Index Performance MSM30 Financial Industrial Current Week Previous Week WTD (%) YTD (%) Beta (5 Yr) 5,758.92 5,848.66 1.53% 14.74% 1.000 6,281.02 6,433.02 2.36% 24.50% 1.069 6,413.61 6,582.73 2.57% 12.22% 0.980 Service 2,462.68 2,471.64 0.36% 8.98% 0.814 MSM slide continues amidst low volumes August 6, 2011 Despite resolution of US Debt ceiling issue in the week gone by, weakening health of global economy had a negative impact on the performances of equity markets all over. The MSM Index closed the week lower by 1.53% at 5758.92 points. This level of MSM marks a two year low. From among the sectoral indices, the Financial Index closed the week lower by 2.36%. The Industrial Index ended the week with loss of 2.57%. The Services Index too ended the week in red by 0.36%. MSM 30 Index Performance Vs Turnover (RO '000s) 2, 1, 28 Jul 31 Jul 1 Aug 2 Aug 3 Aug 4 Aug Turnover ('000s) 2,072 1,658 1,395 1,717 1,605 1,318 MSM 30 Index 5,849 5,808 5,832 5,812 5,758 5,759 5,900 5,850 5,800 5,750 5,700 A total of 18.8 million shares got traded during the week amounting to an aggregate turnover of RO 7.693 million as compared to RO 10.838 million in the previous week. In terms of investor participation, Foreign Investors emerged as net buyers during the week to an extent of RO 525K. GCC Investors emerged as net sellers to an extent of RO 467K during the week. Bank Nizwa gears up to open doors early As per the executive president of CBO, Oman s first Islamic bank, the Bank Nizwa is expected to start operation by towards the end of 2011 or early next year with a capital of RO150 million. Of this, 40% will be offered to the public through an IPO. CBO is working on formulating a separate regulation for Islamic banks. Existing banks, intending to start window operation for Sharia compliant products, can offer them through an existing branch and there is no need for opening an exclusive branch. (Source: Times of Oman) Outlook for the upcoming week MSM Weekly Trading Activity Total Turnover RO 7.693 million Fig. In RO Buy Sell Net Buy / (Sell) Omanis 5,416,795 5,416,372 423 GCC 515,977 982,557 (466,581) Arabs 117,920 176,890 (58,970) Others 1,642,442 1,117,313 525,128 Post downgrading of the credit rating of United States from AAA to AA+ by S&P, we expect the global equities and commodities to continue their volatile run during the upcoming week. GBCM Research anticipates the local equities to open gap down in tomorrow s trading session and see a wave of panic selling by the traders. With the Omani equity markets already underperformed during the current year, we believe that the anticipated decline due to global uncertainties could be taken as an accumulation strategy for the long only funds. We also expect the Q2 2011 Earnings of index heavyweights Omantel, Renaissance and Galfar Engineering during the week. Page 1
Value Leaders Weekly Top five Gainers/ Losers for the Week 2, 35% 1, 0 29.67% 12.35% 10.19% 5.60% 4.43% Bank Muscat Renaissance Nawras Omantel Al Anwar Cer 30% 25% 20% 15% 10% 5% 0% 8.33% 3.23% 2.50% 2.31% 1.52% Uni Power Nat Min Water Acwa Power Taageer Fin Transgulf Inv Hldg Fin Service Gulf Int Chem Al Sharqia Inv Hldg Al Hassan Eng ONIC 8.33% 8.90% 9.62% 9.83% 10.60% Volume Leaders Weekly MSM Sectoral Market cap for the week 3, 3,000 2, 1, 0 16.78% Bank Muscat 6.85% 6.67% 6.40% Transgulf Inv Hldg 6.24% Bank Sohar Al Anwar Cer Renaissance 24% 21% 18% 15% 12% 9% 6% 3% 0% Power Utilities, 2.1% Telecom, 18.2% Oil Marketing, 6.1% Other Industry, 10.1% Engg & Const., 2.3% Other Services, 8.5% Cement, 5.7% Brokerage, 0.5% Banking, 38.7% Investments, 4.5% Leasing, 2.3% Insurance, 0.9% Page 2
MSM Value Indicators Value Indicators Mkt. Cap (In RO 000s) PER P/BV Dividend Yield (%) MSM 30 5,345,023 10.9 1.7 5.1% Financial 2,877,962 11.9 1.4 3.6% Industrial 829,832 12.6 1.5 5.8% Service 2,088,582 9.5 2.1 6.8% Oman Weekly News watch Ahli Bank announced net profit of RO 8.70 million for the six months ended June 2011 as against RO 6.76 million in the same period last year. The Bank s total assets as at the end of June 2011 reached RO 880 Million representing a growth of 37% from June 2010. (Source: MSM) Oman International Bank announced net profit of RO 8.376 million for the six months ended June 2011 as against RO 9.225 million in the same period last year. (Source: MSM) Oman Investment & Finance announced net profit of RO 663K for the three months ended June 2011 as against RO 664K in the same period last year. (Source: MSM) GCC Market Performance for the week 2.00% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% Oman Saudi UAE (DFM) UAE (Abu Dhabi) Kuwait Qatar Bahrain YTD 14.74% 2.97% 5.48% 1.80% 12.79% 2.20% 10.56% WTD 1.53% 0.33% 2.33% 1.63% 0.50% 1.36% 1.34% Source: Zawya, GBCM Research 1.00% 0.50% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% Bank Muscat SAOG raised US$ 300 million from a three year term loan to fund its business. The debt pays interest at 150 basis points more than the London interbank offered rate. Bank of America Merrill Lynch, Commerzbank, Credit Agricole CIB, HSBC Holdings Plc, Standard Chartered Plc and Wells Fargo & Co. arranged the transaction. (Source: Bloomberg) GCC Weekly News watch Dubai Islamic Bank, or DIB, announced its first half net profit rose 10% to Dhs 552 million due to a sharp increase in customer deposits despite higher provisions. The customer deposits stood at Dhs 77.6 billion as of June 30, reflecting a 22% increase from December 31, while total assets rose 14% to Dhs 102.9 billion during the same period. (Source: Gulf Base) Zain Group posted a net income of KD 140.2 million (US$ 506.5 million) for the first half of this year, a 17% increase over the same period last year. The group recorded consolidated revenue of KD 659.4 million, reflecting a positive 2% increase on the same period in H1 2010. (Source: Trade Arabia) Masraf Al Rayan has reported a 14% growth in its net profit to QR 691 million in the first six months of this year. EPS reached QAR0.92, compared with QAR0.81 in the first six months of 2010. Total assets amounted to QAR48.93 billion at the end of June, up from QAR29.07 billion in the same period last year. Total shareholder equity rose by 20% YoY to QAR7.82 billion. The customer deposits rose 84% to QAR40.6 billion during the period under review. (Source: Zawya, Gulf Base) Page 3
Crude Oil Performance (One Year) 125 125 115 115 105 105 95 95 85 85 75 75 65 65 55 55 45 45 30 Jul 10 20 Sep 10 11 Nov 10 2 Jan 11 23 Feb 11 16 Apr 11 7 Jun 11 29 Jul 11 World Crude Oman Crude Gold YTD Performance (YTD) Weekly Commodities Tracker Crude Oil Crude oil futures prices finished slightly higher on the last trading day, after signs of progress in Europe's debt crisis vaulted markets into positive territory late in the day. Oil prices spent much of the day in negative territory, gripped by fears about the weak global recovery, but an afternoon rally in the equities market was enough to power crude futures to a positive finish. Light, sweet crude for September delivery settled up 0.3% to $86.88 a barrel on the New York Mercantile Exchange. Brent crude settled up 2% to $109.37 a barrel. Nymex crude futures fell 9.2% this week, wiping out all of the year's previous gains (Sources: Reuters) Gold Gold prices settled lower as investors toyed with safe assets amid mounting fears of a global downturn but ultimately opted for stocks after Italy agreed to reforms that will pave the way for the European Central Bank to begin purchasing Italian and Spanish bonds. Copper Performance (One Year) Gold prices closed lower at $ 1,651.8 on the last trading day after a roller coaster day as stocks see sawed despite a better than expected read on the labor market for July. (Sources: The Street, Reuters) Copper Copper extended its losses Friday, as concerns about U.S. growth and government debt problems in Europe overshadowed a better than expected U.S. jobs report. The most actively traded contract, for September delivery, settled down 2.8% at $4.1170 a pound on the Comex division of the New York Mercantile Exchange. Source: KITCO, EIA, GBCM Research Adding to the downbeat tone, workers at the world's largest copper mine, Escondida in northern Chile, reached a wage deal Friday. The 15 day long strike had stalled copper output, sparking concern about global supply and giving copper prices a boost. (Sources: WSJ, Reuters) Page 4
Disclaimer: This document has been prepared and issued by GULF BAADER CAPITAL MARKETS SAOC ("the Company") on the basis of publicly available information, internally developed data and other sources believed to be reliable. While all care has been taken to ensure that the facts stated are accurate and the opinions given are reasonable, neither GULF BAADER CAPITAL MARKETS SAOC nor any employee shall be in anyway responsible for the contents of this report. The Company may have a position and may perform buying/selling for itself or its clients in any security mentioned in this report. This is not an offer to buy or sell the investments referred therein. Page 5