Weekly Investment Report

Transcription

1 Economic & Market News Reuters: U.S. job growth accelerated in October after hurricane-related disruptions in the prior month, but wages grew at their slowest annual pace in more than 1-1/2 years in a sign that inflation probably will remain benign. Non-farm payrolls increased by 261, last month as 16, leisure and hospitality workers returned to work, according to official data. That was the largest gain since July 216 but below economists expectations for a jump of 31, jobs. Data for September was revised to show a gain of 18, jobs instead of a decline of 33, as previously reported. Average hourly earnings slipped one cent in October, leaving them unchanged in percentage terms, in part due to the return of the lower-paid leisure and hospitality workers. Wages shot up.5% in September. They were up 2.4% on a YoY basis last month, the smallest gain since February 216, after a 2.8% advance in the prior month. October s job growth acceleration reinforced the Federal Reserve s assessment that the labor market has continued to strengthen, and the sluggish wage data did little to change expectations it will raise interest rates in December. Zawya: Saudi Arabia's largest banks reported a drop in loans in the third quarter as credit growth stalled due to a weaker economy, potentially putting future profits at risk. The seven largest banks reported an average drop in loans of around 4.9% at the end of September, compared to the same period of last year. Bank profit growth during the quarter has generally been in line with analysts' forecasts due to widening net interest margins and lower costs. The kingdom's economy has fallen into recession as the oil sector has stagnated and the public sector is hit by austerity policies to curb a state budget in an era of lower oil prices. The sharpest fall in loans and advances during the period was registered by Saudi British Bank, which registered a 7.3% dip from the year earlier period to SAR billion (USD 31 billion) at the end of September. Central bank data shows outstanding bank loans to the private sector in September shrank 1.2% from a year earlier, the seventh straight month of falling bank lending. Banks were also hit by a fall in deposits during the quarter, with Banque Saudi Fransi the only one of the seven largest lenders to post a rise in deposits. Saudi banking deposits have come under strain as the government has drawn down cash parked with banks to help plug its budget deficit. Al Masah Capital: For the second week in a row, tech companies powered US markets with APPLE s stellar earnings driving the markets to another set of all-time highs. The renewed expectations on OPEC extending its production cuts led oil prices to two year highs with crude reaching USD62.7 per barrel and WTI at USD55.64 per barrel. For the regional markets, five out of the eight indices ended the week on a positive note while the remaining three were net losers. Egypt came on top with +2.6% gains over the week on the back of improving economic indicators and a recent IMF declaration that Egypt s economic growth is driven by a broad-based recovery across industries. Oman, Saudi, Bahrain and Qatar each advanced by +1.6%, +.7%, +.4% and +.2% respectively. Kuwait was the worst performer among its peers with a -1.1% losses over the week, followed by UAE markets with Dubai losing -.8% and Abu Dhabi -.1%. Going into the new week, positive news-flow focusing on Emaar Development IPO (which was covered fully on the first day of the offering), and strong oil prices should have a positive effect on trading activities, although the volatile regional geo-political dynamics can always throw up a surprise. Indexes Last WTD (%) MTD (%) YTD (%) Dubai (DFMGI) 3, % -.37% 2.59% Abu Dhabi (ADSMI) 4, % -.32% -1.79% Saudi (SASEIDX) 6, %.32% -3.52% Kuwait (KWSE) 6, %.53% 13.92% Egypt (EGX3) 14, % -.16% 15.99% Qatar (DSM) 8, % -.23% % Bahrain (BHSEIDX) 1, %.48% 5.11% Oman (MSM3) 5, %.59% % TR GCC (Reuters) % -.16% -4.69% DJ MENA %.26% 5.77% Commodities & FX Last WTD (%) MTD (%) YTD (%) Oil (Brent) % 5.13% 62.26% Natural Gas % -3.79% 23.79% Gold % -.4% 2.9% Silver % 3.1% 23.79% EURUSD % -.32% 6.88% GBPUSD % -1.57% % USDJPY %.39% -5.19% USDCHF 1..3%.3% -.13% AUDUSD % -.7% 5.15% USDCAD % -.95% -7.79% Indexes Last WTD (%) MTD (%) YTD (%) DJI 23, %.69% 19.11% S&P 5 2, %.49% 15.59% NASDAQ 6, %.75% 29.44% STOXX Europe %.21% 9.58% FTSE 1 7, %.9% 5.85% DAX 13, % 1.88% 17.4% LIBOR US Dollar WoW (%) Euro WoW (%) 1 Month % % 2 Month % % 3 Month % % 6 Month % % 12 Month % % CAC 4 5, %.27% 13.48% Nikkei , % 2.4% 17.92% SENSEX 33, % 1.42% 26.51% Shanghai Composite 3, % -.64% 8.64% Hang Seng 28, % 1.27% 3.1% 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 Weekly Investment Report Economic & Market News (continued) Zawya: Fitch Ratings confirmed the strength of Saudi Arabia's economy and the effectiveness of economic reforms being carried out by the government of the Kingdom. In addition, Fitch affirmed the Kingdom's strong credit rating at A+ with stable outlook. Fitch said that Saudi Arabia s ratings are "supported by strong fiscal and external balance sheets, including exceptionally high international reserves, low government debt, significant government assets and strong commitment to an ambitious reform agenda." The Fitch report said central government deficit is expected to narrow to 8.7% of GDP in 217, from 17.2% in 216, largely as a result of higher oil prices and because clearance of arrears that widened the 216 deficit by 4.4% of GDP will no longer be necessary. Fitch praised the strength of the Saudi banking system, where it classified the banking sector in the Kingdom as "A", which is a very strong rating with only four countries in the world receiving such higher rating. This in turn reflects the stable profits built on huge capital. The shares for regulatory capital from the first tranche of the sector was 17.2% at the end of June 217. Reuters: Japan s industrial output fell less than expected in September and companies expect output to rise in October, keeping the economy on an expansion path. Labor demand remained at the strongest level in 43 years, but household spending unexpectedly fell in September, raising some concern about the lack of impact a tight jobs market had on consumer spending. The Bank of Japan is expected to signal at a policy meeting that it will hold off on expanding stimulus for the time being, but it may still struggle to explain why economic growth is not pushing up consumer prices. Manufacturers surveyed by the trade ministry expect output to rise 4.7% in October and fall.9% in November. Japan s jobless rate held steady at 2.8% in September, data from the Internal Affairs Ministry showed, matching the median estimate. The jobs-to-applicants ratio also held steady at 1.52 in September from the previous month, showing labor demand remains at the strongest in 43 years. Household spending fell.3% percent in September from a year earlier in price-adjusted real terms, compared with economists median estimate of a.7% annual increase. Economic growth has been slow to translate into higher consumer prices, which is frustrating the BOJ s efforts to reflate the economy. Core consumer prices rose.7% in September from a year ago, well away from the BOJ s 2% inflation target. Zawya: The economy of the UAE will grow at a lower rate this year due to the continuation of lower oil prices, according to IMF, estimating oil prices to average USD 53 per barrel in the coming two-to-three years. The economies of the six GCC countries that include Saudi Arabia and the UAE, the Middle East s two biggest economies, have been badly impacted by the steep decline in oil prices which began in 214. The prices of the important commodity almost halved between June and December 214, but have been on a slow recovery path since the start of last year. For the UAE in general, growth in 217 is expected to be at 1.3% and next year 3.4%. Abu Dhabi s economy is expected to grow by only.3% this year, down from a growth rate of 2.8% in 216, which is mainly due to the fact that its oil-based GDP is predicted to contract by 2.7% this year. However, IMF said the emirate s economy is forecasted to grow by 3.2% in 218. The non-oil sector in Abu Dhabi and Dubai is almost growing at the same speed, around 3%. Abu Dhabi, because of the size of the oil sector and the oil sector because of the OPEC-led agreement to reduce production and exports, went down this year. But it will recover next year. 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-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 Mar-17 May-17 Jul-17 Sep-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/ 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 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/ 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/ 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 Weekly Investment Report 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 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 Weekly Investment Report Top Weekly Performers by Country ( indicates native currency; Data as of the previous Thursday) SHUAA CAPITAL PSC % % 1,235 EMIRATES ISLAMIC BANK PJSC %.% 38,13 EMIRATES NBD BANK PJSC % -1.65% 46,46 AIR ARABIA PJSC % -5.26% 5,88 COMMERCIAL BANK OF DUBAI PSC % -24.4% 11,7 MASHREQBANK PSC % 4.84% 11,539 TAKAFUL EMARAT INSURANCE PJSC % % 279 DRAKE AND SCULL INTERNATIONAL % 3.65% 2,131 UNION PROPERTIES PJSC % % 3,89 AMLAK FINANCE PJSC % -12.7% 1,65 NATIONAL BANK OF FUJAIRAH PJSC %.% 6,286 AXA GREEN CRESCENT INSURANCE CO % 11.43% 156 ABU DHABI NATIONAL HOTELS CO % -6.94% 2,95 RAS AL KHAIMAH POULTRY % -1.45% 294 ABU DHABI AVIATION %.% 1,334 ABU DHABI SHIP BUILDING PJSC % -25.8% 445 RAS AL KHAIMAH FOR WHITE CEMENT % -18.7% 5 FOODCO HOLDING PJSC % -6.52% 43 COMMERCIAL BANK INTERNATIONAL %.% 1,338 GULF PHARMACEUTICAL INDUSTRIES % 9.65% 2,598 (SAR mln) (SAR mln) ARABIAN SHIELD COOPERATIVE INSUR % 4.96% 846 AL KATHIRI HOLDING CO %.% 47 RED SEA INTERNATIONAL CO % -3.85% 1,224 AMANA COOPERATIVE INSURANCE CO % 34.62% 364 WALAA COOPERATIVE INSURANCE CO % 36.83% 1,226 RAYDAN COMPANY CJSC %.% 45 TRADE UNION COOPERATIVE INSUR % 21.75% 574 ABDULLAH SAAD MOHAMMED ABO %.% 179 YANBU CEMENT COMPAY SJSC % % 4,166 TAKWEEN ADVANCED INDUSTRIES % % 943 (fils) (KWD mln) (fils) (KWD mln) AFAQ EDUCATIONAL SERVICES CO % % 6 AMWAL INTERNATIONAL INVEST % 61.25% 7 AJIAL REAL ESTATE ENTERTAINMENT % 6.11% 36 NAFAIS HOLDING COMPANY KSCP % -3.9% 6 FIRST TAKAFUL INSURANCE CO KPSC % 42.65% 7 KUWAIT CABLE VISION COMPANY % % 1 WARBA INSURANCE COMPANY KSCP % % 12 NATIONAL RANGES CO KPSC % % 6 WETHAQ TAKAFUL INSURANCE CO % 22.58% 4 AL MAL INVESTMENT COMPANY KPSC % % 9 (EGP mln) (EGP mln) OCTOBER PHARMA FOR PHARMA %.% 418 NATIONAL COMPANY FOR HOUSING % % 55 EL SHAMS HOUSING AND URBAN % 97.73% 737 ARAB CO FOR LAND RECLAMATION % 54.5% 5 MISR KUWAIT INVESTMENT % 5.88% 18 MINAPHARM PHARMACEUTICALS SAE % -4.48% 829 NOZHA INTERNATIONAL HOSPITAL % 9.17% 51 REACAP FINANCIAL INVESTMENTS SAE % 63.67% 521 EL SHAMS PYRAMIDS CO FOR HOTELS % -9.98% 136 GRAND CAPITAL FOR FINANCIAL % -5.53% 35 (QAR mln) AAMAL CO QPSC % % 4,768 QATAR NATIONAL CEMENT CO QSC % % 4,154 EZDAN HOLDING GROUP QSC % % 25,427 OOREDOO QSC % % 28,379 QATAR INSURANCE CO SAQ % % 12,592 SALAM INTERNATIONAL INVESTMENT % % 87 AL KHALEEJ TAKAFUL GROUP QPSC % -48.1% 283 INVESTMENT HOLDING GROUP %.% 549 QATAR FUEL CO QSC % -31.3% 9,23 QATARI GERMAN COMPANY % -34.6% 78 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 SAUDI BASIC INDUSTRIES CORPORATION SA 79, % 8.6% % 2 EMIRATES TELECOMMUNICATIONS GROUP AE 42, % -5.3% % 3 SAUDI TELECOM COMPANY SJSC SA 35, % -7.2% % 4 FIRST ABU DHABI BANK PJSC AE 3, % 3.1% % 5 QATAR NATIONAL BANK QPSC QA 29, % -18.2% % 6 AL RAJHI BANKING & INVESTMENT CORP SA 28, % 2.7% % 7 SAUDI ELECTRICITY COMPANY SJSC SA 26, % 8.% % 8 NATIONAL COMMERCIAL BANK SJSC SA 25, % 13.6% % 9 DP WORLD LTD AE 2, % 38.5% % 1 EMAAR PROPERTIES PJSC AE 16, % 16.5% % 11 SAUDI ARABIAN MINING CO SJSC SA 15, % 3.5% % 12 INDUSTRIES QATAR QSC QA 15, % -18.5% % 13 JABAL OMAR DEVELOPMENT CO SJSC SA 15, % -17.7% % 14 NATIONAL BANK OF KUWAIT SAKP KW 14, % 23.1% % 15 ALMARAI CO SJSC SA 14, % -.2% % 16 EMIRATES NBD BANK PJSC AE 12, % -1.6% % 17 SAMBA FINANCIAL GROUP SJSC SA 11, % -8.% % 18 KUWAIT FINANCE HOUSE KSCP KW 11, % 18.8% % 19 ABU DHABI COMMERCIAL BANK PJSC AE 1, % 7.2% % 2 EMIRATES ISLAMIC BANK PJSC AE 1, %.% % 21 KINGDOM HOLDING CO SA 1, % -14.% % 22 SAUDI BRITISH BANK SJSC SA 9, % -2.8% % 23 RIYAD BANK SJSC SA 9, % 2.5% % 24 BANQUE SAUDI FRANSI SJSC SA 9, % 1.2% % 25 YANBU NATIONAL PETROCHEMICALS CO SA 8, % 3.3% % 26 DUBAI ISLAMIC BANK PJSC AE 8, % 9.2% % 27 EMAAR MALLS PJSC AE 8, % -12.2% % 28 OOREDOO QSC QA 7, % -13.8% % 29 ALINMA BANK SJSC SA 7, % 16.6% % 3 MASRAF AL RAYAN QPSC QA 6, % -6.3% % 31 MOBILE TELECOMMUNICATIONS CO KW 6, % 17.1% % 32 EMIRATES INTEGRATED TELECOMM AE 6, %.% % 33 EZDAN HOLDING GROUP QSC QA 6, % -37.1% % 34 DAMAC PROPERTIES DUBAI CO PSC AE 6, % 54.2% % 35 SAUDI ARABIA FERTILIZERS CO SJSC SA 6, % -22.9% % 6

7 Top 5 MENA Stocks by Market Capitalization Continued ( indicates native currency; Latest data) Company Name Country Market Cap (USD mln) MTD % YTD % 52w High 52w Low P/E P/B Dividend Yield 36 ARAB NATIONAL BANK SA 6, % 7.4% % 37 QATAR ISLAMIC BANK QPSC QA 6,7 97..% -6.6% % 38 SAVOLA GROUP COMPANY SJSC SA 5, % -1.5% % 39 QATAR ELECTRICITY AND WATER CO QSC QA 5, % -2.3% % 4 COMMERCIAL INTERNATIONAL BANK EGP EG 5, % 6.9% % 41 AHLI UNITED BANK BSC BA 5, % 16.9% % 42 ALDAR PROPERTIES PJSC AE 5, % -11.% % 43 MESAIEED PETROCHEMICAL HOLDING CO QA 4, % -21.% % 44 SAUDI KAYAN PETROCHEMICAL CO SJSC SA 3, % 4.4% % 45 ALAWWAL BANK SA 3, % -18.% % 46 AGILITY PUBLIC WAREHOUSING CO KSCP KW 3, % 37.3% % 47 JARIR MARKETING CO SJSC SA 3, % 22.2% % 48 RABIGH REFINING AND PETROCHEMICAL SA 3, % 21.9% % 49 QATAR INSURANCE CO SAQ QA 3, % -39.% % 5 BOUBYAN BANK KSCP KW 3, % 16.7% % Total MCap; Weighted Avg Div Yield 651, % 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