investment or income from any securities or related financial instruments discussed in this research report denominated in a currency other than U.S. dollars is subject to exchange rate fluctuations that may have a positive or adverse effect on the value of or income from such securities or related financial instruments. Past performance is not necessarily a guide to future performance and no representation or warranty, express or implied, is made by Al Rajhi with respect to future performance. Income from investments may fluctuate. The price or value of the investments to which this research report relates, either directly or indirectly, may fall or rise against the interest of investors. Any recommendation or opinion contained in this research report may become outdated as a consequence of changes in the environment in which the issuer of the securities under analysis operates, in addition to changes in the estimates and forecasts, assumptions and valuation methodology used herein. No part of the content of this research report may be copied, forwarded or duplicated in any form or by any means without the prior consent of Al Rajhi and Al Rajhi accepts no liability whatsoever for the actions of third parties in this respectthis research document has been prepared by Al Rajhi Capital Company ( Al Rajhi Capital ) of Riyadh, Saudi Arabia. It has been prepared for the general use of Al Rajhi Capital s clients and may not be redistributed, retransmitted or disclosed, in whole or in part, or in any form or manner, without the express written consent of Al Rajhi Capital. Receipt and review of this research document constitute your agreement not to redistribute, retransmit, or disclose to others the contents, opinions, conclusion, or information contained in this document prior to public disclosure of such information by Al Rajhi Capital. The information contained was obtained from various public sources believed to be reliable but we do not guarantee its accuracy. Al Rajhi Capital makes no representations or warranties (express or implied) regarding the data and information provided and Al Rajhi Capital does not represent that the information content of this document is complete, or free from any error, not misleading, or fit for any particular purpose. This research document provides general information only. Neither the information nor any opinion expressed constitutes an offer or an invitation to make an offer, to buy or sell any securities or other investment products related to such securities or investments. It is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation and the particular needs of any specific person who may receive this document. Investors should seek financial, legal or tax advice regarding the appropriateness of investing in any securities, other investment or investment strategies discussed or recommended in this document and should understand that statements regarding future prospects may not be realized. Investors should note that income from such securities or other investments, if any, may fluctuate and that the price or value of such securities and investments may rise or fall. Fluctuations in exchange rates could have adverse effects on the value of or price of, or income derived from, certain investments. Accordingly, investors may receive back less than originally invested. Al Rajhi Capital or its officers or one or more of its affiliates (including research analysts) may have a financial interest in securities of the issuer(s) or related investments, including long or short positions in securities, warrants, futures, options, derivatives, or other financial instruments. Al Rajhi Capital or its affiliates may from time to time perform investment banking or other services for, solicit investment banking or other business from, any company mentioned in this research document. Al Rajhi Capital, together with its affiliates and employees, shall not be liable for any direct, indirect or consequential loss or damages that may arise, directly or indirectly, from any use of the information contained in this research document. This research document and any recommendations contained are subject to change without prior notice. Al Rajhi Capital assumes no responsibility to update the information in this research document. Neither the whole nor any part of this research document may be altered, duplicated, transmitted or distributed in any form or by any means. This research document is not directed to, 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 or which would subject Al Rajhi Capital or any of its affiliates to any registration or licensing requirement within such jurisdiction.

7 Disclaimer and additional disclosures for Equity Research Disclaimer This research document has been prepared by Al Rajhi Capital Company ( Al Rajhi Capital ) of Riyadh, Saudi Arabia. It has been prepared for the general use of Al Rajhi Capital s clients and may not be redistributed, retransmitted or disclosed, in whole or in part, or in any form or manner, without the express written consent of Al Rajhi Capital. Receipt and review of this research document constitute your agreement not to redistribute, retransmit, or disclose to others the contents, opinions, conclusion, or information contained in this document prior to public disclosure of such information by Al Rajhi Capital. The information contained was obtained from various public sources believed to be reliable but we do not guarantee its accuracy. Al Rajhi Capital makes no representations or warranties (express or implied) regarding the data and information provided and Al Rajhi Capital does not represent that the information content of this document is complete, or free from any error, not misleading, or fit for any particular purpose. This research document provides general information only. Neither the information nor any opinion expressed constitutes an offer or an invitation to make an offer, to buy or sell any securities or other investment products related to such securities or investments. It is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation and the particular needs of any specific person who may receive this document. Investors should seek financial, legal or tax advice regarding the appropriateness of investing in any securities, other investment or investment strategies discussed or recommended in this document and should understand that statements regarding future prospects may not be realized. Investors should note that income from such securities or other investments, if any, may fluctuate and that the price or value of such securities and investments may rise or fall. Fluctuations in exchange rates could have adverse effects on the value of or price of, or income derived from, certain investments. Accordingly, investors may receive back less than originally invested. Al Rajhi Capital or its officers or one or more of its affiliates (including research analysts) may have a financial interest in securities of the issuer(s) or related investments, including long or short positions in securities, warrants, futures, options, derivatives, or other financial instruments. Al Rajhi Capital or its affiliates may from time to time perform investment banking or other services for, solicit investment banking or other business from, any company mentioned in this research document. Al Rajhi Capital, together with its affiliates and employees, shall not be liable for any direct, indirect or consequential loss or damages that may arise, directly or indirectly, from any use of the information contained in this research document. This research document and any recommendations contained are subject to change without prior notice. Al Rajhi Capital assumes no responsibility to update the information in this research document. Neither the whole nor any part of this research document may be altered, duplicated, transmitted or distributed in any form or by any means. This research document is not directed to, 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 or which would subject Al Rajhi Capital or any of its affiliates to any registration or licensing requirement within such jurisdiction. Explanation of Al Rajhi Capital s rating system Al Rajhi Capital uses a three-tier rating system based on absolute upside or downside potential for all stocks under its coverage except financial stocks and those few other companies not compliant with Islamic Shariah law: "Overweight": Our target price is more than 10% above the current share price, and we expect the share price to reach the target on a 12 month time horizon. "Neutral": We expect the share price to settle at a level between 10% below the current share price and 10% above the current share price on a 12 month time horizon. "Underweight": Our target price is more than 10% below the current share price, and we expect the share price to reach the target on a 12 month time horizon. "Target price": We estimate target value per share for every stock we cover. This is normally based on widely accepted methods appropriate to the stock or sector under consideration, e.g. DCF (discounted cash flow) or SoTP (sum of the parts) analysis. Please note that the achievement of any price target may be impeded by general market and economic trends and other external factors, or if a company s profits or operating performance exceed or fall short of our expectations. Contact us Al Rajhi Capital Research Department Head Office, King Fahad Road P.O. Box 551, Riyadh 1132 Kingdom of Saudi Arabia research@alrajhi-capital.com Al Rajhi Capital is licensed by the Saudi Arabian Capital Market Authority, License No. 0708/37. 7