IS Morning Report Monday, February 05, 2018

Transcription

1 Global & Regional Benchmarks UAE Trading Summary Indices Close 1Day 1Mnth 3Mnth YTD 1Y (AEDm) BUY SELL NET ADX 4, % 3.2% 3.0% 4.2% 2.1% ADX DFM 3, % -0.7% -5.6% 0.5% -7.2% Local 52% 53% -1% TASI 7, % 6.1% 9.0% 5.3% 8.0% Foreign 48% 47% 1% KWSEI 6, % 3.4% 3.1% 4.1% -0.2% Institutional 46% 56% -9% EGX 14, % 0.6% 4.9% -1.0% 15.5% Retail 54% 44% 9% Dow Jones 25, % 0.9% 8.4% 3.2% 27.2% DFM S&P 500 2, % 0.7% 6.7% 3.3% 20.2% Local 57% 41% 16% Nasdaq 7, % 1.5% 7.0% 4.9% 27.8% Foreign 43% 59% -16% FTSE 100 7, % -3.6% -1.5% -3.2% 3.5% Institutional 31% 40% -8% DAX 12, % -4.0% -5.1% -1.0% 9.7% Retail 69% 60% 8% CAC40 5, % -1.9% -2.8% 1.0% 11.2% Total Nikkei225 22, % -4.1% 0.9% -0.1% 20.3% Local 56% 44% 12% HIS 32, % 3.9% 12.0% 7.0% 38.5% Foreign 44% 56% -12% Upcoming Corporate Actions & Events Date Company Event 6-Feb RAK Ceramics Board Meeting 7-Feb SHUAA Capital Board Meeting 7-Feb TAQA Board Meeting 7-Feb Dubai Insurance BOD Meeting 8-Feb Fujairah Cement BOD Meeting 11-Feb Gulf Nav Rights subscription opening date Key Stories Dubai International Airport said it kept its place as the world's busiest for international passengers in 2017 even as passenger traffic grew at its slowest pace in at least nine years. Etihad Airways is pulling five Boeing LR passenger jets from its fleet after US routes cut

2 Al Khaleej Sugar Refinery has agreed to build a major agro-industrial complex to produce beet sugar in Egypt Commercial bank international reports FY net profit AED175 mln vs AED125 mln dirhams year ago. FY net interest income AED556 mln dirhams, up 10 pct year-on-year. Capital adequacy ratio stand at 14.8 pct vs 14.4 pct year ago. UAE private sector strong in January despite new tax PMI. Emirates NBD UAE PMI slips to 56.8 in January from 57.7 in December. Dubai's Noor Bank CEO Says Weighing Sale of Islamic Bonds. Dubai Shipper Gulf Navigation Seeks Acquisitions on Oil Gain. ARMX announced resignation of BOD member (Mr. Hussen Hachem). Kuwait's Burgan Bank Is Said to Weigh Bond Sale in First Half. Saudi Arabia s Nov. Trade Surplus at SAR40.909B. Egypt s foreign reserves rose to $ billion at the end of January from $ billion at the end of December Global Markets Wrap: Asian shares fell the most in over a year on Monday as fears of resurgent inflation battered bonds, toppled Wall Street from record highs and sparked speculation that central banks globally might be forced to tighten policy more aggressively. Yields on 10-year U.S. Treasury paper US10YT=RR were up at a four-year peak of 2.86 percent, having jumped almost 7 basis points on Friday. The 2-year yield US2YT=RR was near a nine-year top at percent, tightening financial conditions and offering a more competitive return compared to equities. The dividend return of the Dow, for instance, was 2.13 percent.

3 Oil prices on Monday extended declines from the end of last week amid a wider market sell off and a stronger dollar, with Brent crude falling to its lowest in nearly a month. Other markets dropped as investors were spooked by Friday's payrolls report from the United States, which showed wages growing at their fastest pace in more than 8-1/2 years, fuelling inflation expectations USIL5YF5Y=R. Iran Can Boost Output Fast If OPEC Ends Cuts, Oil Minister Says Iran can swiftly increase production of crude if OPEC decides to scrap limits on global output when the group meets next in June, Oil Minister Bijan Namdar Zanganeh said. The Persian Gulf nation can raise daily production by at least 100,000 barrels within five or six days if the Organization of Petroleum Exporting Countries decides that crude prices are high enough to justify abandoning its oil-cuts accord with other producers. UAE: Abu Dhabi-owned Etihad Airways is pulling five Boeing BA.N LR passenger jets from its fleet after deciding last year to drop some flights that the aircraft were used on, according to the airline and sources. An Etihad spokesman said it was phasing out the long-range jets as part of its fleet renewal process. The airline has over a hundred aircraft on order to be delivered over the next seven years, mostly wide-body jets. Five sources said the LRs were deemed surplus following a decision last year to reduce flights to the United States, and might be sold.

4 Dubai-based private equity firm Abraaj Group has hired global auditing firm KPMG to look into the finances of its healthcare fund after a reported dispute with some its investors in the fund. "We are confident that the exercise being conducted by KPMG will confirm that all the funds were accounted for and used appropriately," it said in a statement on Sunday. The Wall Street Journal reported on Friday, citing unnamed sources, that four investors in a $1 billion healthcare fund managed by Abraaj had hired a forensic accountant to examine what happened to some of their money. They wanted to know why some of their money had not yet been used for the stated purpose of building hospitals and clinics, it reported. The New York Times also reported the dispute. The investors included the Bill & Melinda Gates Foundation, the World Bank's International Finance Corp unit, and two other investors, who pledged about a quarter of the fund's money. Dubai's Al Khaleej Sugar Refinery has agreed to build a major agro-industrial complex to produce beet sugar under a deal signed with the Egyptian government, the world's largest port-based sugar refinery said on Sunday. The project, named Al Canal Sugar, will be located only about 200 km (125 miles) from its market, Jamal al-ghurair, managing director of the refinery, told an industry conference in Dubai. Investment Minister Sahar Nasr said the project, with a cost of around $1 billion, would produce 900,000 tonnes of sugar annually, filling a supply gap in the market and making Egypt self-sufficient in sugar. The Vice President, Prime Minister and Ruler of Dubai, His Highness Sheikh Mohammed bin Rashid Al Maktoum, has approved the construction of 7,200 housing units for Emiratis across different parts of the UAE at a total cost of AED7.2 billion to be delivered up until Dubai International Airport said it kept its place as the world's busiest for international passengers in 2017 even as passenger traffic grew at its slowest pace in at least nine years. Annual traffic increased 5.5 percent to 88.2 million passengers, compared to 83.6 million in the previous year, operator Dubai Airports said in a statement on Monday. It was the airport's slowest growth rate since at least 2009, according to Reuters calculations. The operator forecast a year ago a slightly higher passenger figure of 89 million. Commercial bank international reports FY net profit AED175 mln vs AED125 mln dirhams year ago. FY net interest income AED556 mln dirhams, up 10 pct year-on-year. Capital adequacy ratio stand at 14.8 pct vs 14.4 pct year ago. Growth of the United Arab Emirates' non-oil private sector was strong in January despite the introduction of a 5 percent value-added tax during that month, which raised costs and may have hit consumption, a survey showed on Monday. The seasonally adjusted Emirates NBD UAE Purchasing Managers' Index, which covers manufacturing and services, fell to 56.8 last month from 57.7 in December, which was a 34- month high. The index remained high by standards of the last few years; above 50 indicates expansion and below shows contraction. Dubai Holding's CEO Steps Down From $35 Billion Investment Firm. Edris Alrafi, the chief executive officer of Dubai Holding LLC, has departed less than a year after taking helm of the investment company owned by the emirate s ruler.alrafi stepped down and will be replaced by Amit Kaushal, who is currently the firm s chief financial officer, a representative for Dubai Holding said in an statement, without providing reasons for Alrafi s departure. It wasn t immediately clear who would replace Kaushal as the firm s CFO.Dubai Holding, which owns Dubai Properties Group LLC and hotel operator Jumeirah Group LLC, is one of three main state holding companies with about $35 billion of assets, according to its website. During the boom years, government entities amassed overseas assets such as luxury retailer Barneys New

5 York Inc. and U.S. hotel and casino group MGM Resorts International. Many assets were then sold during the financial crisis. Alrafi, formerly chief commercial officer at government-backed property developer Meraas Holding LLC, was appointed as CEO at Dubai Holding in April, replacing Fadel Al Ali. Abu Dhabi Islamic Bank Full-Year Net Income Climbs 17.7%. Abu Dhabi Islamic Bank 2017 profit rises 17.7% to 2.3 billion dirhams from year ago, according to an ed statement. Profit driven by higher income from fees, foreign exchange, investments and reduction in cost of credit, Revenue increased 4.6% to 5.6 billion dirhams, Bank also benefited from lower credit provisions and impairments, Impairments million dirhams vs 970 million, Capital adequacy ratio under Basel III at 17.02% at end Dec.Acting CEO Khamis Buharoon says "well positioned to take advantage of the opportunities that are expected to arise from the positive economic outlook of the U.A.E." Board recommends distribution of 28.87% cash dividend for Dubai s Noor Bank PJSC is considering the sale of Islamic bonds as the Shariah-compliant lender seeks long-term funding, its chief executive officer said. It is not a bad time to consider going to the market, John Iossifidis said in an interview in Dubai. It s prudent to extend the maturity of your funding for a number of reasons, not the least of which is spreads being quite low right now ARMX announced resignation of BOD member (Mr. Hussen Hachem). Dubai Shipper Gulf Navigation Seeks Acquisitions on Oil Gain. Gulf Navigation Holding PJSC is seeking to buy companies and vessels with cash from a share sale as the Dubai-based shipowner aims to capitalize on increased oil products trade and higher prices for the commodity, its chief executive officer said. We are looking at a number of potentials -- part of them is outright acquisitions and part of them is partial acquisitions, Khamis Juma Buamim said. ADCB gets in-principle approval from financial services regulatory authority to establish wholly owned unit in ADGM to hold prudential category 3C license GCC: Saudi Arabian Mining Co., which runs ventures with companies such as Alcoa Corp. and Barrick Gold Corp., said its outlook for 2018 is more positive than a year ago amid a rise in metals prices. Our belief in the long-term fundamentals of our core products remains and the outlook is now more positive than a year ago, the company also known as Maaden said in a presentation to investors showed signs of recovery and we are optimistic that this can be sustained. Bank Al-Jazira reported net income for the fourth quarter of 194 million riyals. 4Q operating income 648 million riyals, Says profit increase due to rise in net special commission income and net exchange income, Bank Al-Jazira Fourth Quarter Net Income 194 Mln Riyals, Kuwait s Burgan Bank SAK is considering the sale of a U.S. dollar or dinar bond in the first half, according to two people with knowledge of the matter. The lender is in talks with local and international banks over the pricing, the people said, asking not to be identified because the discussions are private. Burgan Bank hasn t sent a formal request for proposals, they said. Saudi Arabia s Nov. Trade Surplus at SAR40.909B, The General Authority for Statistics in Riyadh reports foreign merchandise trade data for November on website. Oct. trade surplus was b riyals Nov. oil

6 exports 61.7b riyals vs 58.9b in previous month; +33.5% y/y Nov. non-oil exports 18b riyals vs 17.9b in previous month, +18.2% y/y Nov. merchandise imports 38.8b riyals vs 43.9b in previous month; -9.4% y/y Egypt: Average yields on Egypt's three- and nine-month treasury bills fell at an auction on Sunday, central bank data showed. Yields on the 91-day bills dipped to percent from percent at the last similar sale, and yields on 273-day bills fell to percent from percent. Egypt's foreign reserves registered in January the biggest month-on-month jump since July last year as the country pushed forward with economic reforms aimed at boosting growth. Foreign reserves rose to $ billion at the end of January from $ billion at the end of December, the central bank said on Sunday. It did not immediately provide details on what accounted for the jump. Egypt is to issue dollar-denominated Eurobonds worth $4 billion to $5 billion within days, Finance Minister Amr El Garhy said on Sunday. Egypt sold $7 billion in five-, 10- and 30-year bonds last year as it begins its return to international markets after turmoil following the ousting of president Hosni Mubarak in Egypt's natural gas production rose by 1.6 billion cubic feet (bcf) per day in 2017, reaching 5.5 bcf per day currently, Petroleum Minister Tarek El Molla said on Sunday. Production, which has increased thanks to newly discovered fields, will exceed 6 bcf per day before the end of this calendar year, Molla said at a news conference. Region: Europe's largest budget carrier Ryanair RYA.I is to begin flying from Jordan for the first time next month as it expands its operations in the Middle East. The Irish airline, which already flies to Israel and Morocco, will begin with a route from Amman to Paphos in Cyprus in March, it said in a statement. Next winter it will fly 14 routes from Amman and Aqaba. (Source: ADX, DFM, Bloomberg, Reuters, Gulf News, The National, Arabian Business) Volume Triggers Company Close Chg.(%) 52WH 52WL Turnover 30 DA Turnover Methaq Takaful Insurance ,684,159 1,543,104 Al Dhafra Insurance Co 3.81 (0.78) ,500 37,213 Dubai Investments 2.40 (2.44) ,422,502 6,616,379 Gulf Navigation 1.04 (4.59) ,028,625 3,447,630 Al Khazna Insurance 0.28 (3.45) ,982 76,312 Daily Foreign Ownership Increase

7 Company Name Foreign Ownershp (%) (%) Shares Mcap (AED) Marka 14.94% , ,500 Sudatel 80.10% , ,096 Eshraq 35.97% , ,100 FAB 11.05% ,170,143 24,628,452 DSI 16.57% , ,241 International Holdings 5.77% , ,880 Aramex 62.30% ,820 1,229,844 GFH 72.08% ,843 1,095,309 Tabreed 47.47% , ,022 Amlak Finance 20.78% , ,000 Daily Foreign Ownership Decrease Company Name Foreign Ownershp (%) (%) Shares Mcap (AED) RAK Properties 30.16% (0.09) (1,800,000) (1,404,000) DXBE 31.75% (0.06) (4,799,948) (3,023,967) Dubai Investments 16.27% (0.05) (2,126,010) (5,102,424) DIB 17.44% (0.05) (2,466,003) (15,320,786) Arabtec 18.52% (0.05) (750,000) (2,032,500) Union Properties 19.70% (0.04) (1,715,816) (1,660,910) Islamic Arab Ins % (0.04) (476,121) (257,972) Emaar Properties 37.61% (0.04) (2,863,896) (18,729,877) Gulf Nav 31.06% (0.03) (300,000) (312,000) Manazel 20.75% (0.03) (780,000) (452,400) (Source: ADX, DFM, Bloomberg, Reuters)

8 Institutional Sales and Trading Team Harshjit Oza Direct Line : Disclaimer This report was prepared by Integrated Securities ( IS ) in and for the United Arab Emirates ( U.A.E. ). IS is a securities brokerage company regulated by the Emirates Securities and Commodities Authority (and neither an investment nor a financial advisory firm). The information contained in this report is given in summary and does not purport to be complete. All securities and financial product or instrument transactions involve risks, which include (among others) the risk of adverse or unanticipated market, financial or political developments and, in international transactions, currency risk. Content of this report is provided solely for informational purposes and private circulation and should not be construed as advice or a recommendation to investors or potential investors in relation to holding, purchasing or selling securities or any other financial product or instrument, or adopting any hedging or investment strategy and does not take into account your particular investment objectives, financial situation, tax implications or any other needs. Before acting on any information you should consider and confirm the appropriateness of the information having regard to these matters, any relevant offer document and in particular, you should seek professional financial advice. While based on information believed to be reliable, we do not guarantee and make no express or implied representation as to the accuracy of this report or complete description of the securities markets or developments referred to in this report. The information, contained in this report are as of the date indicated and are subject to change at any time without prior notice. This report may provide the addresses of, or contain hyperlinks to, websites. IS has not reviewed any such site and takes no responsibility for the content of the same. Such address or hyperlink is provided solely for your convenience and information and the content of any such website does not in any way form part of this document. Accessing such website or following such link through this report or IS s website shall be at your own risk. The stated price of any securities mentioned in this report is as of the date indicated and is not a representation made by IS that any transaction can be effected at this price. This report is for UAE distribution and only under such circumstances as may be permitted by applicable law. The information contained in this report is not intended nor can it be construed as intended to be directed to any US persons (being any US Citizens, US Green Card Holders, or Resident Aliens subject to US income taxes for IRS purposes) unless stated otherwise. Neither IS nor its officers, directors or shareholders or other persons shall be liable for any direct, indirect, incidental or other damages including loss of profits arising in any way from the information contained in this report. This report is a mere update intended solely for the use by the intended recipients and the content of it may not be reproduced, redistributed or copied in whole or in part for any purpose without IS s prior express consent.