The Group Securities: Weekly Report on QSE Performance, 28 Jan-1 Feb 2018

General Index Retreats to Support Level at 9200 Points

The general index hit the strong resistance barrier at the level of 9450 points, to retreat once again to the support level at 9200 points. These movements took place under unfavorable conditions, such as a drop in the total trading volume that fell below QR1 billion, and the stop in the rise of oil prices with the OPEC price dropping to $66.28 per barrel. Financial results disclosures were limited to the results of only two companies during this week, namely the Commercial Bank and Qatar Electricity & Water. Qatari Investors results were released late Sunday. Disclosures showed no surprises, as the Commercial Bank recommended distributing QR1 per share in dividends, Qatar Water & Electricity Co. recommended QR7.75 per share, while Qatari Investors decided on QR0.75 per share.

In depth, General Index decreased by 252.6 points or 2.67%, to the level of 9207 points, while six sectors indices ended on the negative, mainly telecommunication, industry, insurance and banks, while transportation went up. The share price of Qatari Investors recorded the biggest loss with a drop of 10.07%, followed by Islamic Holding by 6.15%, Kahramaa by 6%, GWC by 5.50% then Salam International by 4.79%. The share price of Doha Insurance recorded the biggest gain, with a rise of 6.76%, followed by Milaha by 6.32%, Qatar-Oman by 4.25%, then Qatar National Cement by 3.03% and finally Mesaieed by 2.45%.

Total trading volume dropped by 35.8% to QR969 million, and average daily trading decreased to QR193.8 million. QNB shares led the trading with a volume of QR95.2 million, followed by Doha Bank with QR79.8 million, Al Rayan with QR74.6 million, Barwa share with QR66.7 million, and then UDC with QR64.2 million. It was noticed that non-Qatari portfolios made all the net sales worth QR93 million, against net purchases of QR39.4 million made by Qatari portfolios. Qatari individuals made net purchases of QR46.5 million, while non-Qatari individual investors made net purchases worth QR7.1 million. Consequently, QSE’s total capitalization dropped by QR12.6 billion to reach QR501.8 billion. P/E ratio decreased to a multiple of 13.27.

Corporate News:

1.      Qatar Commercial Bank (QCB) recorded a net profit of QR603.65 million in 2017, compared to QR500.75 million in the same period of 2016, while its earnings per share amounted to QR0.90, compared to QR0.78. The Bank’s Board recommended distributing cash dividends of QR1 per share. QCB's total revenue fell by 1.4% to QR3.53 billion. The Bank’s all expenses increased by 1.25% to QR3.07 billion; QR713.5 million went to personnel expenses and QR1.7 billion to loan and lease losses. It was noted that personnel expenses were reduced by QR169 million, while other expenses dropped by QR168 million. On another hand, investment losses decreased by half, and cash flow from subsidiary companies went from a loss to a profit of QR147 million. As a result, the net profit increased to QR603.6.

2.      Qatari Investors Group’s net profits dropped to about QR253 million in 2017, compared to a net profit of QR277 million for the same period in 2016. The Group’s earnings per share also fell down to QR2.04, compared to QR2.23 from the previous year. The Holding’s Board recommended distributing QR0.75 per share in cash dividends. Qatari Investors Group total revenue dropped by 8% to QR394.7 million in 2017, QR363.5 million of which was generated by direct activities. The Group’s all expenses held steady with a slight slip to QR79.2 million. Deducting the financing cost of QR55.8 million, and QR13.2 million loss from the fair value of investments (this figure was QR36.3 million in the previous year), the result is a net profit decrease of 8.6% to QR253.1 million.

3.     Qatar Electricity & Water Co. (QEWC) net profits increased to about QR1,616 million in 2017, compared to a net profit of QR1,542 million for the same period in 2016. QEWC’s earnings per share also rose to QR14.69, compared to QR14.02 from the previous year. The Company’s Board recommended distributing QR7.75 per share in cash dividends. QEWC’s total operating profit dropped by 6.2% to QR1.316 billion in 2017, while other revenues increased by 6% to QR156.7 million. On another hand, general and administrative expenses increased by 9.3% to QR219.7 million, whereas the financing cost increased by 21.5% to QR180.3 million. The Company's share of profits from joint ventures increased by 52.3% to QR566.9 million. As a result, the net profit attributable to shareholders increased by 4.8% to QR1616 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.

2.      The trade balance recorded a surplus of QR14.9 billion during the month of December, up QR4.2 billion, or 39.1% over the same month of 2016.

3.      OPEC oil price dropped on Wednesday by about $0.20 to $66.28 a barrel.

4.      Dow Jones index lost 207 points to hit the level of 26186 points until Thursday. U.S. dollar settled at $1.25 per euro and against the yen at ¥109.67 per dollar. Gold dropped by $2 to the level of $1353 per ounce.