The Group Securities: Weekly Report on QSE Performance, 14-18 Jan 2018

General Index Halts at 9200 Points

General index hit the level of 9200 points and rebounded down below several times in the last week's trading. Trading was boosted by the surprising decisions of QNB, QIB and Widam to distribute dividends of QR6, QR5, and QR4.25 per share respectively. QSE also benefited from the stable oil prices that remained above $67 a barrel. However, closing out positions to take profit was outstanding, namely by individual investors.  The share price of 30 companies declined, while only those of 15 companies rose. Both the average daily trading volume and the overall capitalization remained steady with minor increments.

In depth, General Index increased 64 points or 0.70%, to the level of 9200 points, contrary to All Shares index that dropped by 0.26%, along with Al Rayan Islamic Index, which fell by 0.67%. All sectors indices ended on the positive, topped by Services & Commodities, followed by Industry, Services, and then Banks. The share price of Qatar Insurance recorded the biggest loss, with a drop of 8.25%, followed by Alijarah by 7.8%, Mazaya by 6.6%. In contrast, the share price of Widam was the biggest winner notching a 9.1% increase, followed by Qatar First Bank by 6.7%, MediCare by 6.4% and Al Mannai by 4.07%.

Total trading volume held steady with a slight increase of 1.5% to QR1549.4 million, and average daily trading increased to QR309.9 million. QNB shares led the trading with a volume of QR183.3 million, followed by Al Rayan with QR162.8 million, Qatar First Bank with QR133.6 million, and then Qatar Industries share with QR104.7 million. It was noticed that Qatari portfolios made net purchases worth QR48.2 million, against net purchases of QR36.1 million made by non-Qatari portfolios. Qatari individuals made net sales of QR55.9 million, and non-Qatari individual investors made net sales worth QR28.4 million. Consequently, QSE’s total capitalization rose by QR2.4 billion to reach QR504.7 billion. P/E ratio rose slightly to a multiple of 13.88 compared to 13.86 last week.

Corporate News:

1.       Qatar National Banks profits increased in 2017 by 5.6% to QR13.1 billion, compared to QR12.4 billion for the same period of 2016. The bank’s Board of Directors recommended a cash dividend of QR6 per share. The Group Securities noticed QNB’s net operating income held steady in 2017 with a slight slip of less than half a percent to QR22.8 billion, of which QR17.9 billion in interests. The bank’s all expenses decreased by 9% to QR8.87 billion, including QR3.43 billion for employees, QR2 billion in loan losses and QR2.75 billion for other expenses. As a result, the net profit attributable to shareholders increased by 6.2% to QR13.13 billion. It was noted that other comprehensive income items had improved significantly, especially currency differences, as recorded losses dropped, resulting in the increase of the total income to QR11.56 billion from a mere QR1.87 billion in the previous year.

2.       Masraf Al Rayan net profit decreased by 2.3% to QR2028 million in 2017. Masraf Al Rayan’s Board of Directors recommended cash dividends of QR2 per share. The Group’s Securities noticed that Al Rayan's total revenue increased by 15.7% to QR4.35 billion in 2017, QR3.89 billion of which generated by financing and investments. This increase is the result of the rise in clients’ investment deposits by 17.7% or QR55.9 billion. However, the bank’s all expenses increased by 30.9% to QR1,072 million, QR494.8 million went to finance expenses, QR327.7 million for personnel costs and QR232.6 million for other expenses. The profit share attributable to owners of investment increased 29.6% to QR1115.4 million. As a result, the net return on shareholders’ equity decreased by 2.3% to QR2,028.1 million.

3.      Gulf Warehousing Company profits increased in 2017 to QR215.4 million, compared to QR205 million in 2016. The company’s Board of Directors recommended distributing dividends of QR1.70 per share for the year 2017. The Group Securities noticed that Gulf Warehousing profits from its activities increased by 13.4% in 2017 to QR349.9 million. The company also had other sources of income worth QR16.1 million. On the other hand, the company’s all expenses increased by 14.1% to QR106.7 million, while its net financing cost increased by 57.6% to QR43.8 million. As a result, the company's total income increased by 4.8% to QR215.46 million.

4.      Qatar Islamic Bank recorded a net profit of QR2,405 million in 2017, compared to QR2,155 in 2016. The Bank’s Board recommended distributing cash dividends of QR5 per share. The Group Securities noticed that QIB's total revenue increased by 13% to QR6.2 billion, QR5.46 billion of which was generated by financing and investments. The Bank’s all expenses increased by 6.3% to QR1.32 billion; QR622.4 million went to personnel expenses, QR218.4 million to Sukuk holders. Deducting QR1818.6 million of unrestricted investment accounts holders, the net profit for the year rose 11.6% to QR2405.4 million.

5.      Ahli Bank recorded a net profit of QR639.7 million in 2017, compared to QR631.7 in 2016. The Bank’s Board recommended distributing cash dividends of QR1 per share and bonus shares of 5%. The Group Securities noticed that Ahli Bank's total revenue increased by 8.9% to QR1,044.4 million. The Bank’s all expenses increased by 23.8% to QR404.7 million; QR182.7 million went to personnel expenses, QR85.4 million in investments and loan losses. As a result, the net profit for the year increased by 1.27% to QR639.7 million.

6.      Widam Food recorded a net profit of QR108.1 million in 2017, compared to QR91.3 in the previous year. The Company’s Board recommended distributing cash dividends of QR4.25 per share. The Group Securities noticed that Widam's total revenue increased by 11.6% to QR495.7 million, while its sales expenses went up by 19.1% to QR779 million. As a result, the Widam’s sales loss rose by 35% to QR 283.3 million, while government subsidization rose by 26.3% to QR430.8 million. In contrast, the company’s all expenses increased by 18.8% to QR49.4 million. The resulting net profit, after adding and deducting other items, increases by 18.3% in 2017, to settle at QR108.1 million.

Economic Development:

1.      Inflation rate rose by 0.6% in the month of December, compared to 0.2% in November

2.      OPEC oil price of held steady on Wednesday, with a slight drop to $67.07 a barrel from $67.24 a barrel the previous week.

3.      Dow Jones index gained 447 points to hit the level of 26018 points until Thursday. U.S. dollar dropped to $1.23 per euro and against the yen at ¥110.76 per dollar. Gold rose by $3 to the level of $1332 per ounce.