TASI DESCENDS. Week Ending Aug 06, 2015

Transcription

1 Week Ending Aug 6, 215 The Islamic finance industry is heading towards higher degrees of Shari'ah governance with an increasing number of markets introducing independent external Shari'ah audit as a regulatory requirement. - Mr. Najib Al Aswad, Islamic Finance Advisory and Assurance Services, UK TASI DESCENDS Tadawul All Share Index (TASI) continued to trend lower during the week and decreased 4.9% to close at 8,655 points. The market seems to have negatively reacted to the drop in the oil prices and press reports suggesting that Saudi Arabia is reducing their crude oil price hikes in Asia in order to save market share. TASI tumbles 4.9% All regional indices except Bahrain (+.1%) and Abu Dhabi (.%) were lower. Saudi Arabia (-4.9%) declined the highest followed by Oman (-2.%) and Dubai (-.5%). Oil price drops towards six year low Oil prices dropped towards six-year low with the WTI crude trading below USD 45 per barrel. Apart from strong supply, weak Chinese consumption and expectation of lower demand in the US post summer are driving down oil prices. The price drop is beginning to hurt Saudi Arabia severely from all sides from current account balance and foreign exchange reserves to stock market and foreign inflows. The Kingdom has even issued its first debt, of USD 4bn, in eight years. Probably, OPEC got its strategy wrong when they decided not to reduce output which could thereby force shale producers out of business. SAMA stability report throws a clearer picture on what could have gone wrong by quoting it is becoming apparent that non-opec producers are not as responsive to low oil prices as had been thought, at least in the short-run. TASI CLOSE & MARKET TURNOVER 6, 8,87 8,821 8,769 5, TRADING STATISTICS 8,85 8,791 8,8 4, No change Total No. of Companies 15 8,75 3, 8,655 8,7 2, 8,65 1, 8,6 5,86 4,635 4,155 3,58 3,647 8,55 2-Aug-15 3-Aug-15 4-Aug-15 5-Aug-15 6-Aug-15 Total Turnover (SAR Mn) TASI Close (RHS) Gainers Losers Saudi market breadth was negative with 8 gainers as against 158 losing stocks

2 DAX FTSE 1 Nikkei MSCI World MSCI EM S&P 5 SSE DJIA Bahrain Abu Dhabi Kuwait Qatar Dubai Oman Saudi GLOBAL INDICES WEEKLY RETURNS 2.9%, 11, %, 6,747.7%, 2,664.1%, 1,333 %, 4, %, 1,753-1%, %, 2,84-1.2%, 3, %, 17,42 -.1%, 6, %, 11,77 -.5%, 4,123-2%, 6,43-4.9%, 8,655 Note: Weekly returns are calculated considering Friday to Thursday week. Numbers indicate weekly returns and index closing values. SAUDI SECTOR INDICES All 15 sector indices closed the week in Red All the sector indices continued its downward movement and closed the week in negative territory in line with the broader market momentum. Transport index declined the highest by 8.7% during the week. This was followed by Building & Construction (-7.4%) and Telecom & IT (-7.1%). The index heavy weights Banks & Petrochemicals decreased 4.% and 6.7% respectively. Petrochemicals was the top traded sector and constituted 27.6% of the total value and 21.% to the total volume. Banks & Financial services contributed 14.7% to total value and 17.% to the total volume. Index Open Close WTD YTD Total Volume (Mn) Total Turnover (SAR Mn) No. of Trades TASI 9,98 8, % 3.9% 782 2,581 44,162 Banks & Financial Services 2,252 19,438-4.% 6.1% 137 3,615 48,291 Petrochemical Industries 6,198 5, % -1.3% 12 3,988 56,984 Cement 6,614 6, % -8.6% ,124 Retail 16,729 16, % 3.9% ,73 Energy & Utilities 6,642 6, % 15.3% ,131 Agriculture & Food Industries 11,676 11, % -3.2% ,497 Telecom & IT 1,79 1, % -14.4% 84 1,543 29,3 Insurance 1,657 1, % 21.5% 1 2,94 97,56 Multi-Investment 4,292 4,57-5.5% 1.3% ,571 Industrial Investment 8,36 7, % 18.2% 32 1,216 3,375 Building & Construction 3,474 3, % -2.6% ,552 Real Estate Development 7,57 7,26-3.3% 22.7% 138 1,885 36,58 Transport 9,637 8, % 21.5% 23 1,231 24,921 Media and Publishing 2,27 2, % -2.4% ,27 Hotel & Tourism 22,688 21, % 1.5% ,627

3 THIS WEEK S WINNERS & LOSERS Top Gainer Al Alamiya for Cooperative Insurance Co. (+8.%) Al Alamiya for Cooperative Insurance Company increased by 8.% and topped the gainers table. Al Alamiya closed at SAR and has gained 7.7% till date. This was followed by Alinma Tokio Marine Company (+7.7%) and National Medical Care Company (+4.%). The Mediterranean & Gulf Insurance & Reinsurance Co. (-24.6%) was the highest loser followed by Etihad Etisalat Co (-14.5%) and Astra Industrial Group (-14.4%) Top Loser The Mediterranean & Gulf Insurance & Reinsurance Co (-24.6%) SABIC, the gulf s largest company, lost 6.19% for the week and clocked a turnover of SAR 2.35bn. SABIC has gained 8.73% YTD to close at SAR TOP GAINERS Company Close WTD YTD Value Traded (SAR Mn) Al Alamiya % 7.7% 192 Alinma Tokio M % 27.6% 7 Care % 16.9% 173 Trade Union % 1.4% 81 SCC % -1.7% 42 TOP LOSERS Company Close WTD YTD Value Traded (SAR Mn) MEDGULF % -35.1% 59 Etihad Etisalat % -34.2% 855 Astra Indust % -6.4% 126 ADC % -1.% 163 Petrochem % 3.7% 78 THE LIQUIDITY PLAY (VOLUME VALUE TREND) Market activity increased during the week and traded 782mn shares (686mn and 266mn shares in the preceding two weeks). However, the turnover decreased during the week to SAR 2.6bn vis-a-vis SAR 21.2bn and SAR 8.1bn in the preceding two weeks. TASI WEEKLY TURNOVER TREND (SAR MN) TASI WEEKLY VOLUME TREND (MN) 7, 25 6, 5, 4, , 2, 1, 1 5 6/Aug 5/Aug 4/Aug 3/Aug 2/Aug 3/Jul 29/Jul 28/Jul 27/Jul 26/Jul 23/Jul 22/Jul 15/Jul 14/Jul 13/Jul 12/Jul 6/Aug 5/Aug 4/Aug 3/Aug 2/Aug 3/Jul 29/Jul 28/Jul 27/Jul 26/Jul 23/Jul 22/Jul 15/Jul 14/Jul 13/Jul 12/Jul Week Week 1 Week 2 Week 3 Week Week 1 Week 2 Week 3

4 SAUDI CORPORATE & ECONOMIC NEWS The expansion of Saudi Arabia s non-oil economy recorded by the headline Emirates NBD Saudi Arabia PMI posted 57.7 in July, up from 56.1 in June. Saudi Arabia's central bank has tightened restrictions on cash withdrawals from banks using credit cards. Previously, under an informal industry arrangement customers could obtain cash advances equivalent to as much as 5% of their monthly credit card spending limits. The solar-power plant "Layla" in Aflaj province will be opened shortly, the chairman of Saudi Electricity Company said. Ministry of Health is set to increase the number of beds in all private sector hospitals, as per new implementation regulations adopted this year. The Human Resource Development Fund has awarded a grant worth SAR 9, to Mondez Arabia, a subsidiary of Mondez International, for its continued commitment to training and development of Saudi Arabian nationals. National Water Co. has completed a water network project in Taif as part of Taif's infrastructural development plan. The Makkah governorate has announced four new road projects linking Makkah and Jeddah. Municipal and Rural Affairs has approved contracts worth SAR 1.59bn to implement 168 municipal projects in 14 governorates. Sadara Chemical Company and E. A. Juffali & Brother, Saudi Arabia have signed an agreement for supply of methylene diphenyl diisocyanate (MDI) to a new Juffali chemical production facility. Saudi British Bank has signed SAR 187mn cooperation agreement with the Saudi Fund for Development. Etihad Atheeb Telecom has repaid SAR 886.7mn as a portion of its loan to Banque Saudi Fransi. Herfy Food Services Co. has opened seven new restaurants in several areas across the Kingdom during July. Sanad Cooperative Insurance and Reinsurance Co. has completed the regulatory procedures to change its brand into Sanad for Cooperative Insurance. A development holding company is set to launch several projects in Al-Baha region, which will include resorts, hotels and malls at a total value of nearly SAR 1bn. The shareholders of National Company for Glass Industries has given go-ahead for buying the partners 5% stake in Saudi National Lamps and Electricals Co. The Kingdom of Saudi Arabia has decided to sign a memorandum of understanding on Foreign Office Consultations with Bangladesh.

5 OTHER GULF NEWS GLOBAL ECONOMIC NEWS The seasonally adjusted Emirates NBD UAE Purchasing Managers Index, which covers manufacturing and services, rose to 55.8 points last month from 54.7 in June. Al Hassan Engineering Co., Abu Dhabi received a letter of intent for instrumentation works worth USD 9mn from Hyundai Engineering and Construction Co. RAK Ceramics, UAE acquired the 2% share in RAK Iran and is now a wholly owned subsidiary of RAK Ceramics. A consortium led by Italy's Saipem has submitted the lowest offer in a bid for work on Kuwait's planned Al-Zour refinery. The consortium has submitted an offer for about KWD 475mn. Oman s budget deficit for the first 5 months of 215 surged ahead to OMR 1,51mn, against a surplus of OMR 233mn for the same period of 214, National Centre for Statistics and Information reported. Combined Group Contracting company has received a tender worth AED 16.98mn from by Mohammed bin Rashid Housing Establishment in Dubai. Kuwait Oil Company has renewed National Petroleum Services Company s contract for USD 79.96mn. Separately, KOC has awarded a contract worth KWD 63.37mn to Contracting and Marine Services, subsidiary of Kuwait Drilling Co. Al Ahli Bank of Kuwait obtained the approval of Central bank of Egypt to acquire a 98.5% stake in Piraeus Bank Egypt. Trade deficit in the U.S. widened in June to USD 43.8bn, Commerce Department figures showed. UK s Markit/CIPS manufacturing PMI rose to 51.9 in July from 51.4 in June. Separately, UK industrial production dipped.4% on the month, the Office for National Statistics said. Mortgage-finance company Fannie Mae will pay USD 4.4bn to Treasury Department in September. German manufacturing orders increased by 2.% in June from the previous month. E.ON, Germany has agreed to sell the hydroelectric complex in Terni, Italy for around EUR 1bn to ERG Power Generation SA. CF Industries Holdings Inc., North American fertilizer company has agreed to buy European and North American assets of OCI NV, Netherlands for about USD 8bn. William Ackman has built a stake worth about USD 5.5bn in Mondelez International Inc, the maker of Cadbury chocolate and Oreo cookies, in what is seen as an attempt to push the company to boost earnings or sell itself. PE firm Blackstone has reportedly joined forces with buyout fund Hellman & Friedman to bid for British payments processing company Worldpay. IBM Corp said it would buy medical image company Merge Healthcare Inc in a USD 1bn deal and combine it with its newly formed health analytics unit. A venture between Qatari Diar Real Estate Investment Co and Canary Wharf Group agreed to sell two office buildings in London s South Bank district to Almacantar for more than GBP 55mn. Jaidah Automotive, Qatar has entered into a new deal with Pearl Limousine private transport company valued at approximately QAR 1.5mn.

6 C H A R T S O F T H E W E E K SAUDI ARABIA CURRENT ACCOUNT BALANCE (USD) Source: Zero Hedge ENTERPRISE VALUE PER EMPLOYEE (US MN) Source: DataStream

7