27-Jul 30-Jul 31-Jul 1-Aug 2-Aug 3-Aug 6-Aug 7-Aug 8-Aug 9-Aug Thousands 10:00 10:15 10:30 10:5 11:00 11:15 11:30 11:5 12:00 12:15 12:30 12:5 13:00 13:15 13:30 13:5 1:00 1:15 1:30 1:5 15:00 10 August 2017 TASI Index 7,153.2 0.11% Turnover (SAR mn) 3,397.3 1% TASI Intra Day Movement Global commentary Research Department research@alrajhi-capital.com Tel:+966 11 211 9370 7,190 7,180 7,170 7,160 7,150 7,10 7,130 7,120 Intraday TASI Activity Trend (Last 10 Days) - 2 Turnover (LHS, SAR bn) Previous Close TASI Index (RHS) 9,000 8,500 8,000 7,500 7,000 6,500 6,000 5,500 5,000 US stock markets declined on Wednesday, dragged down by weakerthan-expected corporate earnings (Disney and Office Depot). Further, the geopolitical concerns in North Korea also weighed on the indices. The Nasdaq Composite Index slipped 0.3%, while the Dow Jones fell 0.2%. However, the S&P 500 ended the session on a flat note. European markets dropped on Wednesday, owing to prevailing tensions between the US and North Korea. The CAC 0 declined 1.% pushed down by financial and healthcare sectors, while the DAX slipped 1.1% led by banking stocks. Meanwhile, the FTSE 100 fell 0.6%. Most stock markets in the GCC region fell yesterday. Qatar declined 0.7%, dragged down by Industries Qatar, while Abu Dhabi dropped 0.7% pulled down by Dana Gas. Oman and Kuwait lost 0.2% and 0.1%, respectively, while Dubai edged down 0.1% led by Arabtec and DXB Entertainments. However, Bahrain remained broadly unchanged. Regional Indices Close 1D% WTD% YTD% KSA (TASI) 7,153 0.1-0.8 Qatar (DSM) 9,307-0.7 - -10.8 Kuw ait (KSE) 6,823-0.1 18.7 Abu Dhabi (ADSM),556-0.7-0.9 0.2 Dubai (DFM) 3,63-0.1-0.9 3.2 Oman (MSM30),99-0.2-1.3-13.6 Bahrain (BSE) 1,32 0.1 8. MSCI GCC 83-0.2 0.6 1. Major Commodities / Currencies Close 1D % WTD % YTD % Gold Spot $/Oz 1,277 1. 10.8 Silver Spot $/Oz 16.90-0.3 3.9 6.2 Crude Oil (Brent) 52.70 0.5-10. OPEC Basket 50.9 0.9 1.1-5.3 Euro 1.17-0.1-0.3 11.6 USD Index 93.65 0.1 0.1-8. JPY 109.930 0.7 6. Major Global Indices Close 1D % WTD % YTD % DJ Industrial 22,09-0.2-0.2 11.6 S&P 500 2,7-0.1 10.5 Nikkei 225 19,689-0.3-1.3 3.0 Hang seng 27,315-1.6-0.9 2.2 FTSE 100 7,98-0.6-0.2 CAC 0 5,16-1. -1.1 5.8 MSCI World 1,962-0.3-0.3 1 MSCI EM 1,069-0.9 0.2 Most Asian markets are trading in the red zone this morning, tracking negative cues from the western countries. The Hang Seng Index is down 1.7% led by financial and real estate shares, while the KOSPI and the Shanghai Composite Index are down 1.2% and 0.7%, respectively. However, the Nikkei 225 is trading on a flat note. Brent crude gained 1.1% on Wednesday, as the EIA reported a larger-than-expected weekly drop in the US crude oil inventories. Key crude contracts Brent and WTI ended at US$ 52.70 (+1.1%) and US$ 9.56 (+0.8%), respectively. Saudi commentary Tadawul All Share Index (TASI) gained 7.63 points or 0.11% to close at 7,153.17. Fourteen of the twenty sector indices closed higher. The advance decline ratio was 10/67. Trading turnover was around SAR 3.bn. Arabian Cement plans 10% dividend for H1-17: Arabian Cement Co. s board of directors has recommended a 10 percent cash dividend for the first half of 2017, at SAR 1 per share, amounting to SAR 100 million. (Tadawul) L Azurde H1 net profit falls by 35%: L Azurde Company for Jewelry, one of Saudi Arabia s biggest jewelers, reported a net profit of SAR 28. million for the first half of 2017, a 35. percent year-onyear (YoY) drop attributed to lower operating revenue and the SAR 12.5 million one-off FX gain last year. (Tadawul) Interest Rates 1M 3M 12M 3M Chg 1Y LIBOR (USD) 1.23 1.31 1.73 0.50 SAIBOR 1.5 1.80 2.2-0.5 EIBOR 1.32 1.53 2.13 0.3 Data Sources: Bloomberg Updated as of 10/Aug/2017 7:23 AM 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 193 solely by Rosenblatt Securities, an SEC registered and FINRA-member broker-dealer. 1
Our Latest Reports: Saudi Cement sector: First y-o-y growth in a year dividend yield looks attractive Regional Supply and Demand: In the first 7 months of 2017, cement sales volume declined 19% y-o-y to 28.3mn tons, while clinker production fell 10% on an yearly basis to 29.3mn tons and inventories stood at 33.6mn tons. Looking at capacities, inventories and potential demand of each region, we believe that the Northern region remains the weakest as current inventories represent 118% of region producers dispatches in the last 12-months. Weak demand within the region has led companies to reach out to far away regions which have negatively impacted companies profit/ton due to the high transportation costs. The increase in competition has also, no doubt, reduced realized prices. For Western and Southern regions, recent capacity additions have added to existing over supply. For the Central region, Q2 selling prices were lower than in the Western region as it is most accessible to producers despite favorable location and low inventories compared to other regions. Eastern region s producers were impacted after implementing export fees on Bahrain exports, however, these exports are likely to re-start after the 50% discount on fees. In the near term, volatility and stiff competition on selling prices are likely to continue in the sector given the slowdown in construction activities and limited demand from mega projects. Click here to download attached English Report Savola Group Q2: Not out of the woods yet Savola s Q2 was marginally below estimates, weighed down by lower than expected revenue (down 5.6% y-o-y vs. estimate of 0.5% decline) and gross margins (down 180bps y-o-y vs. estimate of 120bps decline). Food segment of Savola (7% of revenue in 2016) has been relatively stable as compared to Retail segment (53% of revenue in 2016) in the past few quarters, and the same is likely to have been the case this quarter as well. Hence, we believe the revenue weakness is likely due to higher than estimated LFL sales decline in the retail segment, partly accentuated by weak consumer spending that has impacted most consumer companies in Q2. Pending release of detailed financials, our estimates undergo only a marginal revision to incorporate Q2 headline numbers. Our revised target price stands at SAR0.8 per share (earlier SAR39. per share). Our target price implies 8.9% downside from the current market price. Maintain Neutral rating. However, should investors choose to use the current market price of Almarai (SAR80 per share) instead of target price, then Savola s SoTP value increases to SAR9.1 per share. We continue to believe that the turnaround in retail segment s revenue performance, which has been under pressure in the previous few quarters, is key to Savola s re-rating. Click here to download attached English Report Disclosures Please refer to the important disclosures at the back of this report. 2
Energy Health Care Equipment & Svc Consumer 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 1.5 0.5-0.5 - -1.5-2.5 TASI Materials Banks Real Estate Telecom.0 -.0 - -8.0-1 -1 Company Last Price Chg % Vol (mn) Value Trd (SAR mn) Nama Chemicals 16.8 9.9 0.996 15.90 Saudi Printing & Pkg 2 9.9 0.582 13.03 Aminatit 6.2 9.7 5.701 35.9 Petro Rabigh 12.98 6.7 6.531 8.26 Alujain Corp 23.67 6.6 5.157 120.8 Company Last Price Chg % Vol (mn) Value Trd (SAR mn) Saudi Res and Mktg 77.1-5.1 1.18 11.67 Saudi Marketing 28.6 -.5 0.83 23.99 Saudi Indus Expo 31.9 -. 0.966 30.99 Thimar 36.9 -.1 97 78.35 Ash-Sharqiyah Devt 51.6-3. 0.762 TASI Mid Cap (5-10% index weight) Sectors Performance TASI Top Index Movers / Losers (Heavy weight stocks) 7.0.0 3.0 - Food & Beverages Capital Goods Utilities Retailing 3 3 2 2 1 1 - -1-1 -2 Company Last Price Chg % Index Imp Value Trd (SAR mn) Savola 7.80 2.6.7 0.3 NCB 50.55 3. 0.53 Sabb 25.60 2. 2.9 0.15 Petro Rabigh 12.98 6.7 1.5 6.53 National Shipp 32.67 1.7 1.1 0.68 Company Last Price Chg % Index Imp Value Trd (SAR mn) Al Rajhi Bk 63.01-0.5 -.2 186.57 STC 73.09-1.2-2.8 16.88 Jabal Omar 66.9-0.7-2.6 6.3 Jarir Mktg 155-1.2-1.7.81 Saudi Res and Mktg 77.07-5.1-1.2 11.67 TASI Small Cap (<5% index weight) Sectors Performance 8 10 6 8 2 0-2 - -6 6 2-2 - TASI Volume Leaders Company Last Price Chg % Vol (mn) Value Trd (SAR mn) Dar Al Arkan 7.17 3.5 72.585 521 Alinma Bk 13.70 53.25 723.56 Saudi Kayan 7.01-2.1 37.836 271.1 Sabic 83.36 1.5 9.118 759.3 Amana Coop Ins 10.33 9.3 6.669 67.21 Solidarity Saudi 13-1.3 77 51.72 Zain Saudi 8.33 0.5.55 38.07 Saudi Indl Devt 11.68 5.2.325 50.9 Al Tayyar 39.03.2.319 167.68 Al-Ahlia Coop Ins 8.11-0.7 3.918 31.98 TASI Stocks Closer to 52 Week High TASI - Stocks Closer to 52 Week Low Company Last Price 52Wk High % Diff Value Trd (SAR mn) Sanad Coop Ins 15.23 15.23 % 00 Weqaya For Takaf 19.39 19.39 % 00 Sadafco 152.9 157.00 3.0% 0.563 Bupa Arabia 20.76 21.80 % 257.721 Saudi Elec 12 150 7.8%.653 Company Last Price 52Wk Low % Diff Value Trd (SAR mn) Sanad Coop Ins 15.23 15.23 % 00 Weqaya For Takaf 19.39 19.39 % 00 Saudi Inv Bk 12.60 1 1.6% 0.880 Safco 10 10.80 1.9% 2.290 Riyad Bank 62. 60 2.% 9.778 Disclosures Please refer to the important disclosures at the back of this report. 3
-Jul 5-Jul 1 DSM Bank Telecom Consumer Transport Real Estate -Jul 1 ADSM Real Estate Energy Telecome Banks Fin. Industrial Consumer -Jul 1 DFM Bank Reality Investment Transport Telcom Performance of Regional markets Country Last Index Change (%) MCap Volume Turnover P/E (x) P/E (x) P/E (x) P/B (x) Div Yld Close 1D 1M YTD US$ bn mn shr US$ mn 12M 2016E 2017E Current 12M (%) Saudi Arabia 6,691 2.9-3.2 11 309 1,16 15. 13.9 12.7 1.6 3.7 Qatar 10,320 1.8. -1.1 128 3.6 5,393 0.2 0.3 -.0 1.6.0 Dubai 3,8 1. 5.2 10.6 83 301,39 0.1 2.2 1.3.3 Abu Dhabi,57 0.7 1.7 6.2 122 8 3,39 0.7 2.6 6.3 1.5 5.3 Kuw ait 5,386 0.2 0. -.1 79 66 5,86 0. 0.8 8.5. Oman 5,915 1.1 2. 9. 17 10 1,116-8.2 1.3. Bahrain 1,17 0.7-3. 18 1.1 9.8 NA NA 0..6 Dubai Activity Trend (Last 10 Days) Dubai Sector Performances Dubai Top Gainers / Losers 0.8 0. Turnover (LHS, AED bn) DFMGI Index (RHS) 3,500 3,50 3,00 3,350 3,300 3,250 3,200 3,150 1-3 DIB 5.56 3. 1.97 2 Dubai Invest 2.16 2. 27.07 2 Damac Properties 2.2 2.1 3.96 1 Drake & Scull Intl 0.57 1.8 1 ENBD 8.50 1.8 1.36 - Marka 1.16-1.7 3-1 Gulf Navigation - 0.73 Aramex 3.22-0.9 0.79 Dubai Parks 1.61-0.6 23.58 Shuaa Capital 0.65-0.6 1.3 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) 5,000,500,000 8.0 7.0.0 3.0-2 AD Nat (TAQA) 0.55 3.8 1.56 2 Etisalat 19.70 3.7 3.787 1 ADIsB 3.96 2.9 3.93 1 Methaq Takaful 0.82 2.5 5.827 Dana Gas 0.58 1.8 7.977 - -1 Intl Fish Farming 1.55-3.1 91 ADCB 2-2.3 2.187 Bank Of Sharjah 1.38-2.1 10 Alkhaleej Investment 1.85-2.1 01 Sharjah Islamic Bk 1.56-1.9 37 Qatar Activity Trend (Last 10 Days) Qatar Sector Performances Qatar Top Gainers / Losers 0.3 Turnover (LHS, QAR bn) DSM Index (RHS) 10,00 10,000 9,600 9,200.0 3.0 2 18.0 1 1 1 8.0.0 Qatar 78.80 5.2 0.13 Ooredoo 93.50 2.8 89 Ezdan Hold 18.90 2.7 0.56 Mazaya Qatar 13.79 2. 0.231 Barw a Real Est 3.15 2.3 0.32 Qatar Navigation 88.50-0.5 12 Al Meera Consumer 210-0. 15 Disclosures Please refer to the important disclosures at the back of this report.
-Jul 5-Jul 1 BSE Banks Hotel & Tourism Industries -Jul 1 -Jul 1 Thousands KSE Technology Investment Industrial Real estate Bank Fin. Parallel Telecom Consumer Basic material Oil&Gas Healthcare Kuwait Activity Trend (Last 10 Days) Kuwait Sector Performances Kuwait Top Gainers / Losers 1 12 10 8 6 2 0 Turnover (LHS, KWD mn) KWSEIDX Index (RHS) 5,395 5,390 5,385 5,380 5,375 5,370 5,365 5,360 5,355 5,350 2.5 1.5 0.5-0.5 - -1.5 United Real Estate 106 8.2 20 Automated Sys 365 7. 0.102 Safw an Trading 330.8 05 Injazzat Real State 72. 06 Soor Fuel Market 112 3.7 1.588 2 2 1 1 - -1-1 -2 Burgan Co For We 93-7.0 0 Kw t Real Estate Hldg 22-6. 0.100 Arkan Al Kuw ait 79-01 Osoul Investment 3.5-5. 00 Sultan Center Fd 57-0.129 Oman Activity Trend (Last 10 Days) Oman Sector Performances Oman Top Gainers / Losers 8 0 Turnover (LHS, OMR mn) MSM30 Index (RHS) 5,950 5,900 5,850 5,800 5,750 5,700 5,650-0.5 - -1.5-2.5 MSM 30 Bank Industry Sembcorp 0.227 1.3 52 - NBO 0.21 0.5 0.250-1 -1-2 -2 Gulf Invest Svcs 75-5.1 5 Oman Fisheries 0.106-2.8 0.7 Galfar Engineering 72-2.7 0.13 Ominvest 0.80 10 Al-Anw ar Ceramic 0.126-1.6 0.27 Bahrain Activity Trend (Last 10 Days) Bahrain Sector Performances Bahrain Top Gainers / Losers 1.8 1.6 1. 1.2 0.8 0.6 0. 0.2 - Turnover (LHS, BHD mn) BHSEASI Index (RHS) 1,180 1,160 1,10 1,120 1,100 1,080 3 2 2 1 1 -.0 - -8.0-1 -1 - BBK 0.360 8. 0.210 Seef Properties 0.208 6.1 80 Aluminium Bahrain 0.350 3.6 0.127 Ahli United Bk 0.60 0.8 0.15 Bahrain Telecom 0.308 0.7 16 NBB 0.710-2.7 79 Disclosures Please refer to the important disclosures at the back of this report. 5
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