IS Morning Report Monday, October 22, 2018

Transcription

1 # Global & Regional Benchmarks # UAE Trading Summary Indices Close 1Day 1Mnth 3Mnth YTD 1Y (AEDm) BUY SELL NET ADX 4, % 1.2% 3.6% 12.4% 9.9% ADX DFM 2, % -1.0% -6.4% -18.8% -24.9% Local 66% 50% 16% TASI 7, % -1.4% -9.5% 6.0% 9.8% Foreign 34% 50% -16% BHSEASI 1, % -1.3% -2.2% -0.7% 3.0% Institutional 55% 34% 21% EGX 13, % -4.0% -11.6% -10.0% -1.3% Retail 45% 66% -21% Dow Jones 25, % -4.9% 1.5% 2.9% 9.1% DFM S&P 500 2, % -5.5% -1.2% 3.5% 7.5% Local 54% 57% -3% Nasdaq 7, % -6.7% -4.7% 7.9% 12.4% Foreign 46% 43% 3% FTSE 100 7, % -5.9% -8.2% -8.3% -6.3% Institutional 16% 28% -12% DAX 11, % -7.1% -8.0% -10.6% -11.1% Retail 84% 72% 12% CAC40 5, % -7.5% -5.8% -4.3% -5.4% Total Nikkei225 22, % -5.2% -0.3% -0.6% 5.5% Local 57% 55% 2% HIS 26, % -6.4% -7.3% -12.5% -8.1% Foreign 43% 45% -2% # Upcoming Corporate Actions & Events Date Company Event 22-Oct DSI Board Meeting 22-Oct FAB Board Meeting 22-Oct ADIB Board Meeting 24-Oct NBF Board Meeting 25-Oct ETISALAT Board Meeting 28-Oct UNB Board Meeting 29-Oct CBI Board Meeting 07-Nov KHCB Board Meeting

2 11-Nov GFH Board Meeting 13-Nov ITHMR Board Meeting # KEY STORIES Abu Dhabi Commercial Bank Q3 profit up 5.5% to AED1.15bn Mashreq Bank reports increase in Q3 profit by 4.6% to AED587m GFH expects to record profit of more than USD20m from its exit in the Lost Paradise Waterpark, subject to the Auditor s and Central Bank of Bahrain s final confirmation. Adnoc completes Nasr field facilities Abu Dhabi bank merger may create two entities DFM denies rumour on employee embezzling money Abu Dhabi consumer prices rose 4% in September UAE business loan demand up in Q3, personal loans fall GGICO board to meet on 24 th October to set the date for General Assembly Meeting to vote fort special resolution to consider the continuity of operations and to approve the cancellation of the capital reduction (voted earlier in the general assembly meeting on April 24 th ) Depa reported that, Design Studio, Depa's Asian key business unit, made a market release on the Singaporean Stock Exchange announcing its expectation to report a loss for the period ending 30 September 2018 and for the full year ended 31 December 2018 Foreigners sell net $1.1bln of Saudi stocks Saudi Arabia to set up special economic zone at Riyadh airport Saudi's Yansab Q3 profit rises Saudi Kayan Petrochemical Q3 profit rises Saudi's Mobily Q3 loss narrows Oman oil output rises to 990,200 bpd in September Malaysia's Petronas buys 10% stake in Oman's Al Khazzan field Egypt Considers Selling First Yen, Yuan Bonds in Early 2019 Egypt's Arab Dairy Products posts Q3 consolidated profit Juhayna Food Industries 9-Month consolidated profit rises Eastern Company postpones share offering due to fluctuations in international and domestic markets # Key Global Trends/ Market Clues

3 Asian share markets pared early losses on Monday as Chinese stocks swung higher for a second session and helped offset geopolitical concerns over Saudi Arabia, Italy and Brexit. Blue chips in Shanghai climbed 3.5 percent in early trade there, extending Friday's bounce on Beijing's pledge of support for the economy and companies. MSCI's broadest index of Asia-Pacific shares outside Japan turned around to edge up 0.2 percent. Oil prices edged up on Monday, as markets were expected to tighten once U.S. sanctions against Iran's crude exports are implemented next month. Front-month Brent crude oil futures were trading at $79.88 a barrel at 0248 GMT, 10 cents above their last close. Saudi Arabia's stock market survived an early sell-off to close in positive territory on Sunday after the kingdom said Saudi dissident Jamal Khashoggi died in a fight at its consulate in Istanbul. The Saudi index closed up 0.2 percent after falling as much as 3.5 percent earlier in the session. Analysts said the market was likely supported by buying from state-linked Saudi funds. # UAE Stories Abu Dhabi Commercial Bank, which is in merger talks with two other banks, on Sunday reported a 5.5 percent rise in third-quarter profit, roughly in line with analyst forecasts. ADCB made a net profit of 1.15 billion dirhams ($313.1 million) in the three months ending Sept. 30, up from 1.09 billion dirhams in the same period of last year. Net interest and Islamic finance income rose to 1.80 billion dirhams, from 1.68 billion dirhams a year earlier. Customer deposits stood at billion dirhams at the end of the quarter, up 4 percent from a year earlier. The Bank has reported a net profit of AED3.483 billion during the first nine months of 2018, up 9 percent. Mashreq Bank reported third-quarter income of $159 million (AED587m), a 4.6 percent increase on the $152m (AED561m) it reported in the same quarter last year. In financial results published on Sunday, the bank reported a 5 percent increase in net profit to AED 1.7 billion ($ million) in the first nine months of 2018 compared to the same time period last year, while operating income rose 3.6 percent to AED 4.6 billion ($1.25 billion). The bank s non-interest income to operating income ratio remains high at 39.2 percent, while insurance, FX and other income rose by 47.6 percent year-on-year. GFH expects to record profit of more than USD20m from its exit in the Lost Paradise Waterpark, subject to the Auditor s and Central Bank of Bahrain s final confirmation. The profit is expected to be reflected in GFH s financial results for Q Abu Dhabi National Oil Company (Adnoc) on Sunday said that it successfully and safely completed the installation of all Nasr supercomplex facilities. This megastructure is one of the largest supercomplexes in the world, with Nasr field contributing to Adnoc s end of 2018 oil production capacity target of 3.5 million barrels per day, Adnoc said on its twitter account without providing further details. Abu Dhabi Commercial Bank, Union National Bank and Al Hilal Bank in their merger talks are seriously considering the idea of creating two banking entities, one conventional and the other, Islamic. The entities are weighing merger scenario where ADCB and UNB are merged into a conventional banking entity, while Islamic windows and Islamic financing subsidiaries of ADCB and UNB are merged with Al Hilal Bank. The Dubai Financial Market (DFM) denied rumours being circulated on social media about an employee embezzling money. The DFM said that these false rumours are related to a case handled and solved by Dubai Courts in 2016, and that the circulated numbers in the alleged reports are completely wrong. The actual case in 2016 was about an employee who tried to embezzle Dh1.8 million, not Dh1.8 billion. Consumer prices in Abu Dhabi rose 4 per cent in September from a year earlier on higher transportation and clothing costs. The acceleration comes amid an expectation that inflation will reach 3.4 per cent in the fourth quarter

4 of this year, according to the Statistics Centre Abu Dhabi. Prices in September last year rose 0.4 per cent from the same month a year earlier, Scad said in a report on Sunday. Meanwhile, prices last month fell 0.4 per cent compared with August. Demand for business loans in the United Arab Emirates increased in the July-September quarter but demand for personal loans shrank, a central bank survey showed on Sunday. The net balance measure for business lending - the weighted percentage of respondents reporting an increase in demand for loans minus those reporting a fall - rose to plus 14.0 in the quarter from plus 11.8 in the previous quarter. GGICO board to meet on 24 th October to set the date for General Assembly Meeting to vote fort special resolution to consider the continuity of operations and to approve the cancellation of the capital reduction (voted earlier in the general assembly meeting on April 24 th ) Depa reported that, Design Studio, Depa's Asian key business unit, made a market release on the Singaporean Stock Exchange announcing its expectation to report a loss for the period ending 30 September 2018 and for the full year ended 31 December 2018 # GCC/ MENA Foreigners sold a net 4.01 billion riyals ($1.07 billion) in Saudi stocks in the week ending Oct. 18, exchange data showed on Sunday - one of the biggest selloffs since the market opened to direct foreign buying in mid The selloff came during a week when investors were rattled by Saudi Arabia's deteriorating relations with foreign governments following the disappearance of journalist Jamal Khashoggi. A breakdown of the exchange data showed foreigners sold 5 billion riyals worth of stocks and bought million worth. Saudi Arabia to set up special economic zone at Riyadh airport. Saudi's Yansab posted Q3 net profit after zakat and tax 729 million riyals vs profit of million riyals year ago. Q3 total sales clocked in at 2.11 billion riyals vs 1.93 billion riyals year ago. Yansab says increase in net profit of Q3 is attributable to higher average sales prices for most of products, despite increase in prices of some feedstock materials. Saudi Kayan Petrochemical posted Q3 net profit after zakat and tax million riyals vs profit of 381 million riyals year ago. Q3 sales clocked in at 3.38 billion riyals vs 2.70 billion riyals year ago. Saudi Kayan Petrochemical said reason for increase in net profit of Q3 is due to improvement in operating performance for most of plants. Saudi's Mobily posted Q3 net loss after tax and zakat 30.9 million riyals vs loss of million riyals year ago. Q3 revenue clocked in at 2.98 billion riyals vs 2.81 billion riyals year ago. Capex for first 9 months in 2018 increased to 2.11 billion riyals versus 1.23 billion riyals in the first 9 months in Oman s oil and condensates output increased to 990,200 barrels per day (bpd) in September, its Ministry of Oil and Gas wrote on Twitter on Sunday. The sultanate s production was 974,500 bpd on average in August and 975,500 bpd in July. Malaysia's Petronas buys 10% stake in Oman's Al Khazzan field. Egypt is considering issuing its first Japanese yen and Chinese yuan-denominated bonds in the first quarter of 2019 as part of efforts to diversify funding sources and boost foreign inflows, Finance Minister Mohamed Maait said. The government has sold more than $13 billion in foreign currency-denominated bonds since it lifted most currency controls, raised interest rates and cut subsidies in November 2016 to help secure a $12 billion loan from the International Monetary Fund. Its first euro-denominated bond, issued in April, was oversubscribed. As volatility in emerging markets makes investors more cautious, however, the government is looking to expand its options.

5 Maait visited Seoul this month, and Egypt has plans for non-deal roadshows in China, Japan, Malaysia and other Asian and European countries before the year s out. Arab Dairy Products posted nine-month consolidated net profit EGP 26.4 million vs loss of EGP 11.2 million year ago. Q3 consolidated net profit attributable to shareholders came forth at EGP 17.6 million vs loss of EGP 3.1 million year ago. Juhayna Food Industries posted nine-month consolidated net profit EGP million vs EGP million year ago. Net sales clocked in at EGP 5.41 billion vs EGP 4.55 billion year ago. Eastern Company postpones share offering due to fluctuations in international and domestic markets (Source: ADX, DFM, Bloomberg, Reuters, Gulf News, The National, Arabian Business) 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.