The Group Securities: Weekly Report on QSE Performance, 22-26 July 2018

“General Index Breaks the Resistance Barrier at 9500 Points”

Of the 9 companies whose results were released last week, 6 had their net profit decline, Qatar Cement profits stabilized, and Vodafone and Alijarah became profitable. In terms of comprehensive income - which includes changes in the fair value of investments – Dlala made had a comprehensive loss, while the comprehensive income of Barwa, Qatar Insurance, Alijarah and QIMC decreased. However, the performance of the stock market improved following a limited increase in the trading volume, and a strong rise in indices, especially as the general index broke the 9500 points barrier. The share price of 30 companies increased, while the share price of 12 others declined. The general index rose by 187 points to 9608 points, while the total capitalization increased by QR11.3 billion to QR523.8 billion, and the P/E ratio climbed to a multiple of 12.99.

In depth, the general index increased by about 187 points or 1.99%, to the level of 9608 points, while Al Rayan Islamic Index increased by 1.73%. Six sectoral indices increased, especially Real Estate, Transportation and Telecommunication. It has been noticed that the share price of Widam was the top gainer, up by 6.77%; followed by Aamal 5.65%, Doha Insurance by 4.40%, Ezdan 4.15%, then Al Rayan 4.09%. In contrast, the share price of Doha Bank was the biggest loser, down by 7.36%; followed by Dlala by 6.77%, Zad by 5.63%, and Islamic Holding by 3.67%, then Qatari Investors by 2.52%.

Total trading volume climbed by 6.5% to the level of QR967 million in a week, so the average daily trading volume increased to QR193.4 million. QNB led the traded shares with a volume of QR210.3 million, followed by the share of Al Rayan with QR81.9 million, Vodafone Qatar with QR69.7 million, and Qatar Industries with QR69.2 million. It was noticed that Qatari portfolios made net purchases of QR19.7 million, while Non-Qatari portfolios made net purchases of QR176.8 million. Qatari individuals made total net sales of QR178.4 million, whereas foreign individual investors made net sales of QR18 million. As a result, QSE’s total capitalization climbed by QR11.3 billion to reach QR523.8 million, and the P/E ratio rose to a multiple of 12.99 compared to 12.91 from last week.

Corporate News:

1-      Qatar National Cement’s net profit amounted to QR168.5 million, compared to QR168.1 million in the same period last year, while the company’s earnings per share recorded QR2.58, versus QR2.57 in the corresponding period of 2017. Qatar National Cement's revenues decreased by 22% to QR434.6 million, in the first half of 2018. The total profit from the company’s activities decreased by 8% to QR156.8 million. Other revenues rose by QR4 million to QR27 million. General and administrative expenses decreased by 29.8% to QR16.5 million. As a result, the net profit stabilized slightly by QR168.5 million. Since the decline in fair value was limited this year compared to a decline in the corresponding period of the previous year, the total income amounted to QR162.4 million compared to QR134.1 million in the corresponding period of 2017.

2-      Qatari Investors Group’s net profit amounted to QR135.67 million in the first half of 2018, a 10.8% drop compared to QR152.21 million for the same period last year, while the group’s earnings per share reached QR1.09, versus QR1.22 for the corresponding period of 2017. Although Qatari Investors’ sales revenue declined in the first half of 2018, the much lower cost of sales led to an increase in revenues of 6% to QR216.2 million, in addition to a limited increase in other types of income to QR18.3 million. On the other hand, sales and administrative expenses increased by 17.7% to QR50.5 million, while the cost of financing climbed by 52.6% to QR40.3 million. As a result, the net profit attributable to shareholders declined by 10.8% to QR135.7 million. There have been limited positive changes in the fair value, which led to the increase in the comprehensive income to QR136.7 million.

3-      Dlala Brokerage & Investment Holding net profit amounted to QR1.34 million, compared to QR12.841 million for the same period of the previous year, while its earnings per share reached QR0.05, versus QR0.45 for the same period in 2017. Dlala's net income decreased by 36.8% to QR17.7 million in the first half of 2018, of which QR13 million in net commissions and brokerage income. The company’s total expenses increased by 7% to QR16.4 million, which led the net profit to decline by 87.8% to QR1.34 million. In addition to that the net loss in the fair value amounted to QR2.39 million, turning the profit into a comprehensive loss of QR1.05 million.

4-      Qatar-Oman Investment Company net profit amounted to QR5.44 million, compared to QR10.55 million in the same period last year, while its earnings per share amounted to QR0.17 in first half of 2018, versus QR0.33 in 2017. Total revenues of Qatar-Oman declined by 38.5% to QR8.27 million in the first half of 2018, and total expenses decreased by 3% to QR2.87 million. Net profit fell 48.4% to QR5.44 million, and the company recorded a fair value gain of QR26.1 million, which led to an increase in the comprehensive income to QR31.5 million, versus the comprehensive loss of QR2.6 million recorded in the corresponding period of 2017.

5-      Qatar Insurance’s net profit amounted to QR384 million in first half of 2018, compared to QR505 million for the same period last year, while its earnings per share recorded QR1.08, versus QR1.58 from the same period in 2017. The company’s total revenues decreased by 9.8% to QR774.3 million in the first half of 2018, of which QR408.2 million in net investments and QR330 million in net insurance, and total expenses increased by 10% to QR382.5 million. As a result, the net profit decreased by 24% to QR384.5 million. There was a decline in the fair value of investments amounting to QR285.8 million, which led to the decline of the comprehensive income to QR110.1 million.

6-      Vodafone Qatar’s net profit amounted to QR48.7 million, compared to a net loss of QR131.3 million recorded in the same period last year. Vodafone’s earnings per share amounted to QR0.06 in the first half of 2018, versus the loss per share of QR0.16 in the corresponding period of 2017. Vodafone’s total revenues in the first half of 2018 increased by 1.7% to QR1051.2 million. Total operating and administrative expenses increased by half a percent to QR767.6 million. Depreciation and amortization expenses - after capital reduction - decreased by 44.5% to QR214.8 million. As a result, the net profit was QR 48.7 million compared to a loss of QR131.3 million.

7-      Barwa Real Estate Group’s net profit amounted to QR804 million, compared to QR 912 million in the same period last year. The group’s earnings per share recorded QR2.07 in the first half 2018, versus QR2.34 for the corresponding period of 2017. Barwa's total rental income from leasing and finance leases decreased by 1.7% to QR530 million in the first half. Net fair value dropped as well as gains from the company’s share in sister companies’ fell 41% to QR310.5 million. On the other hand, total expenditures increased by QR81.6 million. As a result, the net profit for the period ended 30/06/2018 decreased by 10.9% to QR808.8 million. There was a fair value loss of $46.8 million, all led the comprehensive income total income of $756.6 million compared to $ 896.7 million.

8-      Alijarah Holding Company’s net profit amounted to QR3.94 million in first half of 2018, contrary to the net loss of QR8.96 million recorded in the same period last year, while the holding’s earnings per share amounted to QR0.08, versus a loss per share of QR0.18 for the corresponding period of 2017. Alijarah revenues increased by 30.9% to QR86.8 million in the first half of 2018, of which QR30.3 million generated from investment profits in securities, while its total expenses increased by 3.7% to QR91.8 million. As a result the net loss of QR8.96 million turned into a net profit of QR3.95 million. The comprehensive income did not see any changes.

9-      Qatar Industrial Manufacturing Company (QIMC) net profit amounted to QR108.28 million in first half of 2018, compared to QR113.42 million for the same period last year, while its earnings per share amounted to QR2.28 in this period, versus QR2.39 for the corresponding period of 2017. QIMC’s total sales revenues fell 4.2% to QR48.7 million, but other revenues increased by 74.5% to QR21.3 million. Expenses decreased by 3.1% to QR37.9 million, as well as the results of associates and investment income by 28.4% to QR67.1 million. As a result, the net profit dropped by 4.5% to QR108.3 million, with a slight decline in the fair value of QR5.7 million, versus a drop of QR26.2 million in the corresponding period of 2017. The comprehensive income amounted to QR104.9 million, compared to QR90.7 million in the first half of 2017.

Economic Developments:

1-      OPEC oil price increased by about US $2.89 to the level of US $72.87 per barrel until Wednesday 25^th of July, compared to US $69.98 per barrel a week prior.

2-      Dow Jones rose again by about 506 points to the level of 25527 points until closing on Thursday. US dollar stood at $1.16 against the Euro, but declined against the yen to ¥111 per dollar. Gold stood still at US $1222.8 per ounce.