Weekly Investment Report

Transcription

1 Economic & Market News Reuters: U.S. President Donald Trump signed Republicans massive USD 1.5 trillion tax overhaul into law, cementing the biggest legislative victor o his irrst ear in office, and also approved a short-term spending bill that averts a possible government shutdown. The two pieces o legislation represent Trump s most signiircant accomplishment with Congress since taking office in Januar, as well as a sign o what awaits when he returns rom Florida after the Christmas holida. The tax package, the largest such overhaul since the 198s, slashes the corporate rate rom 35% to 21% and temporaril reduces the tax burden or most individuals as well. Trump praised several companies that have announced emplo ee bonuses in the wake o the bill s passage, naming AT&T, Boeing, Wells Fargo, Comcast and Sinclair Broadcast Group. The spending bill extends ederal unding through Jan. 19, largel at current levels. It does nothing to resolve broader disputes over immigration, healthcare and militar spending. Republicans also are divided over whether to ollow up their sweeping overhaul o the U.S. tax code with a dramatic restructuring o ederal beneirt programs. Zawya: Saudi Arabia will increase government spending next ear and slow an austerit drive as it struggles to lift the econom out o recession in the ace o low oil prices, according to a state budget. Ri adh plans to boost spending to a record SAR 978 billion (USD 261 billion) in 218 compared to SAR 89 billion in the original 217 budget plan. As a result, the pace o decline in the government's budget deircit will slow next ear. The 218 deircit is projected at SAR 195 billion against an actual SAR 23 billion in 217. In a speech, King Salman ormall announced that the target date or eliminating the deircit would be pushed back to 223, rom the original target o 22. B imposing new taxes and slashing spending in some areas, Ri adh has been battling to bring down its deircit since 215, when lower oil export revenues produced a record budget gap o SAR 367 billion or about 15% o GDP. The austerit drive has restored investor conirdence in the Saudi currenc and irnancial markets but taken a heav toll on the econom, where private sector growth has slowed to a crawl. Data or the irrst hal o 217 showed the overall econom in recession, partl because o cut-backs in oil output. That has prompted the government, under pressure to cut an unemplo ment rate among Saudi citizens that is officiall put at 12.8%, to plan on loosening its purse strings next ear. Al Masah Capital: With 217 is coming to an end, most o the regional markets advanced on a weekl basis driven b the rise in oil prices coupled with 218 budget announcements that revealed governments expansion in spending. Saudi came as the best per ormer among its peers with 1.9% up W-o-W, ollowed b Kuwait +1.3%, Bahrain +1.2%, Dubai +.3% and Abu Dhabi +.2%, while Oman remained unchanged or the same period. Eg pt was the onl index that ended the week marginall low b -.1%. Crude oil reached a new high or this ear, ending the week at USD65.25 per barrel, marking a YTD per ormance o %, while WTI ended the week up b +2%. With the absence o oreign participation because o the holida s season, regional markets trading activit is expected to remain range bound with subdued volumes. Indexes Last WTD (%) MTD (%) YTD (%) Dubai (DFMGI) 3, % -1.61% -4.7% Abu Dhabi (ADSMI) 4, % 1.54% -4.34% Saudi (SASEIDX) 7, % 2.94% -.1% Kuwait (KWSE) 6, % 3.51% 11.58% Egypt (EGX3) 14, %.59% 18.82% Qatar (DSM) 8, % 11.76% % Bahrain (BHSEIDX) 1, % -.2% 4.97% Oman (MSM3) 5, % -.91% % TR GCC (Reuters) % 4.% -5.83% DJ MENA %.% 5.77% Commodities & FX Last WTD (%) MTD (%) YTD (%) Oil (Brent) % 2.64% 75.3% Natural Gas % % 14.12% Gold %.2% 2.14% Silver % -.43% 18.22% EURUSD % -.38% 9.18% GBPUSD % -1.22% -9.35% USDJPY %.66% -5.85% USDCHF %.58% -1.27% AUDUSD.77.93% 1.97% 6.5% USDCAD % -1.26% -8.1% Indexes Last WTD (%) MTD (%) YTD (%) DJI 24, % 1.98% 25.26% S&P 5 2, % 1.35% 19.85% NASDAQ 6, % 1.56% 32.93% STOXX Europe %.93% 7.99% FTSE 1 7, % 3.63% 6.3% DAX 13, %.37% 13.86% LIBOR US Dollar WoW (%) Euro WoW (%) 1 Month % % 2 Month % % 3 Month % % 6 Month % % 12 Month % % CAC 4 5, % -.15% 1.33% Nikkei , %.78% 19.82% SENSEX 33, % 2.39% 27.47% Shanghai Composite 3, % -.61% 6.23% Hang Seng 29, % 1.37% 34.44% 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 Economic & Market News (continued) Zawya: The Kuwait Vision 235 will oreground the private sector s backing to the national econom, and achieving sustainable development, according to Secretar General o the Supreme Council or Planning and Development (GSSCPD). The 235 cr stallizes the private efforts or backing the econom, and sets more effective policies or attracting oreign investments and aims to reduce the official contribution in projects to 3-4%. Re erring to the Saad Al-Abdullah Cit, the irrst smart one in Kuwait, work is proceeding and is now in the design phase. The cit will be constructed as a partnership between the Kuwaiti Public Authorit or Housing Wel are (PAHW) and the Korean Land and Housing Corporation, according to the GSSCPD Secretar General. The major challenge acing the implementation o development plans, is related to technolog and altering the culture o the human element at the government offices. For his part, Director General o the Central Agenc or In ormation Technolog stressed CAIT s role in the implementation o the Kuwait vision 235. This role ocuses on various aspects, mainl promoting the government management (the e-services sector) and developing the in rastructure or urther use o application solution while dealing with the public. Reuters: China will deepen structural re orms and curb risks to the countr s irnancial s stem while maintaining stead economic growth in 218. China has seen better than expected economic growth this ear even as it stepped up a campaign to cut debt, though there are growing concerns that the tighter polic environment could weigh on growth in the world s second-largest econom next ear. The government will push orward with structural suppl -side re orm and maintain prudent, neutral monetar polic next ear as it looks to improve the qualit o growth. In the irrst nine months o this ear, the econom grew 6.9% rom a ear earlier. Growth was underpinned b stronger exports and sustained state spending, positioning China to exceed the government s growth target o around 6.5% this ear. Beijing has made progress this ear controlling the level o debt in the econom as a portion o GDP, with corporate debt ratios declining slightl this ear, according to data rom the Bank o International Settlements. That aligns with a campaign this ear to de use points o risk in China s irnancial markets, including reining in the massive shadow banking sector and rolling out new rules or micro-lenders. Zawya: Middle East passenger numbers are orecast to grow b 7% in 218 according to the International Air Transport Association (IATA). The Arab air transport market grew b 9.9% in the past ear, according to the Arab Air Carriers Organisation at its 217 AGM. Growth irgures like these should support livel debate at ATM 218 and provide an element o cautious optimism." IATA irgures also revealed that Middle East airlines will see net proirts doubling to USD 6 million in 218, double what the are estimated to make this ear. Passenger capacit is also estimated to rise b 6.6% this ear and a urther 4.9% increase is orecast or 218. The success o the aviation industr in the sk is matched in the Middle East b the continued huge in rastructure investment. The total value o 152 active aviationrelated projects in the Middle East reached USD 57.7 billion (AED billion) at the end o April 217, according to research provider BNC Network. In the GCC countries, Saudi Arabia accounted or the largest share o project value (at 46% o the GCC s total), ollowed b the UAE with 26% and Kuwait with 12%. The Gul region s aviation projects also accounted or 72% o the total estimated value or all aviation projects in the Middle East and North A rica. 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-14Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15Feb-16 Apr-16 Jun-16 Aug-16 Oct-16 Dec-16Feb-17 Apr-17 Jun-17 Aug-17 Oct-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/ AAA 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 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 EGIBR Bank Rates T-Bill Yields QIBOR QCB Interest Rates BHIBOR Interest Rates 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 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 Top Weekly Performers by Country ( indicates native currenc ; Data as o the previous Thursda ) EMIRATES ISLAMIC BANK PJSC %.% 52,118 TAKAFUL EMARAT INSURANCE PJSC % % 3 AL SALAM BANK SUDAN PLC % 45.16% 218 NATIONAL CENTRAL COOLING CO PJSC % -5.97% 5,131 UNION PROPERTIES PJSC % % 3,719 AL SAFWA MUBASHER FINANCIAL SER %.% 144 MASHREQBANK PSC % 11.29% 12,246 DXB ENTERTAINMENTS PJSC % -51.% 5,95 EMAAR DEVELOPMENT PJSC %.% 2,314 MARKA PJSC % -63.4% 28 INVEST BANK PSC % 1.18% 3,953 RAS AL KHAIMAH CERAMICS PSC % 11.84% 2,351 ABU DHABI AVIATION %.% 1,334 NATIONAL BNK OF UMM AL QAIWAIN % -3.23% 5,542 SUDATEL TELECOM GROUP LTD % 7.55% 69 ABU DHABI SHIP BUILDING PJSC % % 424 NATIONAL TAKAFUL CO PJSC.45-1.% % 67 AL KHALEEJ INVESTMENT CO PJSC % % 252 EMIRATES INSURANCE COMPANY PSC % 15.38% 9 BANK OF SHARJAH PJSC % % 2,435 (SAR mln) (SAR mln) YANBU CEMENT COMPAY SJSC % % 5,158 SAUDI ENAYA COOPERATIVE INS % 13.29% 365 SAUDI CEMENT CO SJSC % % 7,466 TABUK CEMENT CO SJSC % 14.2% 1,31 CITY CEMENT CO CJSC % % 2,27 RABIGH REFINING AND PETROCHEMIC % 4.43% 14,454 ANAAM INTERNATIONAL HOLDING % % 298 FAWAZ ABDULAZIZ ALHOKAIR CO SJSC % % 6,426 BUPA ARABIA FOR COOPERATIVE INS % % 7,52 ABDULLAH AL OTHAIM MARKETS CO % 2.81% 5,355 (irls) (KWD mln) (irls) (KWD mln) REAL ESTATE ASSET MANAGEMENT % 76.2% 36 NAFAIS HOLDING COMPANY KSCP 1, % 26.68% 11 BURGAN FOR WELL DRILLING TRAD % -1.91% 19 KUWAIT CABLE VISION COMPANY % % 1 PALMS AGRO PRODUCTION CO KSCP % % 4 NATIONAL INTERNATIONAL HOLDING % % 11 UNITED PROJECTS FOR AVIATION SER % 5.83% 58 SHUAIBA INDUSTRIAL COMPANY KPSC % 5.93% 25 HEAVY ENGINEERING INDUSTRIES % 22.62% 37 WARBA INSURANCE COMPANY KSCP % -4.98% 1 (EGP mln) (EGP mln) ARAB MOLTAQA INVESTMENTS CO % 112.% 651 VODAFONE EGYPT TELECO % 93.22% GENERAL COMPANY FOR SILOS % % 615 MARIDIVE AND OIL SERVICES SAE % 26.92% 135 IBNSINA PHARMA CO %.% 5,61 ORANGE EGYPT FOR TELECO % 85.1% 18,843 REACAP FINANCIAL INVESTMENTS SAE % 42.33% 453 DELTA INSURANCE CO SAE % 15.49% 385 MISR OILS AND SOAP CO SAE % 94.98% 156 AL FANAR CONTRACTING % % 8 (QAR mln) (QAR mln) ISLAMIC HOLDING GROUP QPSC % -4.49% 26 SALAM INTERNATIONAL INVESTMENT % -38.1% 784 OOREDOO QSC % -5.5% 3,96 INVESTMENT HOLDING GROUP %.% 488 ALIJARAH HOLDING CO QPSC % % 546 AHLI BANK QSC % % 5,74 DLALA BROKERAGE AND INVESTMENT % % 49 QATAR NATIONAL CEMENT CO QSC % % 4,278 QATAR INTERNATIONAL ISLAMIC BNK % -2.38% 7,864 ZAD HOLDING CO SAQ % % 981 5

6 Top 5 MENA Stocks by Market Capitalization ( indicates native currenc ; 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 81, % 11.5% % 2 EMIRATES TELECOMMUNICATIONS GROUP AE 4, % -8.5% % 3 SAUDI TELECOM COMPANY SJSC SA 36, % -5.2% % 4 QATAR NATIONAL BANK QPSC QA 33, % -12.% % 5 FIRST ABU DHABI BANK PJSC AE 3, % 2.6% % 6 AL RAJHI BANKING & INVESTMENT CORP SA 28, % 2.7% % 7 NATIONAL COMMERCIAL BANK SJSC SA 27, % 19.7% % 8 SAUDI ELECTRICITY COMPANY SJSC SA 23, % -3.8% % 9 DP WORLD LTD AE 2, % 38.2% % 1 INDUSTRIES QATAR QSC QA 16, % -15.8% % 11 SAUDI ARABIAN MINING CO SJSC SA 15, % 31.% % 12 JABAL OMAR DEVELOPMENT CO SJSC SA 14, % -2.% % 13 ALMARAI CO SJSC SA 14, % -.4% % 14 NATIONAL BANK OF KUWAIT SAKP KW 14, % 17.4% % 15 EMIRATES ISLAMIC BANK PJSC AE 14, %.% % 16 EMAAR PROPERTIES PJSC AE 13, % -.3% % 17 SAMBA FINANCIAL GROUP SJSC SA 12, % -2.3% % 18 EMIRATES NBD BANK PJSC AE 12, % -4.% % 19 SAUDI BRITISH BANK SJSC SA 11, % 12.% % 2 KUWAIT FINANCE HOUSE KSCP KW 11, % 18.6% % 21 RIYAD BANK SJSC SA 1, % 1.% % 22 ABU DHABI COMMERCIAL BANK PJSC AE 9, % -2.2% % 23 BANQUE SAUDI FRANSI SJSC SA 9, % 11.9% % 24 EZDAN HOLDING GROUP QSC QA 8, % -19.8% % 25 KINGDOM HOLDING CO SA 8, % -26.% % 26 YANBU NATIONAL PETROCHEMICALS CO SA 8, % 7.8% % 27 OOREDOO QSC QA 8, % -5.5% % 28 DUBAI ISLAMIC BANK PJSC AE 8, % 11.1% % 29 MASRAF AL RAYAN QPSC QA 7, % 1.3% % 3 ALINMA BANK SJSC SA 7, % 25.4% % 31 EMAAR MALLS PJSC AE 7, % -2.6% % 32 SAUDI ARABIA FERTILIZERS CO SJSC SA 7, %.% % 33 ARAB NATIONAL BANK SA 6, % 12.5% % 34 QATAR ISLAMIC BANK QPSC QA 6, % -6.7% % 35 MOBILE TELECOMMUNICATIONS CO KW 6, % 6.3% % 6

7 Top 5 MENA Stocks by Market Capitalization Continued ( indicates native currenc ; Latest data) Company Name Country Market Cap (USD mln) MTD % YTD % 52w High 52w Low P/E P/B Dividend Yield 36 EMIRATES INTEGRATED TELECO AE 6, % -2.% % 37 SAVOLA GROUP COMPANY SJSC SA 5, % 2.9% % 38 EMAAR DEVELOPMENT PJSC AE 5, %.% % 39 DAMAC PROPERTIES DUBAI CO PSC AE 5, % 3.4% % 4 QATAR ELECTRICITY AND WATER CO QSC QA 5, % -21.8% % 41 AHLI UNITED BANK BSC BA 5,11.68.% 16.% % 42 COMMERCIAL INTERNATIONAL BANK EG 4, % 1.3% % 43 ALDAR PROPERTIES PJSC AE 4, % -17.1% % 44 MESAIEED PETROCHEMICAL HOLDING CO QA 4, % -18.7% % 45 SAUDI KAYAN PETROCHEMICAL CO SJSC SA 4, % 22.9% % 46 QATAR INSURANCE CO SAQ QA 4, % -28.8% % 47 RABIGH REFINING AND PETROCHEMICAL SA 3, % 4.4% % 48 DAR AL ARKAN REAL ESTATE DEV SA 3, % 114.% % 49 MAKKAH CONSTRUCTION AND DEV SA 3, % -8.5% % 5 ALAWWAL BANK SA 3, % -14.7% % Total MCap; Weighted Avg Div Yield 665, % 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