The Group Securities: Weekly Report on QSE Performance, 21-25 Jan 2018

General Index Hovers Close to 9500 Points

The general index managed to break through the 9200 points barrier, and recorded continuous gains in all sessions, although some of the results and disclosures were not enticing to investors, including Ezdan not distributing any returns to shareholders, and the drop in Islamic Holding performance, a financial brokerage, which ended the year in the red. However, the overall mood was favorable as Qatar's banking system assets rose by QR40.9 billion, and Dow Jones continued its record hikes, while oil prices remained high.

In depth, General Index increased 259.5 points or 2.82%, to the level of 9459.6 points, while All Shares index increased by 2.24%, along with Al Rayan Islamic Index, which rose by 1.63%. Five sectors indices ended on the positive, mainly transport, industry and commodities, while insurance and telecommunication both dropped. The share price Gulf International topped the market with a rise of 10.37%, followed by Barwa by 8.85%, Milaha by 8.36%, UDC by 7.99% then Mesaieed by 7.92%. The share price of Islamic Holding recorded the biggest loss, with a drop of 16.04%, followed by Cinema Qatar by 8.22%, Doha Insurance by 7.40%, then Qatari Investors by 7.38% and finally Medicare at 6.76%.

Total trading volume dropped by 2.63% to QR1549.4 million, and average daily trading decreased to QR309.7 million. QNB shares led the trading with a volume of QR151.2 million, followed by Qatar First Bank (QFB) with QR131.9 million, MediCare with QR116.2 million, Doha Bank share with QR96.2 million, and then QIIB with 93.5. It was noticed that Qatari portfolios made net purchases worth QR114.6 million, against net purchases of QR1.5 million made by non-Qatari portfolios. Qatari individuals made net sales of QR126.1 million, and non-Qatari individual investors made net sales worth QR2 million. Consequently, QSE’s total capitalization rose by QR9.7 billion to reach QR514.4 billion. P/E ratio rose slightly to a multiple of 14.23 compared to 13.88 last week.

Corporate News:

1.      Islamic Holding Group recorded a net loss of about QR530.4 thousand in 2017, compared to a net profit of QR4.1 million for the same period in 2016. The Group’s earnings per share saw a loss of QR0.09 compared to QR0.72 from the previous year. The Holding’s Board did not recommend the distribution of any cash dividends for this year. Islamic Holding Group revenue dropped by 38% to QR8.5 million in 2017, QR5.14 million of which was generated by brokerage revenues. The Holding’s all expenses decreased to QR8.5 million, which led the Holding to end the year in a loss amounting to QR530 thousand. The comprehensive loss amounted to QR1.1 million when the change in the fair value of certain investments is added.

2.      Ezdan Holding Group recorded a net profit of QR1.7 billion in 2017, compared to QR1.8 billion in 2016, while its earnings per share settled on QR0.64, compared to QR0.68 in the previous year. The Group’s Board did not recommend distributing any cash dividends. Ezdan’s total operational revenue decreased by 10.3% to QR2.28 billion, QR1.49 billion of which was generated by rent and QR0.5 billion from the sale of financial assets. After adding other items, such as a profit of QR427.7 million from the evaluation of realty investments, and deducting QR242 million in general and administration expenses, QR229 million in investment losses, as well as QR703.3 in funding expenses, the result is a drop of 6.8% in the net profit to QR1,693 million. Comprehensive items recorded a loss of QR314 million, which lowered the total comprehensive income down to QR1,379 million.

3.      Qatar Insurance Company made a net profit of QR418 million in 2017, compared to QR1,034 million in the previous year. Qatar Insurance earnings per share recorded QR1.28 for the fiscal year of 2017, compared to QR3.73 from 2016. The Company’s Board of Directors recommended the distribution of 15% of the nominal value of the share in cash dividends. It has been noticed that the company’s total revenue dropped by 38% to QR677.3, of which only QR115 million was generated by insurance subscriptions, while QR902.8 million from investment income. Total expenses and amortization decreased by 4.2% to QR677.3 million. Consequently, net profit attributable to shareholders stood at 59.6% to QR417.6 million. It is worth mentioning that the distribution of QR1.5 per share requires a total distribution of QR416 million, which translates to all profits made this year. However, the company has huge reserves amounting to QR2,554.5 million of premiums, using it the amount required to distribute bonus shares and capital increase will be capitalized.

4.      MediCare recorded a net profit of QR80 million in 2017, compared to QR65.1 million in 2016, while its earnings per share amounted to QR2.84, compared to QR2.31. The Bank’s Board recommended distributing cash dividends of QR4 per share. MediCare's operational profit rose by 3.1% to QR202.4 million, while other profit resources held steady at the level of QR12.1 million. The company’s all expenses decreased by 6.1% to QR134.5 million; QR104.7 million went to general admin expenses. As a result, the net profit increased by 22.6% to QR80 million. It should be mentioned that the profit for the first nine months of 2017 was only around QR36 million, but jumped in the last quarter due to two reasons; first, the fourth quarter revenues surpass the previous ones in the absence of the holiday season, and second, the decrease in the provision for doubtful debts to QR16 million instead of QR32 million, a debt on National Health Insurance Co. (Seha).

5.      Doha Bank recorded a net profit of QR1,110 million in 2017, compared to QR1,054 in 2016, while its earnings per share amounted to QR3.02, compared to QR3.12. The Bank’s Board recommended distributing cash dividends of QR3 per share. Doha Bank's total operational revenue increased by 7.5% to QR2,945.8 million, QR2,255.5 million of which was generated by interests. The Bank’s all expenses increased by 8.8% to QR1,837.2 million; QR531.1 million went to personnel expenses, QR592.5 million in loan losses, and QR142 million from decrease in investments value. As a result, the net profit for the year increased by 5.3% to QR1,110.1 million, while the overall revenue rose to QR1,157.5 million.

6.      Al Khaliji Commercial Bank recorded a net profit of QR550.5 million in 2017, compared to QR426.9 in 2016, while its earnings per share amounted to QR1.38, compared to QR1.07. The Bank’s Board recommended distributing cash dividends of QR7.50 per share. Al Khaliji Bank's total revenue increased by 4.7% to QR1,215 million, QR984.5 million of which was generated by interests. The Bank’s operation expenses decreased 12.2% to QR653.4 million. As a result, the net profit for the year increased by 29% to QR550.5 million, as well as the overall revenue recording QR597.5 million due to profits in the fair value.

7.      Qatar International Islamic Bank recorded a net profit of QR832.2 million in 2017, compared to QR784.8 in 2016, while its earnings per share amounted to QR5.50, compared to QR5.18. The Bank’s Board recommended distributing cash dividends of QR4 per share. QIIB's total revenue increased by 8.8% to QR1,866.4 million, QR1,724.3 million of which was generated by financing and investments. The Bank’s all expenses increased by 10.5% to QR498 million; QR161.4 million went to funding expenses, QR63.5 million to investment losses and funding assets. Deducting QR472.6 million of unrestricted investment accounts holders, the net profit for the year rose by 6% to QR832.2 million.

Economic Development:

1.      Banks' assets (and liabilities) increased by QR40.9 billion to QR1363.6 billion by the end of December, compared to QR1332.7 billion by the end of November. The Government and public sector deposits surged by QR7.4 billion to QR315.4 billion, while their total loans declined by QR9.2 billion to reach QR341.7 billion. On bonds and bills level, it has been noted that the balance of government bonds and bills rose by QR14 billion to QR156.5 billion. The total domestic private sector deposits at local banks increased by QR8.2 billion to QR356.5 billion, by the end of December, while the total domestic loans and credit facilities provided by banks to the local private sector increased by QR0.5 billion to QR461.5 billion.

2.      OPEC oil price dropped on Wednesday by about $0.63 to $66.48 a barrel from $67.07 a barrel the previous week.

3.      Dow Jones index gained 375 points to hit the level of 26393 points until Thursday. U.S. dollar dropped to $1.25 per euro and against the yen at ¥109.12 per dollar. Gold rose by $21 to the level of $1353 per ounce.