Weekly Investment Report

Transcription

1 Economic & Market News Reuters: US consumer prices recorded their biggest increase in six months in October on rising gasoline costs and rents, suggesting a pickup in inflation that potentially clears the way for the Federal Reserve to raise interest rates in December. Prospects for a rate hike next month also got a boost from other data, showing first-time applications for unemployment benefits tumbling to a 43-year low last week and housing starts surging to a nine-year high in October. The reports painted an upbeat picture of the economy early in the Q4 and came as Fed Chair Janet Yellen told lawmakers that the US central bank could lift borrowing costs relatively soon. The data gives the Fed more evidence to support a rate hike next month and the only thing standing in the way at this point would be a disastrous jobs report in early December, a remote possibility at best. The Labor Department of Consumer Price Index increased.4% last month after rising.3% in September. The CPI advanced 1.6% YTD, the biggest y-o-y increase since October 214. The CPI increased 1.5% in the year to September. Zawya: Bond and Sukuk sales continued to be popular in the GCC market during the Q3 216 since crude prices remain low resulting in revenue shortfalls and the need for debt coverage. Should oil prices not increase significantly, there is likely to be a similar funding need for Q4 216 as well. The sovereign bonds market continued to be active following a similar trend of large sovereign bond issuances last quarter. Bahrain issued BHD 3 million development bonds (approximately USD 79 million) with a 3 year maturity. More bonds are expected early next quarter from Oman. In the corporate bond market, Burgan Senior SPC issued its USD 5 million 5 year-bond carrying interest of 3.1%. Furthermore MAF Global Securities issued USD 3 million Notes due 224 carrying interest of 4.8%. Both issuances were guaranteed by Burgan Bank and Al Futtaim Group, incorporated in the Emirate of Dubai, respectively. Al Masah Capital: Egypt remains the star performer among its peers in the region going up by 5% over last week, breaking the 11, points for the first time since 28. The rise is backed by positive investors sentiments regarding the improvement that was long waited to be seen in the economy that can also be clearly seen in the increasing trading volumes. Saudi Arabia is also continuing its upward trend, with 1.5% increase over the course of last week also backed by the positive outlook that investors have regarding the economy. UAE markets followed their main peers in their positivity mood with Dubai s index going up by % followed by Abu Dhabi which witnessed a modest rise of.2% for the week, despite the new s that the government is intending to continue with bank mergers following FGB UH/NBAD UH merger. The potential mergers mentioned were ADCB merging with UNB and ADIB merging with Al-Hilal bank. The black gold is back on track, breaking the USD46 mark on hopes of an OPEC supply cut. GCC and Egypt markets are expected to continue their positive trend this week with increasing in volumes as more positive news are flowing into the markets. Indexes Last WTD (%) MTD (%) YTD (%) Dubai (DFMGI) 3, % -.68% 5.4% Abu Dhabi (ADSMI) 4, % -.19% -.35% Saudi (SEIDX) 6, % 1.26% -4.9% Kuwait (KWSE) 5, % 2.5% -1.84% Egypt (EGX3) 11, % 33.81% 6.17% Qatar (DSM) 9, % -3.91% -6.27% Bahrain (BHSEIDX) 1, % 2.74% -2.93% Oman (MSM3) 5, %.27% 1.66% TR GCC (Reuters) % -.88% -1.63% DJ MENA % 2.88% -1.86% Commodities & FX Last WTD (%) MTD (%) YTD (%) Oil (Brent) % -2.98% 25.7% Natural Gas % -6.5% 21.65% Gold % -5.38% 13.92% Silver % -7.21% 19.9% EURUSD % -3.59% -2.53% GBPUSD %.83% % USDJPY % 5.82% -7.81% USDCHF % 2.6%.75% AUDUSD % -3.64%.78% USDCAD %.68% -2.46% Indexes Last WTD (%) MTD (%) YTD (%) DJI 18, % 4.% 8.28% S&P 5 2, % 2.62% 6.75% NASDAQ 4,88.4 8%.14% 4.68% STOXX Europe %.12% -7.22% FTSE 1 6, % -2.57% 8.55% DAX 1, %.% -.73% LIBOR US Dollar WoW (%) Euro WoW (%) 1 Month % % 2 Month % % 3 Month.916 3% % 6 Month % % 12 Month % % CAC 4 4, % -.11% -2.86% Nikkei , % 3.11% -5.6% SENSEX 26, % -6.37%.13% Shanghai Composite 3, % 2.98% -9.79% Hang Seng 22, % -2.57% 1.96% 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 Economic & Market News (continued) Reuters: Central bank of Egypt kept its key interest rates unchanged, two weeks after surprising markets with a 3% hike in its key rates. The Monetary Policy Committee kept the overnight deposit rate at 14.8% and the overnight lending rate at 15.8%, as predicted by Reuters. The bank had already raised rates by a cumulative 55 bps this year. Recently, the central bank ditched its peg of 8.8 per dollar and hiked interest rates by 3 bps to stabilize the newly floated pound. Its initial guide level was 13 to the dollar and now it allowed the pound to drift to about 15.75/16. per dollar. Last week, the country secured a USD 12 billion loan from the IMF, on conditions it continues to push through painful economic reforms including imposing VAT, cutting electricity subsidies and raising fuel costs. The reforms contributed to a rise in Egypt's core inflation, which jumped in October although annual urban consumer price inflation eased for the second consecutive month after hitting an eight-year high in August. Reuters: Chinese President pledged further economic opening as leaders of Asia-Pacific countries sought new free-trade options following Donald Trump's election to U.S. president on promises to scrap or renegotiate trade deals. All eyes were on China at this year's APEC summit in Peru just over a week after Trump's surprise victory in the United States dashed hopes of the largest-ever U.S.-proposed trade deal, the Trans-Pacific Partnership (TPP), coming to fruition. Chinese President has been selling an alternate vision for regional trade by promoting the Beijing-backed Regional Comprehensive Economic Partnership (RCEP), which as it stands excludes the Americas. Chinese attendance at the APEC meeting was its largest ever and regional delegates said China would take the lead on trade if the U.S. turned toward protectionism. With the fate of the TPP uncertain, China's talks on RCEP, which include Australia, India and more than a dozen other countries, are seen as perhaps the only path to the broader Free Trade Area of the Asia-Pacific (FTAAP) that APEC aspires to. New Zealand Prime Minister John Key said the United States was an important partner in the region, but China would fill the void if a Trump administration backs away from free trade. Zawya: Kuwait is planning to impose taxes on expats remittances and companies, and privatize healthcare and education. A special committee has already prepared a package of economic and financial reform legislations to be presented by the new Cabinet and referred in mid-december. The government aims to start executing its economic reform plan early and expects fierce confrontation from the new parliament. The government believes that privatizing education and healthcare is a must, while the opposition considers this as unconstitutional. The health sector s privatization is inevitable and that hospital management would be offered to international specialized companies, starting with Jaber Hospital, while the school privatization would experimentally start with one school per educational area. Moreover, the government will also propose cancelling the current form of subsidies and direct them only to those with limited income. The agenda also includes imposing a 1% tax on companies and a 5% tax on expats money transfers. 3 US Government Bonds - Yield to Maturity (%) M 3M 6M 12M 2Y 5Y 1Y 3Y Last Week Current Week Global Equity Indexes - Rebased 4 CBOE S&P Volatility Index - VIX Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Feb-16 Apr-16 Jun-16 Aug-16 Oct-16 S&P 5 STOXX Europe 6 TR MENA Nikkei 225 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 Dubai DUBAI DOF SUKUK LTD USD 2/5/ 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 Qatar Petroleum RAS LAFFAN LNG 3 USD 3/9/ A Abu Dhabi Water & Electricity TAQA ABU DHABI NATL ENER USD 1/8/ A Abu Dhabi Water & Electricity TAQA ABU DHABI NATL ENER USD 16/9/ A 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 UDI 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/ Baa Burgan Bank K 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 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 IBOR 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 Top Weekly Performers by Country ( indicates native currency; Data as of the previous Thursday) GULF NAVIGATION HOLDING PJSC % % 85 DRAKE AND SCULL INTERNATIONAL % 24.52% 1,184 ARAMEX PJSC % 26.58% 5,856 DUBAI ISLAMIC INSURANCE % -2.75% 12 SHUAA CAPITAL PSC % 262.7% 1,566 DUBAI NATIONAL INSURANCE % -2.8% 271 ARABTEC HOLDING PJSC %.% 5,769 AJMAN BANK PJSC % -25.% 2,143 NATIONAL CENTRAL COOLING CO PJSC % 63.33% 1,447 TAKAFUL EMARAT INSURANCE PJSC % 5.56% 42 UNION INSURANCE CO PSC % 53.72% 616 UNION NATIONAL BANK PJSC % -4.7% 12,271 EMIRATES DRIVING CO PJSC % 38.61% 629 MANAZEL REAL ESTATE PJSC % -1.% 1,35 AL KHAZNA INSURANCE CO PSC % 31.3% 16 ABU DHABI NATIONAL INSURANCE CO % -27.8% 788 ABU DHABI NATIONAL ENERGY CO % 6.38% 3,33 INTERNATIONAL FISH FARMING % 25.18% 74 RAS AL KHAIMAH POULTRY % -8.47% 196 NATIONAL CORP FOR TOURISM % -1.9% 1,684 (R mln) (R mln) UDI RESEARCH AND MARKETING % % 2,488 BASIC CHEMICAL INDUSTRIES CO SJSC % 18.87% 667 UDI PRINTING AND PACKAGING CO % % 1,47 UDI ARABIAN REFINERIES CO SJSC % % 475 NATIONAL AGRICULTURE MARKETING % % 291 UDI TRANSPORT AND INVESTMENT % % 1,35 MOUWAT MEDICAL SERVICES CO % 7.22% 6,5 AL BABTAIN POWER AND TELECOM % % 1,121 NATIONAL MEDICAL CARE CO JSC % 22.52% 3,5 AL AH DEVELOPMENT CO SJSC % % 534 (fils) (KWD mln) (fils) (KWD mln) CREDIT RATING AND COLLECTION % -9% 7 YIACO MEDICAL COMPANY KPSC % 14.23% 53 AL FAT ENERGY HOLDING CO KPSC % 2.26% 7 AWJ HOLDING CO KSCP % -48.8% 1 REAL ESTATE TRADE CENTERS CO % 44.68% 5 FAT GLOBAL HOLDING CO %.% 2,168 KUWAIT REMAL REAL ESTATE CO KPSC % 44.78% 15 KUWAIT HOTELS CO KPSC % 2.45% 15 IFA HOTELS AND RESORTS CO KSCP % % 96 ZIMA HOLDING CO KSC % % 4 (EGP mln) (EGP mln) LECICO EGYPT E % % 247 EL SHAMS HOUSING AND URBAN % 49.42% 45 EGYPTIAN TRANSPORT % 41.53% 16 MINAPHARM PHARMACEUTICALS E % % 899 NAEEM HOLDING FOR INVESTMENTS % 48.78% 173 INTERNATIONAL DRY ICE CO E % 21.28% 2 VODAFONE EGYPT TELECOMM % 56.85% BROTHERS SOLIDARITY REAL ESTATE % % 6 FIRST INVESTMENT AND REAL ESTATE % % 13 PYRAMI HOTELS AND RESORTS E % 26.6% 561 (QAR mln) (QAR mln) QATAR FIRST BANK LLC %.% 1,986 QATAR GAS TRANSPORT CO LTD % -1.71% 12,716 DOHA INSURANCE CO QSC % -1.95% 935 AL KHALIJ COMMERCIAL BANK QSC % -.5% 6,436 INDUSTRIES QATAR QSC % -6.39% 62,925 VODAFONE QATAR QSC % -24.2% 8,159 DOHA BANK QSC % % 8,592 EZDAN HOLDING GROUP QSC % -5.97% 39,658 AL MEERA CONSUMER GOODS CO % % 3,24 QATARI INVESTORS GROUP QSC % 44.3% 6,752 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 UDI BASIC INDUSTRIES CORPORATION 68, % 11.7% % 2 EMIRATES TELECOMMUNICATIONS GROUP AE 42, % 11.5% % 3 UDI TELECOM CO SJSC 36, % -% % 4 QATAR NATIONAL BANK Q QA 35, % 4.3% % 5 AL RAJHI BANKING & INVESTMENT 27, % 2.2% % 6 NATIONAL COMMERCIAL BANK SJSC 21, % -19.6% % 7 UDI ELECTRICITY CO SJSC 2, % 14.6% % 8 INDUSTRIES QATAR QSC QA 17, % -6.4% % 9 JABAL OMAR DEVELOPMENT CO SJSC 16, % 22.5% % 1 FIRST GULF BANK PJSC AE 14, % -5.1% % 11 DP WORLD LTD AE 13, % -17.2% % 12 ALMARAI CO SJSC 13, % 3.9% % 13 EMAAR PROPERTIES PJSC AE 13, % 17.2% % 14 NATIONAL BANK OF ABU DHABI PJSC AE 12, % 11.3% % 15 MBA FINANCIAL GROUP SJSC 12, % -1.3% % 16 EMIRATES NBD BANK PJSC AE 12, % 9.1% % 17 UDI ARABIAN MINING CO SJSC 12, % 17.2% % 18 NATIONAL BANK OF KUWAIT KP KW 11, % -13.9% % 19 EZDAN HOLDING GROUP QSC QA 1, % -6.% % 2 KINGDOM HOLDING CO 1, % -33.1% % 21 UDI BRITISH BANK SJSC 9, % -3.% % 22 ABU DHABI COMMERCIAL BANK PJSC AE 9, % -8.3% % 23 EMAAR MALLS GROUP PJSC AE 9, % -6.9% % 24 KUWAIT FINANCE HOUSE KSCP KW 8, % 5.9% % 25 RIYAD BANK SJSC 8, % -1.1% % 26 BANQUE UDI FRANSI SJSC 8, % -3.2% % 27 OOREDOO QSC QA 8, % 22.5% % 28 UDI ARABIA FERTILIZERS CO SJSC 7, % -17.5% % 29 EMIRATES INTEGRATED TELECOMM AE 7, % 16.7% % 3 FAT GLOBAL HOLDING CO KW 7, %.% % 31 YANBU NATIONAL PETROCHEMICALS CO 7, % 44.9% % 32 DUBAI ISLAMIC BANK PJSC AE 6, % -8.% % 33 MASRAF AL RAYAN QSC QA 6, % -1.9% % 34 QATAR ISLAMIC BANK Q QA 6, % -6.3% % 35 QATAR ELECTRICITY AND WATER CO QSC QA 6, % -4.3% % 6

7 Top 5 MENA Stocks by Market Capitalization Continued ( indicates native currency; Latest data) Country Market Cap (USD mln) MTD % YTD % 52w High 52w Low P/E P/B Dividend Yield 36 MOBILE TELECOMMUNICATIONS CO KW 5, % 17.1% % 37 ALINMA BANK SJSC 5, % -4.1% % 38 QATAR INSURANCE CO Q QA 5, % 18.1% % 39 ARAB NATIONAL BANK 5, % -14.% % 4 ALDAR PROPERTIES PJSC AE 5, % 9.1% % 41 MEIEED PETROCHEMICAL HOLDING CO QA 5, % -21.8% % 42 COMMERCIAL INTERNATIONAL BANK EG 5, % 8.7% % 43 VOLA GROUP CO SJSC 5, % -28.1% % 44 ETIHAD ETILAT CO SJSC 4, % -18.3% % 45 AHLI UNITED BANK BSC BA 4, % -4.1% % 46 NATIONAL SHIPPING COMPANY OF K 4, % -13.1% % 47 DAMAC PROPERTIES DUBAI CO PSC AE 4, % 5.2% % 48 COMMERCIAL BANK OF DUBAI PSC AE 3, % -2.6% % 49 UDI HOLLANDI BANK SJSC 3, % -13.5% % 5 MAKKAH CONSTRUCTION AND DEV. 3, % -7.5% % Company Name Total MCap; Weighted Avg Div Yield 612, % 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 DF (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 DF. 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