Weekly Investment Report

Transcription

1 Economic & Market News Reuters: As per the estimates from the credit ratings agency S&P, Global sovereign debt is set to reach a new record high of USD 44 trillion this year despite a slight reduction in governments' annual borrowings. The firm calculated that this year's sovereign borrowing was likely to be USD 6.8 trillion, down around 4% or USD 315 billion on 216's amount and to 9% of global GDP. Absolute debt levels will continue to increase however. S&P projects an almost USD 1 trillion rise to USD 44.3 trillion, is up 2.3% at projected market exchange rates. The United States at USD 2.2 trillion and Japan at over USD 1.8 trillion, will again be the most prolific borrowers this year, accounting for 6% of the total, followed by China, Italy, and France. The agency said using the idea of a calendar gave a perspective of the huge scale of US borrowing, If it were distributed evenly across the year, US issuance would have already covered Switzerland's 217 borrowing needs on Jan. 1; Brazil's on Jan. 3, and Italy's on Feb. 17. With the exception of Japan, it would then have passed China's and also the rest of the world's by Feb 28. Britain's post-brexit double downgrade will mean the percentage of world debt now with a top grade 'triple-a' rating will fall to an all-time low of just 7% down from around 13% a year ago. S&P's calculations also showed Japan faces by far the highest debt rollover ratio this year, reaching a sum equivalent to 66% or two thirds of the size its economy. Japan had the highest debt levels in the world at 254% of GDP in 216, followed by Greece and then Lebanon at 142%. Reuters: Central Bank of Egypt Governor announced that the country's foreign debt is expected to reach 3% of GDP, or USD 6 by June 217. The country has imported some USD 15 billion worth of goods since the pound currency was floated in November. it also predicted that imports would fall 3% this year. Egypt's monthly fuel import bill is around USD 1 billion, but the budget is now getting under control and there are increasing signs of fiscal discipline on the government's part. Al Masah Capital: With further clarification on the long-awaited tax reforms, US markets reached another record high albeit with a modest increase relative to the previous week. Dow Jones ended the week up.98% while S&P5 ended it +.85%. Crude ended the week slightly below the USD56 mark per barrel, sparing its highly correlated regional markets any aggressive downward movements. Regional markets had a mixed performance during the week due to lack of catalysts and profit booking among investors. Egypt came in as the worst performer among its peers going down by 3.3%, with interest hovering around the USD/EGP which is currently in the area after reaching highs of 19 following the devaluation. Saudi Arabia came in second among the losing team with 1.2% decline over the week with negative headlines on the much anticipated Aramco IPO valuation. UAE markets witnessed volatility in the penny/retail space while blue chips took a back seat, Dubai ending the week lower by.46% while Abu Dhabi was up by.22%. Qatar had a modest upward tick of.98% over the week, backed by investors anticipation for a FTSE upgrade. 3 trading days left this coming week for February to close its books. Right now only Abu Dhabi and Qatar are comfortably in the green to ensure a positive month. Dubai, Kuwait and Saudi are straddling the breakeven mark so could easily be negative or positive at the close of the month. Egypt being down 3.6% on the month seems like negative territory is where it might end up unless we get a new wave of buying for the next 3 days Indexes Last WTD (%) MTD (%) YTD (%) Dubai (DFMGI) 3, % -.25% 2.92% Abu Dhabi (ADSMI) 4, % 2.3% 2.35% Saudi (SEIDX) 7, % -.78% -2.28% Kuwait (KWSE) 6, % -.33% 18.47% Egypt (EGX3) 12, % -3.41% -.85% Qatar (DSM) 1, % 3.1% 4.68% Bahrain (BHSEIDX) 1, % 3.5% 1.56% Oman (MSM3) 5, % 1.27% 1.16% TR GCC (Reuters) % 1.77% 5.23% DJ MENA %.81% 6.97% Commodities & FX Last WTD (%) MTD (%) YTD (%) Oil (Brent) %.52% 5.19% Natural Gas % % 12.41% Gold % 3.8% 18.44% Silver % 4.68% 32.68% EURUSD % -2.18% -2.76% GBPUSD % -.89% % USDJPY % -.53% -6.75% USDCHF % 1.83%.55% AUDUSD.77.% 1.13% 5.42% USDCAD %.48% -5.41% Indexes Last WTD (%) MTD (%) YTD (%) DJI 2, % 4.82% 5.36% S&P 5 2, % 3.88% 5.74% NASDAQ 5, % 4.43% 9.86% STOXX Europe % 2.75% 2.38% FTSE 1 7, % 2.4% 1.41% DAX 11,84.3.4% 2.33% 2.81% LIBOR US Dollar WoW (%) Euro WoW (%) 1 Month % % 2 Month % % 3 Month % % 6 Month % % 12 Month % % CAC 4 4, % 2.3% -.35% Nikkei , % 1.27%.89% SENSEX 28, % 4.47% 8.51% Shanghai Composite 3, % 2.98% 4.83% Hang Seng 23, % 2.59% 8.93% 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 Economic & Market News (continued) Zawya: According to the latest report by a data provider STR, average room rates at hotels across the UAE fell 8% in January 217 compared to the same month in 216 to reach AED 712 on the back of strong supply growth in the market, while average occupancy levels across the country rose marginally, by.5%, to reach 81%, as revenues per available room declined by 7.5% to AED 577. Most of the occupancy growth in January occurred in smaller markets like Fujairah (where occupancy was up 7.2%), Ras Al Khaimah (up 1%), and Sharjah (up 5.5%). Meanwhile, the UAE s main markets, Abu Dhabi and Dubai posted a 1.5% decline and nearly flat performance respectively in January. Elsewhere in the Middle East, occupancy rates in Egypt s hotels rose 24% in January to reach 47.5%, while average room rates jumped 93% to reach EGP 1,276 (AED 294). STR analysts noted, however, that the devaluation of the Egyptian pound has significantly inflated figures for room rates. When reported in US dollars, room rates decreased 19%. Demand for hotels in the country increased around 25% in January, which is a jump when compared to a drop in demand by 15% for the full year 216. Reuters: According to the UK Office for National Statistics (ONS), Britain's economy sped up at the end of 216, but over the whole year it was weaker than previously thought and there were signs that the Brexit vote will increasingly act as a brake on growth in 217. GDP rose by.7% in the Q4, faster than the preliminary reading of.6% thanks to manufacturing and the strongest growth since the Q4 of 215. Business investment fell and slowing household spending growth raised questions about the outlook for 217. The ONS also trimmed its estimate for 216 growth to 1.8% from 2.%, due to businesses stockpiling fewer goods and materials in early 216, which pushed Britain's economic growth rate slightly below Germany's 1.9%. Business investment fell 1.% in Q4 compared with the July- September period. The outlook for wages is key for spending by households who have driven Britain's economy since the Brexit vote. Data showed compensation of employees edged up by.1% in the fourth quarter, the weakest rise in more than three years. The Central Bank of England still expected overall economic growth this year of 2.%, much stronger than most economists polled by Reuters expect. Reuters: According to the Saudi Arabia Hotel Construction Overview by Tophotelprojects, Saudi Arabia plans to see a record 68 new hotels and 29,33 hotel rooms open across its major cities in 217. Riyadh, Jeddah, Al-Khobar and Makkah are set to be the Kingdom s busiest areas for hospitality development. Major new hotels forecast to open throughout the Kingdom this year include Assila Hotel Rocco Forte (Q1 217), TIME Qurayyat Hotel (Q2 217), Nobu Hotel Riyadh (Q2 217), Swiss- Belhotel Al Khobar (Q4 217) and the highly-anticipated Abraj Kudai Towers, which will become the world s biggest hotel when it opens its 1, rooms in Q4, 217. The largest hotel in the world, Abraj Kudai, is forecast to open in Makkah, while new brands are entering the market, harnessing the Kingdom s potential at a time of major growth for its tourism, leisure and hospitality industries in the wake of the launch of Saudi Arabia s National Vision 23. Nobu Hospitality and Rocco Forte Hotels are international brands that will enter the Saudi Arabian market for the first time this year. Rocco Forte Hotels Assila Hotel, opening on 12th March 217, is the luxury hotel group s only property in the Middle East. Located in the heart of Jeddah it boasts 147 rooms, 63 suites, and a further 94 residential suites, spread across two large towers. The residences are the first fully serviced residential apartments in Saudi Arabia. 4 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 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 S&P 5 STOXX Europe 6 TR MENA MSCI Asia ex. Japan MENA Market - Price Ratios PE 8.9 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 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/ 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 TAR 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 TA ABU DHABI NATL ENER USD 1/8/ A Abu Dhabi Water & Electricity TA 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 TARI 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/ BBB 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 Year 2 Years 3 Years 4 Years 5 Years 7 Years 1 Years 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 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 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 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 currency; Data as of the previous Thursday) EMIRATES ISLAMIC BANK PJSC %.% 56,473 OMAN INSURANCE COMPANY PSC % 22.86% 794 SHUAA CAPITAL PSC % 19.59% 1,885 ARAMEX PJSC % 14.25% 6,88 DXB ENTERTAINMENTS PJSC % % 9,12 ARABTEC HOLDING PJSC % -27.1% 4,47 DUBAI FINANCIAL MARKET PJSC % 16.% 11,599 EMIRATES NBD BANK PJSC % -1.6% 46,685 DRAKE AND SCULL INTERNATIONAL % 1.46% 1,113 NATIONAL CENTRAL COOLING CO PJSC % -4.98% 1,41 UMM AL IWAIN CEMENT INDUS % 27.78% 417 EMIRATES INSURANCE COMPANY PSC % 15.% 897 COMMERCIAL BANK INTERNATIONAL % -.5% 3,44 ESHRAQ PROPERTIES COMPANY PJSC % 1.58% 2,674 NATIONAL MARINE DREDGING PSC % 16.28% 1,25 ABU DHABI NATIONAL INSURANCE CO % 2.16% 1,162 ABU DHABI NATIONAL FOR BUILDING % % 162 DANA GAS PJSC % % 3,136 ARKAN BUILDING MATERIALS CO PJSC % -4.82% 1,382 AGTHIA GROUP PJSC % % 3,786 (R mln) (R mln) AL JAZIRA MAWTEN REIT %.% AL AHLIA FOR COOPERATIVE INSUR % 11.2% 21 UDI INDUSTRIAL DEVELOPMENT CO % 22.93% 54 NATIONAL INDUSTRIALIZATION CO % 8.31% 12,643 AL RAJHI COMPANY FOR COOP % 32.12% 2,4 JAZAN DEVELOPMENT COMPANY SJSC % 16.22% 645 UDI INDIAN COMPANY FOR COOP % 14.81% 381 LAMA COOPERATIVE INSURANCE % 18.7% 365 GULF UNION COOPERATIVE INSUR % 15.93% 288 UDI REAL ESTATE CO SJSC % % 2,712 (fils) (KWD mln) (fils) (KWD mln) REAL ESTATE ASSET MANAGEMENT % 91.33% 39 JEERAN HOLDING COMPANY KSCP % 48.98% 11 GULF FRANCHISING HOLDING CO % 13.33% 2 AUTOMATED SYSTEMS CO KPSC % 31.15% 24 GULF NORTH AFRICA HOLDING CO % 38.89% 7 KUWAIT CABLE VISION COMPANY % -4.% 1 AL MUDON INTERNATIONAL REAL % 32.47% 5 AL-THEMAR INTERNATIONAL % % 73 COAST INVESTMENT AND DEV % 29.87% 31 FIRST TAKAFUL INSURANCE CO KPSC % 34.69% 7 (EGP mln) (EGP mln) MAR MAR ALAM FOR DEV % 14.63% 71 EGYPTIAN IRON AND STEEL CO E % 11.67% 4,822 EL NASR TRANSFORMERS % 17.97% 262 ALEXANDRIA NATIONAL CO % 2.27% 2 EGYPTIAN CHEMICAL INDUSTRIES E % 56.32% 3,825 EGYPTIAN MODERN EDUCATION % -7.82% 87 AL EZZ DEKHEILA STEEL COMPANY % % 5,439 MISR CEMENT CO E % 7.53% 2,687 PYRAMI HOTELS AND RESORTS E % -1.9% 457 TOURISM URBANIZATION CO E % % 37 (R mln) (R mln) MEDICARE GROUP QSC % 36.72% 2,42 TAR ISLAMIC INSURANCE CO QSC % 33.% 1,1 TAR GENERAL INSURANCE % -8.94% 3,745 TARI INVESTORS GROUP QSC % 1.71% 7,397 TAR NATIONAL BANK Q % 5.% 143,626 TAR ISLAMIC BANK Q % -2.79% 23,866 AL KHALEEJ TAKAFUL GROUP QSC % -5.21% 511 AL KHALIJ COMMERCIAL BANK QSC % -8.82% 5,58 TAR NAVIGATION QSC % -3.66% 1,548 TAR GAS TRANSPORT CO LTD % 2.43% 13,13 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 77, % 6.3% % 2 EMIRATES TELECOMMUNICATIONS GROUP AE 44, % -.3% % 3 TAR NATIONAL BANK Q 39, % 5.% % 4 UDI TELECOM COMPANY SJSC 35, % -9.3% % 5 AL RAJHI BANKING & INVESTMENT CORP 28, % 2.8% % 6 UDI ELECTRICITY CO SJSC 26, % 6.% % 7 NATIONAL COMMERCIAL BANK SJSC 22, % -2.8% % 8 INDUSTRIES TAR QSC 2, % 3.% % 9 DP WORLD LTD AE 17, % 2.2% % 1 FIRST GULF BANK PJSC AE 16, % 6.6% % 11 JABAL OMAR DEVELOPMENT CO SJSC 16, % -11.4% % 12 EMIRATES ISLAMIC BANK PJSC AE 15, %.% % 13 NATIONAL BANK OF ABU DHABI PJSC AE 15, % 5.1% % 14 EMAAR PROPERTIES PJSC AE 14, % 6.5% % 15 ALMARAI CO SJSC 14, % -.4% % 16 NATIONAL BANK OF KUWAIT KP KW 13, % 13.8% % 17 EMIRATES NBD BANK PJSC AE 12, % -1.1% % 18 UDI ARABIAN MINING CO SJSC 12, % 3.6% % 19 EZDAN HOLDING GROUP QSC 11, % 5.6% % 2 MBA FINANCIAL GROUP SJSC 11, % -11.5% % 21 KINGDOM HOLDING CO 11, % -4.2% % 22 KUWAIT FINANCE HOUSE KSCP KW 1, % 14.8% % 23 ABU DHABI COMMERCIAL BANK PJSC AE 1, % 8.7% % 24 OOREDOO QSC 9, % 7.4% % 25 EMAAR MALLS GROUP PJSC AE 9, % -1.1% % 26 UDI BRITISH BANK SJSC 8, % -12.6% % 27 RIYAD BANK SJSC 8, % -6.5% % 28 YANBU NATIONAL PETROCHEMICALS CO 8, % 6.% % 29 MASRAF AL RAYAN QSC 8, % 9.3% % 3 DUBAI ISLAMIC BANK PJSC AE 8, % 11.3% % 31 UDI ARABIA FERTILIZERS CO SJSC 7, % -4.7% % 32 BANQUE UDI FRANSI SJSC 7, % -5.4% % 33 EMIRATES INTEGRATED TELECOMM AE 7, % -4.4% % 34 TAR ELECTRICITY AND WATER CO QSC 6, % 1.8% % 35 MOBILE TELECOMMUNICATIONS CO KW 6, % 17.1% % 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 TAR ISLAMIC BANK Q 6, % -2.8% % 37 ALINMA BANK SJSC 5, % -3.3% % 38 TAR INSURANCE CO Q 5, % -.3% % 39 ARAB NATIONAL BANK 5, % -6.8% % 4 AHLI UNITED BANK BSC BA 5, % 24.2% % 41 COMMERCIAL INTERNATIONAL BANK EG 5, %.8% % 42 VOLA GROUP COMPANY SJSC 5, % -5.5% NULL 2.4.% 43 MEIEED PETROCHEMICAL HOLDING CO 5, % -1.7% % 44 ALDAR PROPERTIES PJSC AE 5, % -7.2% % 45 DAMAC PROPERTIES DUBAI CO PSC AE 4, % 13.4% % 46 ETIHAD ETILAT CO SJSC 4, % -8.8% % 47 EMAAR THE ECONOMIC CITY SJSC 4, % 14.6% % 48 BARWA REAL ESTATE CO QSC 4, % 24.2% % 49 TAR FUEL QSC 4, % 1.8% % 5 DAMAC PROPERTIES DUBAI CO PSC AE 4, % 13.4% % Company Name Total MCap; Weighted Avg Div Yield 669,51 3.4% 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