15-Aug 10:00 10:15 10:30 10:45 11:00 11:15 11:30 11:45 12:00 12:15 12:30 12:45 13:00 13:15 13:30 13:45 14:00 14:15 14:30 14:45 15:00 05 September 2018 TASI Index 7,968.2 0.32% Turnover (SAR mn) 2,500.8 12% TASI Intra Day Movement 8,010 8,000 7,990 7,980 7,970 7,960 7,950 7,940 7,930 7,920 7,910 Intraday TASI Activity Trend (Last 10 Days) - 6 4 2 Turnover (LHS, SAR bn) Previous Close TASI Index (RHS) 8,500 8,000 7,500 7,000 6,500 Regional Indices Close 1D% WTD% YTD% KSA (TASI) 7,968 0.3 0.3 10.3 Qatar (DSM) 9,820-0.7 15.2 Kuw ait (KSE) 5,279 0.3 10.1 Abu Dhabi (ADSM) 4,984 0.9-0.1 13.3 Dubai (DFM) 2,837 0.3-0.1-15.8 Oman (MSM30) 4,429-13.1 Bahrain (BSE) 1,338 0.3 0.5 MSCI GCC 540 0.6 0.1 12.6 Major Commodities / Currencies Close 1D % WTD % YTD % Gold Spot $/Oz 1,193-0.7-8.4 Silver Spot $/Oz 14.15-2.7-16.4 Crude Oil (Brent) 77.90-0.3 0.3 21.7 OPEC Basket 75.77 17.5 Euro 1.16 0.1-3.4 USD Index 95.31-0.1 3.5 JPY 111.510-0.1-1.1 Major Global Indices Close 1D % WTD % YTD % DJ Industrial 25,952 S&P 500 2,897 - - 8.3 Nikkei 225 22,631-0.3 - -0.6 Hang seng 27,573-1.4-1.1-7.8 FTSE 100 7,458-0.6 0.3-3.0 CAC 40 5,343-1.3-1.2 0.6 MSCI World 2,163-0.5-0.6 2.8 MSCI EM 1,040-0.7-1.5-1 Interest Rates 1M 3M 12M 3M Chg 1Y LIBOR (USD) 2.11 2.32 2.84 0 SAIBOR 2.42 2.62 3.00 0.82 EIBOR 2.26 2.63 3.16 9 Data Sources: Bloomberg Updated as of 05/Sep/2018 8:48 AM Global commentary Research Department research@alrajhi-capital.com Tel:+966 11 211 9449 US stock markets declined on Tuesday, dragged down by technology and healthcare stocks. The Nasdaq Composite Index and the S&P 500 dropped % each; while the Dow Jones edged down 0.1%. On the economic data front, the US ISM manufacturing PMI data was betterthan-expected (61.3 in Aug Vs 57.7 consensus). Meanwhile, investors would closely monitor the developments over the US-Canada trade negotiation expected to resume on Wednesday. European markets dropped on Tuesday. The CAC 40 slipped 1.3%, weighed down by the materials and industrials sectors; while the DAX fell 1.1%, dragged down by telecom stocks. Meanwhile, the FTSE 100 lost 0.7%, pulled down by mining shares. Most stock markets in the GCC region advanced yesterday. Kuwait gained %, while Abu Dhabi climbed 0.9%, led by banking shares. Dubai rose 0.3%, backed by real estate stocks; while Bahrain and Qatar added 0.3% and %, respectively. However, Oman ended on a flat note. Asian markets are trading in the red this morning, tracking negative cues from western countries. The Hang Seng Index and the Shanghai Composite Index are down 1.8% and 0.9%, respectively. The Nikkei 225 and the KOSPI are down 0.5% and %, respectively. Meanwhile, the Caixin China Services PMI data is weaker-thanexpected (51.5 in Aug Vs 52.7 consensus). Brent crude remained broadly unchanged on Tuesday. Key crude contracts Brent and WTI ended at US$ 78.17 (%) and US$ 69.87 (+0.1%), respectively. Saudi commentary Tadawul All Share Index (TASI) rose 25.81 points or 0.33% to close at 7,968.24. Eleven of the twenty sector indices closed higher. The advance decline ratio was 75/86. Trading turnover was around SAR 2.5bn. Bupa Arabia completes SAR 7mn share buyback for employee scheme: Bupa Arabia for Cooperative (Bupa Arabia) on September 4 purchased 75,916 of its own shares for its employees incentives program at an average price of SAR 97 per share, totalling SAR 7.36 million. (Source: Tadawul) Wafa to vote on capital hike procedures on September 10: Saudi Indian Company for Cooperative (Wafa) shareholders on September 10 will vote on whether to proceed on capital hike procedures. (Source: Tadawul) Tadawul, MSCI launch joint index for domestic, international investors: The Saudi Stock Exchange (Tadawul) has signed an agreement with index provider MSCI Inc. to create a joint tradeable index that can serve as the basis for investment instruments including derivatives and ETFs. (Source: Argaam) Please see penultimate page for additional important disclosures. Al Rajhi Capital (Al Rajhi) is a foreign broker-dealer unregistered in the USA. Al Rajhi research is prepared by research analysts who are not registered in the USA. Al Rajhi research is distributed in the USA pursuant to Rule 15a-6 of the Securities Exchange Act of 1934 solely by Rosenblatt Securities, an SEC registered and FINRA-member broker-dealer. 1
Energy Health Care Equipment & Svc Consumer Services Transport Food & Staples Retailing Diversified Financials Commercial & Professional Svc Pharma Consumer Durables & Apparel Media TASI Large Cap (>10% Index weight) Sectors Performance TASI Top Gainers / Losers 1.8 1.6 1.4 1.2 0.8 0.6 TASI Materials Banks Real Estate Telecom 3 2 1-1 -2-3 Company Last Price Chg % Vol (mn) Value Trd (SAR mn) Saudi Real Estate 14.72 6.7 5.348 79.57 Know Econ City 10.84 2.758 37 Sisco 14.48 4.9 1.148 16.61 ALAWWAL BANK 14.96 4.8 0.776 11.36 Banq Saudi Fr 33.00 2.8 0.529 17.45 Company Last Price Chg % Vol (mn) Value Trd (SAR mn) Savola 29.3-4.1 0.570 17.34 Meahco 39.4-3.6 1.102 43.95 Emaar Eco City 9.1-2.8 10.875 102.34 Wala'a 25.5-2.7 0.392 16 Al Mouw asat 82.9-2.5 61 5.13 TASI Mid Cap (5-10% index weight) Sectors Performance TASI Top Index Movers / Losers (Heavy weight stocks) 1.5 0.5-0.5 - -1.5 - -2.5-3.0 Food & Beverages Capital Goods Utilities Retailing 1 1 - -1-1 -2 Company Last Price Chg % Index Imp Value Trd (SAR mn) Al Rajhi Bk 86.80 1.5 18.0 1.43 Banq Saudi Fr 33.00 2.8 5.7 0.53 Sabic 126.20 0.5 3.7 2.39 Samba 28.70 1.1 3.0 3.65 STC 83.90 1.1 2.9 0.31 Company Last Price Chg % Index Imp Value Trd (SAR mn) NCB 43.00-1.4-6.3 70.75 Savola 29.25-4.1-4.9 17.34 ANB 33.35-1.6-2.6 7.38 Sabb 32.90-1.1-1.7 14.32 Bank Albilad 24.92-1.3-11.31 TASI Small Cap (<5% index weight) Sectors Performance 8 6 4 2 0-2 -4-6 7 6 5 4 3 2 1-1 -2 TASI Volume Leaders Company Last Price Chg % Vol (mn) Value Trd (SAR mn) Alinma Bk 21.36 17.611 372 Emaar Eco City 9.12-2.8 10.875 102.34 Dar Al Arkan 9.98-128 100.65 Saudi Real Estate 14.72 6.7 5.348 79.57 Saudi Kayan 17.74 0.8 3.854 68.37 Samba 28.70 1.1 3.654 106.29 National Shipp 32.40 1.4 2.845 92.88 Know Econ City 10.84 2.758 37 Sabic 126.20 0.5 2.391 301.82 Riyad Bank 16.00 1.918 30.69 TASI Stocks Closer to 52 Week High TASI - Stocks Closer to 52 Week Low Company Last Price 52Wk High % Diff Value Trd (SAR mn) Safco 72.10 73.10 1.4% 30.688 National Shipp 32.40 33.20 2.5% 92.882 Filing & Packing 36.10 37.30 3.3% 3.501 ALAWWAL BANK 14.96 15.46 3.3% 11.359 Jarir Mktg 186.00 193.00 3.8% 1.911 Company Last Price 52Wk Low % Diff Value Trd (SAR mn) Alahli Takaful 25.50 25.50 % 2.599 Savola 29.25 29.25 % 17.338 Arabian Cement 21.70 21.68 0.1% 1.670 Al Khaleej Train 13.46 13.40 % 2.773 Yanbu Cem 22.12 20 0.5% 1.993 Disclosures Please refer to the important disclosures at the back of this report. 2
Summary of our Coverage Mcap Last ADTV P/E (x) EV/EBITDA (x) TP Upside (%) (SAR) (SARmn) Price (SARmn) 2017A 2018E 2019E 2017A 2018E 2019E 2018E Div. Yield (%) SABIC 378,600 126.2 13 6.97 586.8 16.7x 15.6x 16.6x 7.9x 7.9x 8.4x 4.1% Sipchem 7,517 20.5 2 21.95 19.4 14.6x 11.1x 10.7x 8.1x 6.8x 6.8x 4.9% SAFCO 30,042 72.1 6 (9.85) 18.9 30.9x 22.5x 22.5x 20.6x 16.3x 16.0x 3.5% NIC 13,940 20.84 26.0 24.76 37.5 15.3x 9.7x 11.5x 11.1x 8.3x 8.4x % Yansab 41,569 73.9 78.0 5.55 16.6 13.9x 13.4x 13.4x 8.9x 10.1x 9.4x 5.1% APCC 10,824 55 6 10.91 9.9 14.3x 14.9x 13.4x 11.4x 13.6x 11.4x 5.5% Arabian Cement 2,170 21.7 19.5 (10.14) 2.7 13.1x -19.9x -241.1x 8.8x 102.6x 21.2x 6.9% Yamama Cement 2,896 14.3 12.5 (12.59) 1.9 32.6x 89.4x 6x 13.3x 17.4x 15.9x 3.5% Saudi Cement 6,457 42.2 43.0 1.90 3.5 16.0x 13.2x 11.2x 11.3x 9.8x 8.8x 8.9% Qassim Cement 3,110 34.55 33.5 (3.04) 1.9 15.5x 17.1x 17.7x 10.5x 10.9x 10.5x 7.9% Yanbu Cement 3,484 22.12 23.0 3.98 3.5 16.6x 14.8x 14.9x 1x 8.2x 8.4x 6.8% Southern Cement 4,851 34.65 38.0 9.67 3.9 17.9x 15.1x 14.4x 12.7x 1x 1x 5.9% Ma'aden 62,747 53.7 47.6 (11.36) 13.3 84.8x 31.4x 34.2x 22.2x 14.7x 14.2x % Telecom STC 167,800 83.9 78.5 (6.44) 24.5 13.5x 18.3x 15.7x 6.5x 8.7x 8.4x 5.1% Mobily 13,860 18 17.5 (2.78) 54.7-16.1x -36.0x -30x 6.6x 6.2x 6.1x % Zain 3,532 6.05 6.6 9.09 8.7 369.8x -30.3x -35.6x 5.6x 5.3x 5.4x % Food & Agriculture Almarai 52,300 52.3 5 (4.40) 19.7 24.7x 22.4x 21.3x 13.9x 13.4x 13.1x 1.6% Savola 15,619 29.25 33.0 12.82 15.9 80.6x 20.6x 17.7x 26.6x 19.2x 15.4x 1.7% Herfy 2,801 43.3 47.0 8.55 1.6 15.4x 14.4x 13.1x 12.1x 11.3x 10.5x 5.5% Catering 7,462 91 89.0 (2.20) 7.7 59.9x 14.5x NA 46.4x 1x NA % Retail Jarir 16,740 186 166.0 (10.75) 8.1 15.2x 18.8x 17.7x 1x 18.7x 17.4x % Alhokair 5,057 24.08 24.0 (0.33) 19.5 18.7x 13.7x 1x 1x 8.6x 8.1x 4.2% Alothaim 6,165 68.5 83.0 21.17 5.8 16.6x 16.7x 15.2x 11.2x 11.7x 10.7x 2.2% Extra 2,512 59.8 60.3 0.84 17.0 14.1x 14.4x 11.8x 11.1x 11.1x 9.4x 2.5% Healthcare Dallah 4,366 74 94.0 27.03 6.6 2x 15.6x 13.2x 17.4x 14.2x 12.5x 2.7% Mouwasat 8,290 82.9 89.0 7.36 4.3 22.9x 21.3x 19.3x 17.3x 16.7x 15.1x 4.2% NMCC 2,164 48.25 5 3.63 8.3 2x 19.8x 17.7x 11.9x 12.2x 1x 2.6% Al Hammadi 3,462 28.85 UR NA 5.4 41.2x 28.9x 22.9x 25.9x 18.4x 15.8x 2.9% Other Bahri 12,758 32.4 UR NA 24.4 15.3x 13.5x 10.5x 11.1x 1x 9.1x 5.4% Source: Bloomberg, AlRajhi capital * Fawaz Al Hokair fiscal ending is March, hence 2018e corresponds to Year ending March 2019 Disclosures Please refer to the important disclosures at the back of this report. 3
19-Aug DFM Bank Reality Investment Transport Telcom Services Performance of Regional markets Country Last Index Change (%) MCap Volume Turnover P/E (x) P/B (x) Div Yld Close 1D 1M YTD US$ bn mn shr US$ mn 12M Current 12M (%) Saudi Arabia 7,968 0.3 0.3 10.3 505 97 666 17.5 1.8 3.6 Qatar 9,820-0.7 15.2 118 6.2 24 14.6 1.5 4.5 Dubai 2,837 0.3-0.1-15.8 77 93 28-1.1 6.0 Abu Dhabi 4,984 0.9-0.1 13.3 135 59 48 13.1 1.5 4.8 Kuw ait (Premier Market) 5,279 0.3 10.1 63 29 39 1 1.6 3.6 Oman 4,429-13.1 13 7 3 10.7 0.9 6.2 Bahrain 1,338 0.3 0.5 21 1 9.0 0.8 6.1 ; Note: P/E & Div Yield LTM basis Performance of FTSE Emerging Index Country Last Index Change (%) MCap Volume Turnover P/E (x) P/B (x) Div Yld Close 1D 1M YTD US$ bn mn shr US$ mn 12M Current 12M (%) Brazil 74,712-1.9-2.6-2.2 552 326 1,630 17.4 1.6 3.7 Czech Republic 1,074 0.1 0.1-57 1 13 13.0 1.5 4.9 Greece 710-2.2-2.7-11.5 53 22 59 20.7 0.6 2.8 Hungary 36,968-0.7-6.1 26 2 28 10.3 1.3 2.9 Malaysia 1,805 - -0.8 273 91 193 16.1 1.9 3.2 Mexico 48,884-1.2-1.3-307 134 302 17.6 2.5 2.1 South Africa 57,892-1.4-1.3-2.7 776 294 1,651 18.1 3.2 Taiw an 11,021-3.6 1,069 1,721 3,627 14.3 1.7 4.0 Thailand 1,709-0.3-0.7-2.6 527 3,124 1,210 16.9 3.1 Turkey 93,189-0.8 0.5-19.2 92 869 880 7.0 1.1 4.7 Chile 5,173-1.2-1.8-7.0 175 957 126 18.3 1.7 2.8 China 3,342-0.7-17.1 3,867 6,709 12,535 12.4 1.6 2.4 Colombia 1,530 - -0.8 1.1 114 18 31 15.3 1.4 2.4 Egypt 1,536 0.6-6.9 24 168 36 16.9 2.1 2.8 India 11,520-0.5-1.4 9.4 1,175 263 2,278 24.0 3.1 1.2 Indonesia 5,740-2.8-4.6-9.7 446 5,405 293 19.3 2.2 2.4 Kuw ait 5,279 0.3 10.1 63 29 39 1 1.6 3.6 Pakistan 41,754 3.2 60 65 23 1 1.5 5.2 Peru 1,631-2.8-2.8-2.1 53 1 22 14.7 2.4 3.7 Philippines 7,752-1.6-1.3-9.4 184 93 71 19.9 2.1 1.5 Qatar 9,820-0.7 15.2 118 6 24 14.6 1.5 4.5 Russia 1,082-0.3-0.9-6.3 506 12,202 389 5.5 0.7 5.5 UAE 4,984 0.9-0.1 13.3 135 59 48 13.1 1.5 4.8 FTSE Emerging Index 504-0.5-2.2-10.9 8,939 21,560 17,025 13.2 1.7 2.8 Dubai Activity Trend (Last 10 Days) Dubai Sector Performances Dubai Top Gainers / Losers Turnover (LHS, AED bn) DFMGI Index (RHS) 2,850 2,840 2,830 2,820 2,810 2,800 2,790 2,780 - Drake & Scull Intl 5 4.4 40.15 - EMAAR Dev 5.40 1.9 0.74 ENBD 9.30 1.2 0.97-1 Arabtec 1.88 1.1 5 Islamic Arab Ins 5 0.9 19.93-1 -2-2 -3 Amanat Holdings 1.19-4.8 3.07 Dubai Islamic Ins 0.65-3.3 0.57 Takaful House 0.68-1.9 0.54 Gulf Navigation 0.88-1.5 0.19 Ajman Bank 0.92-1.2 2 Disclosures Please refer to the important disclosures at the back of this report. 4
15-Aug 15-Aug KSE Technology Financial Telecom Consumer Goods Healthcare Materials Oil&Gas 15-Aug DSM Bank Telecom Consumer Transport Real Estate 19-Aug ADSM Real Estate Energy Telecome Banks Fin.Services Industrial Services Consumer Abu Dhabi Activity Trend (Last 10 Days) Abu Dhabi Sector Performances Abu Dhabi Top Gainers / Losers 0.5 Turnover (LHS, AED bn) ADSMI Index (RHS) 5,000 4,500 - UNB 4.43 14.8 0.655 ADCB 8.00 12.8 128 AD Nat (TAQA) 1.18 6.3 67 Gulf Medical Pro 1.98 4.2 01 ADIsB 4.16 2.5 1.436 3 3 2 2 1 1 - -1-1 -2 Gulf Cement Co 0.89-8.3 36 International holding 1.19-4.0 0.161 Arkan Building Mat 0.54-1.3 0.181 Agthia Group 4.80-1.2 0.143 Rak Properties 0.61-1.1 3.216 Qatar Activity Trend (Last 10 Days) Qatar Sector Performances Qatar Top Gainers / Losers 0.3 0.3 0.1 0.1 Turnover (LHS, QAR bn) DSM Index (RHS) 10,000 9,600 9,200 3.0 - - -3.0-4.0 Qatar First Bank 5.35 4.9 50 INVESTMENT HOLDI 5.83 4.1 2.939 United Devt Co 14.23 1.5 0.312 Gulf Intl Servcs 17.50 25 Ind Qatar 124.00 0.8 60 3 3 2 2 1 1 - -1-1 Medicare Group 67.58-0.9 33 Vodafone Qatar 8.91-0.9 0.640 Ooredoo 70.80-0.7 71 QIsB 138.03-0.5 32 Qatar Intl Is Bk 56.13-25 Kuwait Activity Trend (Last 10 Days) Kuwait Sector Performances Kuwait Top Gainers / Losers 20 15 10 5 0 Turnover (LHS, KWD mn) KWSEPM Index (RHS) 5,400 5,350 5,300 5,250 5,200 5,150 5,100 - - -3.0-4.0 - -6.0 30 Gulf Bank 256 2.4 1.716 Natl Industries Gp 166 1.8 1.389 25 KUWAIT FINANCE 589 1.4 7.523 Boubyan Bank 528 1.3 0.754 20 Agility 840 1.3 0.752 15 10 5 Mezzan Holding 698-0.798 GFH 104-09 Mabanee Co 670-0.5 98 Oman Activity Trend (Last 10 Days) Oman Sector Performances Oman Top Gainers / Losers 3 3 2 2 1 1 0 Turnover (LHS, OMR mn) MSM30 Index (RHS) 4,460 4,440 4,420 4,400 4,380 4,360 4,340 4,320 0.7 0.6 0.5 0.3 0.1 MSM 30 Bank Industry Services - -1-1 -2-2 Al-Anw ar Ceramic 88 3.5 1.364 Al Anw ar Holding 0.114 2.7 0.158 Ooredoo 0.526 1.2 0.120 Al Jazeira Ser 0.111 0.9 0.396 Oman & Emir (O) 50 0.125 0.8 0.343 Oman Flour Mills 0.740-2.6 44 Natl Gas Co 0.310-1.3 07 Al Madina 95-00 Bank Muscat 0.386-0.5 88 Oman Telecom 0.776-0.5 12 Disclosures Please refer to the important disclosures at the back of this report. 5
19-Aug BSE Banks Hotel & Tourism Industries Services Bahrain Activity Trend (Last 10 Days) Bahrain Sector Performances Bahrain Top Gainers / Losers 3.5 3.0 2.5 1.5 0.5 - Turnover (LHS, BHD mn) BHSEASI Index (RHS) 1,355 1,350 1,345 1,340 1,335 1,330 1,325 0.8 0.6 - - -0.6-0.8-4.0 3.0 - - Al-Salam Bank 0.103 6.2 25 Nass Corp 99 2.1 0.114 Seef Properties 24 1.8 73 Arab Banking Corp 0.390 1.3 94 Bahrain Telecom 50 0.8 59 Disclosures Please refer to the important disclosures at the back of this report. 6
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"Neutral": We expect the share price to settle at a level between 10% below the current share price and 10% above the current share price on a 12 month time horizon. "Underweight": Our target price is more than 10% below the current share price, and we expect the share price to reach the target on a 12 month time horizon. "Target price": We estimate target value per share for every stock we cover. This is normally based on widely accepted methods appropriate to the stock or sector under consideration, e.g. DCF (discounted cash flow) or SoTP (sum of the parts) analysis. Please note that the achievement of any price target may be impeded by general market and economic trends and other external factors, or if a company s profits or operating performance exceed or fall short of our expectations. Contact us Al Rajhi Capital Research Department Head Office, King Fahad Road P.O. Box 5561, Riyadh 11432 Kingdom of Saudi Arabia Email: research@alrajhi-capital.com Al Rajhi Capital is licensed by the Saudi Arabian Capital Market Authority, License No. 07068/37. 8