Weekly Investment Report

Transcription

1 Economic & Market News Reuters: The US economy added only 156, jobs in September, the US Department of Labor announced, a figure likely to be seized on as the presidential race enters its final stretch. The unemployment rate was 5%, up from 4.9% in August. Economists had expected job growth of 175, and the unemployment rate to remain unchanged at 4.9%. Job growth has slowed down this year, with the number of jobs added averaging about 178, jobs a month. In 215, on average about 229, jobs were added each month. The report comes after a report released earlier this week by the payroll company ADP found that private companies added just 154, jobs last month. This was slowest job growth reported by ADP since April. Yet even as job growth has slowed down, the number of people applying for unemployment insurance has dropped below 25, for the second time this year. Last week, 249, people applied for unemployment benefits. The number of people currently receiving unemployment benefits is just a little over 2 million, levels last seen in 2. Reuters: The World Bank Group has raised its forecast for Egypt s growth this year to 3.8%, according to the bank s latest report. The World Bank now expects Egypt to grow to 3.8 percent this year, a slight upgrade from the 3.3 percent it forecast in earlier report. The economic growth will be pushed by the recovery in local demand as consumption remains strong, but imports is still challenged by the scarcity of foreign exchange and an overvalued pound, the bank added. According to the report, World Bank expects a steady growth for the Egyptian economy on the medium run, as the government continues its economic recovery plan and the reduction of the budget deficit. The World Bank also said that the rise in energy prices and the new value added tax could plunge the inflation on the short run, leaving a negative effect on low and middle-income families. AL Masah Capital: After the major OPEC news last week, oil reacted positively and broke the USD 52 mark, however over the weekend, with news coming from Russia that there won t be any deals with OPEC in its upcoming meeting in Istanbul, oil shied back to trade below USD 5. Global markets also responded negatively to the news and closed lower Friday. Despite the high correlation between oil prices and regional markets, most of the regional markets didn t follow the same path as oil. Negative sentiment among investors regarding macroeconomic conditions is drowning out any positive from the oil rise so most of the regional indices ended the week in the red. U Markets were the worst performers among their peers - Dubai ended the week lower by 3.45%, followed by Abu Dhabi by %. On the other hand, Egypt led the winners over the week, going up by 6.18%, as investors increasingly believe devaluation is around the corner. Saudi Arabia also ended the week with a modest increase of.14% with investors buying dips, on a hope to make capital gains once the market follows the upward trend of oil which it usually does. In the coming week oil prices and macro news will remain the main drivers for regional markets movements as investors either position themselves for a year-end rally or move to the sidelines and stay in cash. Indexes Last WTD (%) MTD (%) YTD (%) Dubai (DFMGI) 3, % -3.45% 6.46% Abu Dhabi (ADSMI) 4, % -1.94% 1.91% Saudi (SEIDX) 5, %.14% % Kuwait (KWSE) 5, % -1.45% -5.25% Egypt (EGX3) 8, % 6.18% 19.45% Qatar (DSM) 1, % -.75% -.69% Bahrain (BHSEIDX) 1, % -1.13% -6.48% Oman (MSM3) 5, % -2.3% 3.77% TR GCC (Reuters) %.% 1.58% DJ MENA % -3.39% -7.17% Indexes Last WTD (%) MTD (%) YTD (%) DJI 18, % -.22% 4.84% S&P 5 2, % -.35% 5.72% NASDAQ 4, % -.4% 6.11% STOXX Europe % -.3% -6.28% FTSE 1 6, % 1.46% 12.14% DAX 1, %.55% -1.62% Commodities & FX Last WTD (%) MTD (%) YTD (%) Oil (Brent) % 11.99% 41.31% Natural Gas % 5.51% 3.34% Gold % -4.6% 18.32% Silver % -6.79% 25.42% EURUSD % -.24% 2.48% GBPUSD % -5.39% % USDJPY %.35% % USDCHF.98 1.% -.25% -2.7% AUDUSD %.72% 4.3% USDCAD % 1.15% -4.22% LIBOR US Dollar WoW (%) Euro WoW (%) 1 Month % % 2 Month % % 3 Month % % 6 Month % % 12 Month % % CAC 4 4, %.72% -3.38% Nikkei , % 2.73% % SENSEX 28, %.86% 7.61% Shanghai Composite 3, % -2.62% -15.1% Hang Seng 23, % 2.81% 9.3% 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 Economic & Market News (continued) Zawya : S&P s has affirmed an A-/A-2 rating for Saudi Arabia and maintains that the outlook for the Kingdom is stable. The outlook for Saudi Arabia is based on an expectation that the authorities will take action in order to prevent any deterioration in its fiscal position beyond our current expectations, over the next two years, S&P said in a statement. S&P believes the Saudi balance sheet will remain strong between 216 and 219, despite the sharp fall in oil prices in recent times. The rating agency asserted that Saudi Arabia a outlook could have been more positive if it weren t constrained by limited public sector transparency and lower GDP per capita in comparison to similar states. It predicts that the average annual rate change in government debt over will level out at around 5% of GDP. Reuters: According to IMF, gross debt in the non-financial sector has more than doubled in nominal terms since the turn of the century, reaching USD 152 trillion in 215, and continues to rise. The figure includes debt held by governments, non-financial firms and households. Current debt levels now sit at a record 225% of world gross domestic product (GDP), where about two-thirds of the liabilities reside in the private sector. The rest of it is public debt, which has increased to 85% of GDP in 215 from below 7%. However, the slow global growth makes it difficult to pay off the obligations, setting the stage for a vicious feedback loop in which lower growth hampers deleveraging and the debt overhang exacerbates the slowdown. Excessive private debt is a major headwind against the global recovery and a risk to financial stability. The massive debt load complicates the task for global policy makers, who have been urged to use fiscal policy to boost growth amid the waning ability of central banks to stimulate the economy. Meanwhile, low interest rates drove a surge in corporate debt in emerging markets. Levels of private debt are now high in both advanced nations and a few large emerging markets such as China and Brazil that are considered systemically important to the global financial system. Zawya: Qatar is expected to introduce value added tax (VAT) between January 218 to 219. VAT, although expected for quite some time, will finally be introduced at an expected 5% rate in both the U and Kuwait effective January 1, 218, with Bahrain, Oman, Qatar and Saudi Arabia obliged to introduce the tax between then and January 1, 219. Despite of a very limited official information released regarding the specifics of how the VAT system to be introduced will operate, expectations are that the GCC Countries might replicate a lot of the features of the European Union VAT System, particularly bearing in mind the similarity between the GCC and EU countries. Certain educational and healthcare services will be purely exempt from VAT with no entitlement to VAT recovery on costs by the related service provider, the provision of basic foodstuff will be zero-rated (exempt with credit, thus enabling the suppliers of basic foodstuffs to recover VAT on their operating costs etc.). 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 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 U - Emirate of Dubai DUBAI DOF SUKUK LTD USD 2/5/ U - 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/ U - 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 ROSPACE 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 U 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) DUBAI INSURANCE CO PSC % -.8% 248 MARKA PJSC % -3.33% 58 NATIONAL CENTRAL COOLING CO PJSC % 51.67% 1,344 DUBAI ISLAMIC INSUR & REINSUR % -.73% 122 DRAKE AND SCULL INTERNATIONAL % 9.13% 1,37 DAR AL TAKAFUL PJSC % 125.6% 95 DUBAI FINANCIAL MARKET PJSC % -.81% 9,76 GULF GENERAL INVESTMENT CO PSC % % 878 ABU DHABI NATIONAL INSURANCE CO % % 94 DANA GAS PJSC % 9.8% 3,92 ABU DHABI NATIONAL FOR BUILDING % 24.44% 168 GULF PHARMACEUTICAL INDUSTRIES % -8.9% 2,391 NATIONAL MARINE DREDGING PSC % % 1,175 NATIONAL CORP FOR TOURISM AND % -1.3% 1,865 GULF MEDICAL PROJECTS CO PSC %.% 1,747 NATIONAL BANK OF RAS AL KHAIMAH % -18.4% 8,549 METHAQ TAKAFUL INSURANCE CO % 36.67% 123 ABU DHABI AVIATION % -8.33% 1,223 (R mln) (R mln) BURUJ COOPERATIVE INSURANCE CO %.28% 45 FAWAZ ABDULAZIZ ALHOKAIR CO SJSC % % 5,228 TAKWEEN ADVANCED INDUSTRIES % % 1,273 UDI KAYAN PETROCHEMICAL CO % -1.29% 9,148 ARABIAN PIPES CO SJSC % 6.69% 574 YANBU NATIONAL PETROCHEMICALS % 46.77% 26,826 UDI ENAYA COOPERATIVE INSUR % % 25 SOLIDARITY UDI TAKAFUL CO JSC % -22.3% 319 LAMA COOPERATIVE INSURANCE % % 229 MALATH COOPERATIVE INSURANCE % % 235 (fils) (KWD mln) (fils) (KWD mln) FUTURE COMMUNICATIONS CO KPSC % -5.56% 8 KUWAIT AND GULF LINK TRANSPORT % 1.59% 12 TIJARA & REALESTATE INVESTMENT % -7.16% 15 NATIONAL CLEANING CO KSCP % -2.5% 1 KUWAIT REAL ESTATE HOLDING CO % % 4 AL MAKEN INTERNATIONAL REAL % -62.5% 4 AL-LAM GROUP HOLDING CO KSCP % 17.14% 11 IFA HOTELS AND RESORTS CO KSCP % % 17 AL FAT ENERGY HOLDING CO KPSC % -17.9% 6 AL-ARABIYA REAL ESTATE CO KSCP % -3.45% 14 (EGP mln) (EGP mln) ORIENTAL WEAVERS CARPET CO E % 13.4% 4,19 DELTA SUGAR CO E % 11.45% 1,55 SIXTH OF OCTOBER DEVELOPMENT % 43.82% 4,616 JUHAYNA FOOD INDUSTRIES E % % 4,293 EFG HERMES HOLDINGS E % 56.19% 8,461 VODAFONE EGYPT TELECOMMUNICA % 86.3% UNIVERL CO FOR PACKAGING % 27.6% 72 NATIONAL COMPANY FOR HOUSING % 18.63% 211 ARAB CO FOR LAND RECLAMATION % % 3 ALEXANDRIA CONTAINER AND CARGO % 53.78% 11,73 (QAR mln) (QAR mln) AL KHALIJ COMMERCIAL BANK QSC % 1.% 6,534 QATAR ISLAMIC INSURANCE CO QSC % % 822 ALIJARAH HOLDING CO QSC % 22.7% 856 GULF INTERNATIONAL SERVICES QSC % % 6,569 ZAD HOLDING CO Q % -7.78% 1,685 AL KHALEEJ TAKAFUL GROUP QSC % -25.7% 578 UNITED DEVELOPMENT CO PSC % -4.82% 6,993 DLALA BROKERAGE AND INVESTMENT % 24.93% 656 QATAR NAVIGATION QSC % -7.79% 1,32 QATAR INSURANCE CO Q % 24.99% 2,954 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 66, % 9.1% % 2 EMIRATES TELECOMMUNICATIONS GROUP 47, % 23.9% % 3 QATAR NATIONAL BANK Q QA 35, % 5.7% % 4 UDI TELECOM CO SJSC 28, % -2.9% % 5 AL RAJHI BANKING & INVESTMENT CORP 22, % -.5% % 6 UDI ELECTRICITY CO SJSC 18, % 7.9% % 7 NATIONAL COMMERCIAL BANK SJSC 18, % -31.2% % 8 INDUSTRIES QATAR QSC QA 17, % -4.3% % 9 DP WORLD LTD 15, % -6.9% % 1 FIRST GULF BANK PJSC 13, % -1.7% % 11 EMAAR PROPERTIES PJSC 13, % 21.3% % 12 JABAL OMAR DEVELOPMENT CO SJSC 12, % -6.8% % 13 EZDAN HOLDING GROUP QSC QA 12, % 6.9% % 14 NATIONAL BANK OF ABU DHABI PJSC 12, % 9.3% % 15 EMIRATES NBD BANK PJSC 12, % 9.5% % 16 ALMARAI CO SJSC 11, % -7.6% % 17 NATIONAL BANK OF KUWAIT KP KW 11, % -2.7% % 18 KINGDOM HOLDING CO 1, % -33.8% % 19 UDI ARABIAN MINING CO SJSC 9, % -4.8% % 2 ABU DHABI COMMERCIAL BANK PJSC 9, % -3.2% % 21 MBA FINANCIAL GROUP SJSC 9, % -24.4% % 22 EMAAR MALLS GROUP PJSC 9, % -5.8% % 23 OOREDOO QSC QA 8, % 25.6% % 24 KUWAIT FINANCE HOUSE KSCP KW 8, % -5.3% % 25 RIYAD BANK SJSC 7, % -19.8% % 26 EMIRATES INTEGRATED TELECOMM 7, % 23.5% % 27 UDI BRITISH BANK SJSC 7, % -24.4% % 28 MASRAF AL RAYAN QSC QA 7, % -6.6% % 29 UDI ARABIA FERTILIZERS CO SJSC 7, % -21.8% % 3 YANBU NATIONAL PETROCHEMICALS CO 7, % 46.8% % 31 DUBAI ISLAMIC BANK PJSC 6, % -8.7% % 32 COMMERCIAL INTL. BANK EGYPT E EG 6, % 36.3% % 33 QATAR ISLAMIC BANK Q QA 6, % -3.5% % 34 BANQUE UDI FRANSI SJSC 6, % -27.7% % 35 QATAR ELECTRICITY AND WATER CO QSC QA 6, % -.6% % 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 MEIEED PETROCHEMICAL HOLDING CO QA 5, % -11.7% % 37 QATAR INSURANCE CO Q QA 5, % 25.% % 38 ALDAR PROPERTIES PJSC 5, % 12.9% % 39 ORASCOM CONSTRUCTION INDUSTRIES EG 5, % -9.4% % 4 MOBILE TELECOMMUNICATIONS CO KW 4, % -4.3% % 41 ALINMA BANK SJSC 4, % -22.7% % 42 AHLI UNITED BANK BSC BA 4, % -4.1% % 43 VOLA GROUP CO SJSC 4, % -39.8% % 44 COMMERCIAL BANK OF DUBAI PSC 4, % -12.9% % 45 ETIHAD ETILAT CO SJSC 4, % -3.1% % 46 ARAB NATIONAL BANK 4, % -36.2% % 47 DAMAC PROPERTIES DUBAI CO PSC 4, % 5.2% % 48 MAKKAH CONSTRUCTION AND DEV. 3, % -6.5% % 49 QATAR FUEL QSC QA 3, % 8.4% % 5 DAMAC PROPERTIES DUBAI CO PSC 4, % 5.2% % Company Name Total MCap; Weighted Avg Div Yield 582, % 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