` Market Review and Outlook The Qatar Stock Exchange (QSE) Index decreased 438.98 points or 4.44% during the trading week to close at 9,447.88 during the trading week. Market capitalization decreased by 5.0% to QR519.5 billion (bn) versus QR547.0bn at the end of the previous trading week. Of the 45 listed companies, 3 companies ended the week higher, while 39 declined and 3 remained unchanged. Widam Food Co. (WDAM) was the best performing stock for the week with a gain of a 1.9% on 39,914 shares traded. On the other hand, Ezdan Holding Group (ERES) was the worst performing stock for the week with a decline of 15.4% on 2.9 million (mn) shares traded. QNB Group (QNBK), Qatar Islamic Bank (QIBK) and Industries Qatar (IQCD) were the primary contributors to the weekly index loss. QNBK was the biggest contributor to the index s weekly decrease, deleting 107.5 points from the index. QIBK was the second biggest contributor to the mentioned decrease, removing 82.4 points from the index. Moreover, IQCD shaved off 53.3 points from the index. On the other hand, there were no gainers in the index. Trading value during the week decreased by 32.2% to QR687.8mn versus QR1.0bn in the prior week. The Banks and Financial Services sector led the trading value during the week, accounting for 49.1% of the total trading value. The Industrial sector was the second biggest contributor to the overall trading value, accounting for 18.3% of the total trading value. QNB Group (QNBK) was the top value traded stock during the week with total traded value of QR168.5mn. Trading volume decreased by 40.4% to reach 22.8mn shares versus 38.2mn shares in the prior week. The number of transactions declined by 20.5% to reach 14,691 transactions versus 18,470 transactions in the prior week. The Real Estate sector led the trading volume, accounting for 26.8%, followed by the Banks and Financial Services sector which accounted for 26.5% of the overall trading volume. Ezdan Holding Group (ERES) was the top volume traded stock during the week with 2.8mn shares. Foreign institutions remained bullish with net buying of QR5.3mn vs. net buying of QR147.9mn in the prior week. Qatari institutions remained bearish with net selling of QR58.7mn vs. net selling of QR96.6mn in the week before. Foreign retail investors remained bearish with net selling of QR5.4mn vs. net selling of QR17.7mn in the prior week. Qatari retail investors turned bullish with net buying of QR47.9mn vs. net selling of QR33.5mn the week before. Foreign institutions bought (net basis) ~$1.6bn worth of Qatari equities YTD. QSE Index and Volume 9,700 9,550 9,400 Market Indicators Week ended Aug 16, 2018 Week ended Aug 09, 2018 Chg. % Value Traded (QR mn) 687.8 1,014.5 (32.2) Exch. Market Cap. (QR mn) 519,461.2 547,045.9 (5.0) Volume (mn) 22.8 38.2 (40.4) Number of Transactions 14,691 18,470 (20.5) Companies Traded 44 44 0.0 Market Breadth 3:39 20:23 Market Indices Close WTD% MTD% YTD% Total Return 16,646.12 (4.4) (3.8) 16.5 ALL Share Index 2,751.70 (5.2) (3.4) 12.2 Banks and Financial Services 3,326.41 (5.6) (5.5) 24.0 Industrials 3,083.07 (3.3) (2.6) 17.7 Transportation 1,999.24 (1.5) (0.4) 13.1 Real Estate 1,718.44 (10.7) 0.4 (10.3) Insurance 3,059.17 (3.8) (1.7) (12.1) Telecoms 986.62 (3.7) (2.3) (10.2) Consumer Goods & Services 6,140.09 (1.8) (2.5) 23.7 Al Rayan Islamic Index 3,729.47 (3.8) (3.4) 9.0 Market Indices Weekly Index Performance 2.0% 0.0% (2.0%) (4.0%) (6.0%) 9,635.00 9,556.64 9,638.60 9,592.23 12-Aug 13-Aug 14-Aug 15-Aug 16-Aug 0.7% Abu Dhabi (0.2%) Bahrain (0.9%) Oman Volume (1.4%) Kuwait QSE Index 9,447.88 (3.8%) (4.0%) (4.4%) Saudi Arabia Dubai Qatar (QSE)* 6,000,000 3,000,000 0 Regional Indices Close WTD% MTD% YTD% Weekly Exchange Traded Value ($ mn) Exchange Mkt. Cap. ($ mn) TTM P/E** P/B** Dividend Yield Qatar (QSE)* 9,447.88 (4.4) (3.8) 10.8 188.44 142,644.1 14.0 1.4 4.6 Dubai 2,803.32 (4.0) (5.2) (16.8) 243.88 101,175.3 # 7.5 1.0 6.0 Abu Dhabi 4,906.87 0.7 1.0 11.6 223.85 132,349.8 12.9 1.5 4.9 Saudi Arabia # 7,865.68 (3.8) (5.2) 8.8 4,533.34 498,146.3 17.2 1.8 3.6 Kuwait 4,894.32 (1.4) (0.8) 1.4 267.10 33,732.8 14.7 0.9 4.2 Oman 4,390.45 (0.9) 1.2 (13.9) 21.22 18,688.3 8.9 0.9 6.2 Bahrain 1,347.47 (0.2) (0.8) 1.2 17.88 20,619.9 8.9 0.9 6.1 Source: Bloomberg, country exchanges and Zawya (** Trailing Twelve Months; * Value traded ($ mn) do not include special trades, if any; # Data as of August 15, 2018) Page 1 of 6
News Economic & Market News Qatar s macroeconomic environment tops the MENA region Qatar s macroeconomic environment remains solid as it secured the first place in the entire MENA region, a joint study by the World Bank Group and World Economic Forum showed. Globally, Qatar s macroeconomic environment has 20th position, the joint study revealed. Qatar is also the secondmost competitive economy in the Arab world, and 25th globally, the World Bank Group and World Economic Forum stated. Qatar s solid macroeconomic environment was despite the drop in oil and gas prices having a significant effect on the country s fiscal situation, which moved from a fiscal surplus of 10.3% (in 2015) to a deficit of 4.1% of GDP (2016), while public debt increased from 35.8% to 47.6% of GDP in the same years. According to the World Bank Group and World Economic Forum, Qatar s strengths lies in its solid infrastructure facilities and efficient goods markets. Going forward, it stated the country will have to ensure better access to digital technologies for individuals and businesses, and further strengthen educational institutions. (Gulf-Times.com) Qatar s current account balance swings back to surplus Qatar s current account balance recorded a surplus of QR23.4bn in 2017, in contrast to a deficit of QR30.1bn in 2016. The recovery in global energy prices enabled the turnaround in the current account balance and restored the surplus position that Qatar had maintained for nearly two decades prior to 2016. As a percentage of GDP, the surplus stood at 3.8% in 2017 as against a deficit of 5.4% in 2016, according to the Qatar Central Bank. Within the current account, the trade (goods) account surplus increased to QR133.7bn in 2017, a sharp increase of 44.8% from the surplus of QR92.4bn in 2016. Deficit in the services account continued, but at QR49.9bn showed a significant decline of 16.2% from the deficit of QR59.6bn in 2016. Deficit in the income account also recorded a sharp fall, while deficit in the transfers account remained flat at QR58.8bn in 2017 compared to QR58.9bn in the previous year. Increase in trade surplus is followed from a combination of a sharp rise in exports and contraction in imports. While exports grew by 17.8% to QR245.7bn driven by hydrocarbon exports, imports declined by 3.7% to QR112bn on an annual basis. (Peninsula Qatar) Qatar s non-oil exports hit QR11.5bn in 1H2018 Despite the ongoing blockade against Qatar imposed by the Arab quartet, the combined value of country s non-oil exports in 1H2018 reached QR11.5bn, registering a sharp increase of 33.7% compared to QR8.6bn witnessed during 1H2017. The total value of non-oil exports for the month of June reached QR1.65bn recording a remarkable increase of 108% compared to QR794mn in June 2017, according to a report released by Qatar Chamber on the foreign trade of the private sector. Qatar Chamber s Director General, Saleh Bin Hamad Al Sharqi said, After one year of the unjust siege imposed on Qatar, the monthly data and statistics of our exports, which indicates the continuous growth, confirm that the exports were not affected by the blockade. Al Sharqi noted the expansion of the list of markets receiving non-oil exports in terms of number and volume of their imports, which is another proof of the quality of the products that constitute the strength of these exports. (Peninsula Qatar) Qatar s economy shows signs of strength; construction sector grows significantly Qatar s economy has shown signs of strength in recent months, a recent report stated and noted that the country s construction activity increased significantly as preparations continued for the 2022 World Cup. In May, the merchandise trade surplus grew by nearly 40% YoY due to increased energy exports, according to FocusEconomics. This highlights the resilience of the external sector, given that Qatar continues to face a trade embargo from several of its neighbors, led by Saudi Arabia. Moreover, in June, business conditions improved in the non-oil and gas private sector for the eleventh consecutive month, FocusEconomics stated. Although the economy expanded at a weak pace in the first three months of 2018, due to a decrease in mining and quarrying output, construction activity increased significantly as preparations continued for the 2022 World Cup. Qatar s economy this year should be supported by higher oil prices, economic reforms and the government s infrastructure investment push in preparation for the 2022 World Cup. FocusEconomics panelists forecasted a growth of 2.6% in 2018, which is down by 0.2 percentage point from last month s projection, and 2.8% again in 2019. (Gulf-Times.com) MRDS reports QR22.53mn net profit in 2Q2018 Mazaya Qatar Real Estate Development (MRDS) recorded net profit of QR22.53mn in 2Q2018 as compared to net profit of QR8.43mn in 2Q2017 and net loss of QR6.32mn in 1Q2018. EPS amounted to QR0.140 in 1H2018 as compared to QR0.116 in 1H2017. In 1H2018, MRDS reported net profit of QR16.21mn as compared to QR13.45mn for the period of the previous year. (QSE) ZHCD posts 0.7% YoY decrease but 30.6% QoQ rise in net profit in 2Q2018 Zad Holding Company s (ZHCD) net profit declined 0.7% YoY to QR64.99mn in 2Q2018. However, on QoQ basis, net profit rose 30.6%. The company s operating revenue came in at QR262.97mn in 2Q2018, which represents a decrease of 7.4% YoY (-9.9% QoQ). In 1H2018, ZHCD reported net profit of QR114.75mn as compared to QR114.69mn in 1H2017. EPS came in flat YoY at QR4.84 in 1H2018. (QSE) IGRD s EGM approves the purchase of the remaining shares in Consolidated Engineering Systems Investment Holding Group (IGRD) announced the results of its Extra Ordinary General Assembly Meeting (EGM), which was held on August 8, 2018 and approved the following resolutions: 1) The Purchase of the remaining shares (39.6%) in Consolidated Engineering Systems, on a cash basis. 2) Authorizing the board of directors to take a bank loan of an amount of one hundred million Qatari Riyals to pay a part of the value of the proposed shares. 3) Mandating Chairman, singly, or, any two of the board members, jointly, to sign on the official procedures necessary for the execution of the purchase, including signing and authenticating the purchase agreements, signing the extraordinary general assemblies of the company purchasing or being purchased, amendments to the articles of association, bank loan, and all necessary procedures. (QSE) Page 2 of 6
Qatar Stock Exchange Top Gainers Top Decliners 3.0% 0.0% 2.0% 1.9% -6.0% -7.8% -7.5% -6.3% -6.1% 1.0% 0.6% -12.0% 0.3% 0.0% Widam Food Company Zad Holding Company Qatar Industrial Manufacturing Co. -18.0% -15.4% Ezdan Holding Group Qatar Cinema & Film Distribution Co. Qatar Islamic Bank QNB Group Vodafone Qatar Most Active Shares by Value (QR Million) Most Active Shares by Volume (Million) 180.0 168.5 3.0 2.9 2.8 2.3 120.0 2.0 2.0 60.0 63.1 61.4 46.0 34.4 1.0 1.2 0.0 QNB Group Industries Qatar Qatar Islamic Bank The Commercial Bank Qatar Gas Transport Co. Ltd. 0.0 Ezdan Holding Group Vodafone Qatar Mazaya Qatar Real Estate Dev. Qatar Gas Transport Co. Ltd. Investment Holding Group Investor Trading Percentage to Total Value Traded Net Traded Value by Nationality (QR Million) 100% 80% 43.75% 42.97% Non-Qatari 11 376 386 60% 12.43% 11.64% 40% 20% 8.79% 35.03% 17.32% 28.07% (11) Qatari 312 0% Buy Sell 301 Qatari Individuals Non-Qatari Individuals Qatari Institutions Non-Qatari Institutions (100) - 100 200 300 400 500 Net Investment Total Sold Total Bought Page 3 of 6
TECHNICAL ANALYSIS OF THE QSE INDEX Source: Bloomberg The General Index closed down 4.4% from the previous week on profit booking. Furthermore, correction expected over the Index. However, we believe that the Index should move towards Fibonacci retracement level of 38.2%. DEFINITIONS OF KEY TERMS USED IN TECHNICAL ANALYSIS RSI (Relative Strength Index) indicator RSI is a momentum oscillator that measures the speed and change of price movements. The RSI oscillates between 0 to 100. The index is deemed to be overbought once the RSI approaches the 70 level, indicating that a correction is likely. On the other hand, if the RSI approaches 30, it is an indication that the index may be getting oversold and therefore likely to bounce back. MACD (Moving Average Convergence Divergence) indicator The indicator consists of the MACD line and a signal line. The divergence or the convergence of the MACD line with the signal line indicates the strength in the momentum during the uptrend or downtrend, as the case may be. When the MACD crosses the signal line from below and trades above it, it gives a positive indication. The reverse is the situation for a bearish trend. Candlestick chart A candlestick chart is a price chart that displays the high, low, open, and close for a security. The body of the chart is portion between the open and close price, while the high and low intraday movements form the shadow. The candlestick may represent any time frame. We use a one-day candlestick chart (every candlestick represents one trading day) in our analysis. Doji candlestick pattern A Doji candlestick is formed when a security's open and close are practically equal. The pattern indicates indecisiveness, and based on preceding price actions and future confirmation, may indicate a bullish or bearish trend reversal. Shooting Star/Inverted Hammer candlestick patterns These candlestick patterns have a small real body (open price and close price are near to each other), and a long upper shadow (large intraday movement on the upside). The Shooting Star is a bearish reversal pattern that forms after a rally. The Inverted Hammer looks exactly like a Shooting Star, but forms after a downtrend. Inverted Hammers represent a potential bullish trend reversal. Page 4 of 6
Company Name Price August 16 % Change WTD % Change YTD Market Cap. QR Million TTM P/E P/B Div. Yield Qatar National Bank 163.52 (6.29) 29.77 151,034 11.8 2.3 3.7 Qatar Islamic Bank 124.00 (7.46) 27.84 29,300 12.4 2.0 4.0 Commercial Bank of Qatar 39.04 (5.24) 35.09 15,800 15.2 1.0 2.6 Doha Bank 25.59 (2.22) (10.21) 7,934 11.9 0.9 11.7 Al Ahli Bank 30.11 (2.87) (18.91) 6,334 9.6 1.2 3.2 Qatar International Islamic Bank 56.17 (1.46) 2.88 8,502 10.0 1.6 7.1 Masraf Al Rayan 36.74 (4.55) (2.68) 27,555 13.3 2.2 5.4 Al Khalij Commercial Bank 11.00 0.00 (22.54) 3,960 7.8 0.7 6.8 Qatar First Bank 5.12 (1.16) (21.59) 1,024 N/A 0.9 N/A National Leasing 9.22 (3.46) (13.91) 456 28.3 0.5 5.4 Dlala Holding 14.52 (2.16) (1.22) 413 76.3 1.8 N/A Qatar & Oman Investment 6.08 (1.30) (23.04) 192 45.2 0.7 8.2 Islamic Holding Group 27.01 (3.88) (27.97) 153 N/A 1.1 N/A Banking and Financial Services 252,658 Zad Holding 90.50 0.56 22.90 1,302 11.1 1.5 6.5 Qatar German Co. for Medical Devices 5.16 (0.96) (20.12) 60 N/A 1.2 N/A Salam International Investment 5.17 (0.96) (24.96) 591 N/A 0.4 N/A Medicare Group 66.88 (1.63) (4.25) 1,882 23.3 2.0 2.7 Qatar Cinema & Film Distribution 16.13 (7.83) (35.48) 101 14.3 0.8 6.2 Qatar Fuel 141.45 (2.11) 38.59 14,064 12.9 2.1 5.7 Widam Food Co. 69.01 1.94 10.42 1,242 10.8 3.8 6.2 Mannai Corp. 50.00 (2.91) (15.97) 2,281 4.5 0.9 8.0 Al Meera Consumer Goods 155.00 (2.52) 6.97 3,100 16.8 2.4 5.5 Consumer Goods and Services 24,623 Qatar Industrial Manufacturing 40.10 0.25 (8.24) 1,906 9.5 12.5 7.5 Qatar National Cement 55.75 (2.19) (11.37) 3,643 11.1 1.2 8.1 Industries Qatar 119.52 (3.61) 23.22 72,310 17.1 2.1 4.2 Qatari Investors Group 30.74 (4.80) (16.01) 3,822 16.1 1.4 2.4 Qatar Electricity and Water 188.19 (3.44) 5.72 20,701 12.8 2.2 4.1 Aamal 9.99 (1.28) 15.09 6,294 12.9 0.8 6.0 Gulf International Services 16.86 (3.66) (4.75) 3,133 30.4 0.9 N/A Mesaieed Petrochemical Holding 15.55 (3.72) 23.51 19,536 15.2 1.4 4.5 Invesment Holding Group 5.42 0.00 (11.15) 450 10.5 0.5 10.1 Industrials 131,794 Qatar Insurance 35.41 (5.32) (21.70) 11,292 56.0 1.5 3.7 Doha Insurance 12.60 (5.90) (10.00) 630 14.6 0.6 6.0 Qatar General Insurance & Reinsurance 50.00 0.00 2.04 4,375 13.6 0.7 4.5 Al Khaleej Takaful Insurance 10.23 (2.57) (22.73) 261 42.4 0.5 4.9 Qatar Islamic Insurance 53.45 (0.28) (2.77) 802 12.0 2.4 6.5 Insurance 17,361 United Development 13.99 (1.96) (2.71) 4,954 9.6 0.5 8.9 Barw a Real Estate 35.01 (4.58) 9.41 13,623 8.5 0.7 7.1 Ezdan Real Estate 9.31 (15.36) (22.93) 24,695 25.3 0.8 N/A Mazaya Qatar Real Estate Development 6.92 (5.98) (23.11) 801 26.0 0.5 N/A Real Estate 44,073 Ooredoo 70.00 (2.11) (22.87) 22,422 14.4 1.0 5.0 Vodafone Qatar 8.70 (6.05) 8.48 7,355 N/A 1.6 N/A Telecoms 29,777 Qatar Navigation (Milaha) 65.15 (0.55) 16.46 7,461 14.8 0.5 5.4 Gulf Warehousing 40.50 (3.34) (7.93) 2,373 10.5 1.5 4.2 Qatar Gas Transport (Nakilat) 16.86 (1.81) 4.72 9,341 10.6 1.5 5.9 Transportation 19,176 Qatar Exchange 519,461 Source: Bloomberg Page 5 of 6
Contacts Saugata Sarkar, CFA, CAIA Shahan Keushgerian Zaid al-nafoosi, CMT, CFTe Head of Research Senior Research Analyst Senior Research Analyst Tel: (+974) 4476 6534 Tel: (+974) 4476 6509 Tel: (+974) 4476 6535 saugata.sarkar@qnbfs.com.qa shahan.keushgerian@qnbfs.com.qa zaid.alnafoosi@qnbfs.com.qa QNB Financial Services Co. W.L.L. Contact Center: (+974) 4476 6666 PO Box 24025 Doha, Qatar Disclaimer and Copyright Notice: This publication has been prepared by QNB Financial Services Co. W.L.L. ( QNBFS ) a wholly-owned subsidiary of Qatar National Bank (Q.P.S.C.). QNBFS is regulated by the Qatar Financial Markets Authority and the Qatar Exchange. Qatar National Bank (Q.P.S.C.) is regulated by the Qatar Central Bank. This publication expresses the views and opinions of QNBFS at a given time only. It is not an offer, promotion or recommendation to buy or sell securities or other investments, nor is it intended to constitute legal, tax, accounting, or financial advice. QNBFS accepts no liability whatsoever for any direct or indirect losses arising from use of this report. Any investment decision should depend on the individual circumstances of the investor and be based on specifically engaged investment advice. We therefore strongly advise potential investors to seek independent professional advice before making any investment decision. Although the information in this report has been obtained from sources that QNBFS believes to be reliable, we have not independently verified such information and it may not be accurate or complete. QNBFS does not make any representations or warranties as to the accuracy and completeness of the information it may contain, and declines any liability in that respect. For reports dealing with Technical Analysis, expressed opinions and/or recommendations may be different or contrary to the opinions/recommendations of QNBFS Fundamental Research as a result of depending solely on the historical technical data (price and volume). QNBFS reserves the right to amend the views and opinions expressed in this publication at any time. It may also express viewpoints or make investment decisions that differ significantly from, or even contradict, the views and opinions included in this report. This report may not be reproduced in whole or in part without permission from QNBFS COPYRIGHT: No part of this document may be reproduced without the explicit written permission of QNBFS. Page 6 of 6