GCC Equity Monitor
Global Research Monthly Update Equity - GCC June, 2012
GCC Equity Monitor GCC ROE & P/BV
GCC Country Performance
24%
Country
1M
3M
12M
P/E*
P/BV*
DY (%)
Bahrain
-1.7%
-0.8%
-15.0%
9.3
0.9
5.4%
Kuwait
-5.0%
-3.1%
-8.7%
13.1
1.6
3.9%
Oman
-2.4%
-2.2%
-5.9%
8.4
1.4
6.9%
Qatar
-3.9%
-4.7%
1.1%
9.5
1.9
4.9%
-10.6%
-8.2%
1.8%
9.5
1.6
4.5%
22% Qatar 2012e ROE
20% KSA
18%
Oman
16%
GCC
14% UAE
12%
Kuwait
KSA
10% 0.5
1.0
1.5
2.0
2.5
3.0
2012e P/BV
GCC PE & Earnings Grow th
UAE-Abu Dhabi
-3.0%
-8.1%
-9.2%
7.5
1.1
5.9%
UAE-Dubai
-8.9%
-17.8%
-8.0%
10.2
0.6
4.3%
Source: Global Research, Bloomberg, Zawya * 2012e
19% Kuwait
Top Fundamental Picks
Earnings Grwoth
17% UAE 15%
Arabian Cement Co. (KSA), CMP: SAR56.00, Target Price: SAR66.90
Qatar
13%
GCC
11% KSA
9%
Oman
7% 5%
5.0
7.0
9.0
11.0
13.0
15.0
2012e P/E
Arabian Cement is trading at a low P/E estimate of 8.4x for 2012. The company exhibited a stellar growth of 90.6% in profits for 1Q12 attributed to the huge construction activity witnessed in the western region of KSA. ACC managed to increase production by 300,000tons which will help it meet continuously rising demand in the western region and the Kingdom as a whole. However Arabian Cement is incurring losses from it Jordanian subsidiary, but with the current restructuring plan, cost rationalization and improving efficiency, the Jordanian subsidiary will be of great importance in the future for the company.
World & GCC Indices YTD
Emirates NBD (UAE), CMP: AED2.70, Target Price: AED3.42 27.7%
7.9%
6.5% 5.7% 0.3%
3.3%
1.0%
-0.5%
-1.2%
-5.1%
US
India
So urce: Glo bal Research, B lo o mberg A s o f 03 June 2012
China
Egypt
Kuwait
Jordan
Bahrain
UAE-Abu Dhabi
KSA
UAE -Dubai
-6.8% Oman
Qatar
1.6%
Emirates NBD has an immense sovereign exposure to Dubai and has been under pressure lately following new regulations by the CBUAE capping lending and asking banks to comply by September 2012. There has been news in the market about possible postponement of the compliance date for the said regulations on a case to case basis for heavily exposed banks. We see this as a positive development, whereby the bank will be allowed to reach compliant levels amicably, minimizing the adverse impact on its books and profitability. ENBD is trading at the lowest P/BV within the sector, coupled with a hard-to-ignore upside potential.
Commercial Bank of Qatar (Qatar), CMP: QAR69.30, Target Price: QAR95.12 CBQ continues to be our top pick given its relatively strong balance sheet and solid long-term funding and capitalization base. The stock has come under pressure in recent times largely due to concerns on foreign funding which we believe is overdone. The stock offers a combination of both value and growth and is expected to do well in the near term.
Top Technical Picks
Global Research [email protected] Tel.: (965) 22951270
Global Investment House www.globalinv.net
KFH’s stock price closed at KWD0.750. A temporarily double bottom has been formed on the weekly chart at KWD0.680, while the long bullish candle seen recently could suggest the start of a new bullish trend. However, it is important to know that overhead resistance levels are intense as we have KWD0.760, KWD0.820 and KWD0.880 but for an aggressive bullish tone to take place, the stock should show strong buying potential above the critical resistance line at KWD1.120. On the counter side, losing KWD0.680 would trigger KWD0.610. The weekly and daily “RSI” indicators are looking neutral at present. Strategy: Medium-term (11 weeks) investors should be aware as the price is near the moving average for this period at KWD0.740, while long-term (50 weeks) investors can only buy above KWD0.820.
Global Research - GCC
GCC Equity Monitor
GCC Universe by Country
Global Research - GCC Universe UAE Abu Dhabi Commercial Bank Dana Gas Emirates Telecommunications Corp First Gulf Bank National Bank of Abu Dhabi Ras Al Khaimah Cement Co Ras Al Khaimah Ceramics Co Abu Dhabi National Energy Union National Bank Air Arabia Arabtec Holding PJSC Dubai Financial Market Drake & Scull International Emirates NBD Aramex Emaar Properties Aldar Properties Sorouh Real Estate Total
Bloomberg Ticker
ADCB UH DANA UH ETISALAT UH FGB UH NBAD UH RAKCC UH RAKCEC UH TAQA UH UNB UH AIRARABI UH ARTC UH DFM UH DSI UH EMIRATES UH ARMX UH EMAAR UH ALDAR UH SOROUH UH
Kuwait Mobile Telecommunications Co ZAIN KK National Bank of Kuwait NBK KK Kuwait Finance House KFIN KK Commercial Bank of Kuwait CBK KK National Mobile Telecommunications Co NMTC KK Jazeera Airways Co JAZEERA KK Burgan Bank BURG KK Mabanee MABANEE KK Salhia Real Estate SRE KK Total Oman Oman Telecommunications Co Bank Muscat Raysut Cement Co Oman Cement Co Total
June - 2012
OTEL OM BKMB OM RCCI OM OCOI OM
Mkt. Cap USD mn
Stock Performance 1M 3M 12M
P/E 2012e
P/BV 2012e
ROE 2012e
ROA 2012e
EPS 2012e
Current Price
Target Price
4,433.2 700.8 18,877.4 6,967.1 8,987.5 93.6 269.3 1,982.9 1,929.6 711.5 1,205.2 1,988.6 461.3 4,085.5 713.5 4,626.9 1,123.3 678.9
-7.9% -11.4% 1.4% -5.1% -3.5% -4.1% -11.3% 0.0% -5.0% -7.7% -13.9% -17.0% -14.6% -5.3% -1.1% -10.3% -10.6% -15.2%
-12.3% -25.0% -6.1% -20.7% -0.8% -11.3% -21.8% -9.3% -10.4% -25.8% -17.1% -23.3% -24.5% -18.2% -7.7% -10.6% -19.8% -26.4%
-0.7% -40.0% -15.3% -5.2% 2.2% -21.1% -32.8% -4.9% -25.7% -20.3% 121.0% -25.2% -23.7% -32.2% -3.2% -12.8% -26.3% -28.6%
7.9 4.7 9.4 6.5 8.2 nm 5.0 4.0 4.5 9.6 30.1 77.0 7.9 6.6 11.3 10.0 10.1 5.4 8.05
0.9 0.3 1.7 1.1 1.3 0.5 0.4 0.7 0.6 0.5 1.5 1.0 0.6 0.5 1.3 0.5 0.6 0.4 0.90
11.8% 6.0% 18.2% 17.8% 16.6% 0.0% 7.5% 17.9% 13.7% 5.2% 5.0% 1.3% 8.0% 7.2% 11.9% 5.3% 5.7% 6.9% 11.6%
1.1% 4.2% 9.6% 2.4% 1.5% 0.0% 3.3% 1.6% 1.9% 3.7% 1.7% 1.2% 3.6% 0.8% 9.0% 2.9% 1.1% 3.4% 2.0%
0.37 0.08 0.93 1.31 1.04 0.00 0.26 0.30 0.63 0.06 0.09 0.01 0.09 0.41 0.16 0.28 0.10 0.16
2.91 0.39 8.77 8.53 8.52 0.71 1.33 1.17 2.84 0.56 2.82 0.91 0.74 2.70 1.79 2.79 1.01 0.95
3.73 U/R 11.10 12.40 9.92 U/R U/R 1.79 4.64 0.76 1.21 0.90 0.95 3.42 2.00 4.00 1.30 1.05
10,683.7 16,274.8 7,725.0 3,429.2 3,623.5 356.6 2,304.7 2,065.1 479.2
-6.8% -3.7% 0.0% -6.3% -15.3% -3.5% -5.7% -7.8% 4.8%
-19.8% -4.7% -4.9% 5.6% -1.0% -5.1% -6.3% 10.0% 23.8%
-32.4% -3.1% -21.6% -17.6% 2.0% 142.5% -16.2% 18.9% 22.6%
9.0 14.0 27.6 21.2 9.9 5.6 10.8 16.3 19.3 13.07
1.3 2.0 1.8 1.7 1.1 2.2 1.3 3.3 1.0 1.62
14.9% 14.5% 6.6% 8.2% 11.2% 50.4% 12.6% 21.8% 5.2% 12.6%
9.9% 2.3% 0.6% 1.2% 7.4% 9.6% 1.3% 10.8% 2.5% 2.4%
0.08 0.07 0.03 0.04 0.20 0.07 0.04 0.06 0.01
0.69 1.04 0.74 0.75 2.00 0.41 0.42 0.94 0.26
0.86 1.13 U/R 0.73 2.59 0.56 U/R 0.98 0.25
2,579.2 2,598.0 677.9 582.7
1.5% -10.8% 5.2% -2.2%
-5.7% -13.9% 50.0% 35.3%
20.5% -14.7% 20.8% 20.6%
8.6 6.9 17.8 11.2 8.41
1.8 1.0 2.6 1.5 1.40
22.5% 15.5% 14.3% 13.4% 17.4%
16.0% 2.0% 7.8% 11.5% 3.5%
0.15 0.09 0.07 0.06
1.32 0.55 1.31 0.68
1.45 U/R U/R 0.70
Upside / (Downside) 28.2% U/R 26.6% 45.4% 16.4% U/R U/R 53.1% 63.4% 36.6% -57.1% -1.4% 28.2% 26.7% 11.7% 43.4% 28.7% 10.5%
Rating
STRONG BUY U/R STRONG BUY STRONG BUY BUY U/R U/R STRONG BUY STRONG BUY STRONG BUY SELL HOLD STRONG BUY STRONG BUY BUY STRONG BUY STRONG BUY BUY
25.0% STRONG BUY 8.8% HOLD U/R U/R -2.9% HOLD 29.6% STRONG BUY 36.1% STRONG BUY U/R U/R 4.3% HOLD -3.8% HOLD
9.9% U/R U/R 2.9%
HOLD U/R U/R HOLD
2
Global Research – GCC
GCC Equity Monitor
GCC Universe by Country (cont) Global Research - GCC Universe Qatar Qatar National Bank Industries Qatar Qatar Telecom Vodafone Qatar Qatar Islamic Bank Commercial Bank of Qatar Qatar Electricity & Water Co Doha Bank Al Rayan Bank Qatar National Cement Co Total Saudi Arabia Saudi Basic Industries Corp Al Rajhi Bank Saudi Telecom Co Samba Financial Group Saudi Electricity Co Riyad Bank Saudi British Bank Banque Saudi Fransi Etihad Etisalat Co Arab National Bank Saudi Arabian Fertilizers Co Yanbu National Petrochemicals Co Saudi Hollandi Bank Saudi International Petrochemical Co Yamama Saudi Cement Co Arabian Cement Co Saudi Cement Co Dar Alarkan Emaar Economic City Saudi Real Estate Co Al Khodari Sons Co Yanbu Cement Co Qassim Cement Co Mohammad Al-Mojil Group Total Bahrain Bahrain Telecommunications Co
Bloomberg Ticker
Mkt. Cap USD mn
Stock Performance 1M 3M 12M
P/E 2012e
P/BV 2012e
ROE 2012e
ROA 2012e
EPS 2012e
Current Price
Target Price
Upside / (Downside)
Rating
QNBK QD IQCD QD QTEL QD VFQS QD QIBK QD CBQK QD QEWS QD DHBK QD MARK QD QNCD QD
25,483.8 20,212.0 7,044.6 2,096.7 5,010.3 4,709.8 3,817.7 3,162.1 5,489.7 1,410.6
-0.7% -8.5% -7.4% 1.5% -1.0% -3.7% -1.6% -2.1% -0.2% -1.4%
-1.0% -5.4% 1.5% 23.0% -1.2% -9.9% -5.4% -9.4% 0.6% -7.8%
7.1% -2.1% 10.3% 15.2% 0.3% -3.3% -2.9% 9.9% 16.9% -7.1%
10.3 7.6 8.7 na 11.7 7.6 8.9 8.2 12.7 11.5 9.47
2.1 2.4 1.1 1.2 1.7 1.3 3.9 1.8 2.3 2.1 1.91
21.5% 33.9% 13.4% -4.1% 15.1% 17.3% 47.5% 22.5% 18.9% 19.0% 21.2%
2.8% 24.4% 2.8% -3.3% 2.5% 3.0% 7.0% 2.6% 2.6% 16.8% 4.0%
14.21 17.53 12.87 (0.32) 6.62 9.08 15.70 6.76 2.10 9.12
132.60 133.80 112.10 9.03 77.20 69.30 139.00 55.70 26.65 104.60
156.08 170.90 151.67 7.49 81.30 95.12 180.81 64.96 27.51 125.40
17.7% 27.7% 35.3% -17.0% 5.3% 37.3% 30.1% 16.6% 3.2% 19.9%
BUY STRONG BUY STRONG BUY SELL HOLD STRONG BUY STRONG BUY BUY HOLD BUY
SABIC AB RJHI AB STC AB SAMBA AB SECO AB RIBL AB SABB AB BSFR AB EEC AB ARNB AB SAFCO AB YANSAB AB AAAL AB SIPCHEM AB YACCO AB ARCCO AB SACCO AB ALARKAN AB EMAAR AB SRECO AB ALKHODAR AB YNCCO AB QACCO AB MMG AB
72,594.2 28,397.7 21,331.6 10,775.1 14,387.5 9,079.3 9,039.1 8,147.5 11,945.7 6,062.2 11,382.4 6,554.5 2,794.0 1,838.1 2,581.0 1,194.6 3,641.1 2,879.8 2,198.5 822.3 480.2 2,155.8 1,883.8 453.3
-12.1% -9.3% -5.2% -11.1% -5.1% -9.0% -5.8% -11.1% -5.9% -13.3% -7.7% -17.2% -7.4% -13.6% -5.3% -5.5% -7.0% -14.9% -27.3% -6.9% -20.0% 2.7% -4.8% -10.8%
-10.8% -12.1% 2.8% -12.8% -10.1% -12.4% -2.4% -8.0% 1.2% -16.3% -8.8% -14.7% -1.3% -16.4% -14.3% 5.7% -4.0% 6.4% -0.5% -7.6% -23.3% 12.0% -9.5% -18.3%
-12.9% -4.4% 7.5% -13.7% -11.3% -8.3% 4.9% -8.0% 27.4% -12.7% -4.1% -6.6% 6.3% -12.6% 15.6% 30.8% 43.4% 15.6% 32.9% 2.4% -37.9% 46.7% 15.9% -42.5%
8.7 11.6 9.2 8.3 18.2 9.6 11.1 8.5 8.1 8.2 9.7 7.1 8.9 10.2 9.5 8.4 12.4 8.8 na 25.3 10.3 11.0 12.7 14.0 9.60
1.6 3.4 1.5 1.3 1.0 1.1 1.8 1.4 2.1 1.3 4.8 1.8 1.3 1.2 2.7 1.5 3.9 0.7 1.1 1.0 2.4 2.4 3.6 1.0 1.66
20.6% 28.5% 17.5% 16.3% 5.5% 11.8% 16.9% 17.7% 28.1% 16.2% 51.6% 29.0% 15.4% 12.0% 29.2% 18.2% 32.6% 7.6% -0.5% 3.8% 24.8% 23.9% 28.4% 11.2% 18.2%
8.9% 4.0% 7.3% 2.4% 1.3% 1.9% 2.1% 2.5% 14.3% 2.2% 45.6% 13.6% 2.0% 4.9% 26.4% 12.0% 23.0% 5.1% -0.2% 3.6% 7.4% 15.9% 26.1% 3.5% 4.7%
10.43 90.75 6.13 71.00 4.35 40.00 5.38 44.90 0.71 12.95 2.37 22.70 3.06 33.90 3.99 33.80 7.93 64.00 3.27 26.70 17.61 170.75 6.18 43.70 2.98 26.40 1.84 18.80 5.02 47.80 6.63 56.00 7.19 89.25 1.13 10.00 (0.04) 9.70 1.02 25.70 3.30 33.90 7.01 77.00 6.19 78.50 0.97 13.60
118.60 U/R 44.00 53.73 13.80 26.20 35.50 U/R 73.00 32.60 220.70 57.80 U/R 23.60 56.40 66.90 86.10 8.90 7.65 28.95 52.08 66.80 77.00 U/R
30.7% U/R 10.0% 19.7% 6.6% 15.4% 4.7% U/R 14.1% 22.1% 29.3% 32.3% U/R 25.5% 18.0% 19.5% -3.5% -11.0% -21.1% 12.6% 53.6% -13.2% -1.9% U/R
STRONG BUY U/R BUY BUY HOLD BUY HOLD U/R BUY STRONG BUY STRONG BUY STRONG BUY U/R STRONG BUY BUY BUY HOLD SELL SELL BUY STRONG BUY SELL HOLD U/R
1,802.8
2.2%
21.0%
9.3%
8.3
1.2
15.3%
12.1%
0.50
6.8%
HOLD
BATELCO BI
0.06
0.47
* All price in local currency as of 3 June 2012 Source: Bloomberg & Global Research
June - 2012
3
Global Research – GCC
GCC Equity Monitor
GCC Universe by Sector Global Research - GCC Universe Cement & Building Material Ras Al Khaimah Cement Co Ras Al Khaimah Ceramics Co Raysut Cement Co Oman Cement Co Qatar National Cement Co Yamama Saudi Cement Co Arabian Cement Co Yanbu Cement Co Qassim Cement Co Saudi Cement Co Total
Bloomberg Ticker Mkt. Cap USD mn RAKCC UH RAKCEC UH RCCI OM OCOI OM QNCD QD YACCO AB ARCCO AB YNCCO AB QACCO AB SACCO AB
Transportation and Logistics Aramex Air Arabia Jazeera Airways Co Total
June - 2012
Stock Performance 3M 12M
P/E 2012e
P/BV 2012e
ROE 2012e
ROA 2012e
EPS 2012e
Current Price
Target Price
Upside / (Downside)
Rating
93.6 269.3 677.9 582.7 1,410.6 2,581.0 1,194.6 2,155.8 1,883.8 3,641.1
-4.1% -11.3% 5.2% -2.2% -1.4% -5.3% -5.5% 2.7% -4.8% -7.0%
-11.3% -21.8% 50.0% 35.3% -7.8% -14.3% 5.7% 12.0% -9.5% -4.0%
-21.1% -32.8% 20.8% 20.6% -7.1% 15.6% 30.8% 46.7% 15.9% 43.4%
nm 5.0 17.8 11.2 11.5 9.5 8.4 11.0 12.7 12.4 11.00
0.5 0.4 2.6 1.5 2.1 2.7 1.5 2.4 3.6 3.9 2.28
0.0% 7.5% 14.3% 13.4% 19.0% 29.2% 18.2% 23.9% 28.4% 32.6% 21.4%
0.0% 3.3% 7.8% 11.5% 16.8% 26.4% 12.0% 15.9% 26.1% 23.0% 15.0%
0.00 0.26 0.07 0.06 9.12 5.02 6.63 7.01 6.19 7.19
0.71 1.33 1.31 0.68 104.60 47.80 56.00 77.00 78.50 89.25
U/R U/R U/R 0.70 125.40 56.40 66.90 66.80 77.00 86.10
U/R U/R U/R 2.9% 19.9% 18.0% 19.5% -13.2% -1.9% -3.5%
U/R U/R U/R HOLD BUY BUY BUY SELL HOLD HOLD
18,877.4 1,802.8 10,683.7 3,623.5 2,579.2 7,044.6 2,096.7 21,331.6 11,945.7
1.4% 2.2% -6.8% -15.3% 1.5% -7.4% 1.5% -5.2% -5.9%
-6.1% 21.0% -19.8% -1.0% -5.7% 1.5% 23.0% 2.8% 1.2%
-15.3% 9.3% 0.0% 2.0% 20.5% 10.3% 15.2% 7.5% 27.4%
9.4 8.3 9.0 9.9 8.6 8.7 na 9.2 8.1 9.31
1.7 1.2 1.3 1.1 1.8 1.1 1.2 1.5 2.1 1.51
18.2% 15.3% 14.9% 11.2% 22.5% 13.4% -4.1% 17.5% 28.1% 5.8%
9.6% 12.1% 9.9% 7.4% 16.0% 2.8% -3.3% 7.3% 14.3% 7.4%
0.93 0.06 0.08 0.20 0.15 12.87 (0.32) 4.35 7.93
8.77 0.47 0.69 2.00 1.32 112.10 9.03 40.00 64.00
11.10 0.50 0.86 2.59 1.45 151.67 7.49 44.00 73.00
26.6% 6.8% 25.0% 29.6% 9.9% 35.3% -17.0% 10.0% 14.1%
STRONG BUY HOLD STRONG BUY STRONG BUY HOLD STRONG BUY SELL BUY BUY
DANA UH IQCD QD SABIC AB SAFCO AB YANSAB AB SIPCHEM AB
700.8 20,212.0 72,594.2 11,382.4 6,554.5 1,838.1
-11.4% -8.5% -12.1% -7.7% -17.2% -13.6%
-25.0% -5.4% -10.8% -8.8% -14.7% -16.4%
-40.0% -2.1% -12.9% -4.1% -6.6% -12.6%
4.7 7.6 8.7 9.7 7.1 10.2 8.44
0.3 2.4 1.6 4.8 1.8 1.2 1.81
6.0% 33.9% 20.6% 51.6% 29.0% 12.0% 23.2%
4.2% 24.4% 8.9% 45.6% 13.6% 4.9% 11.0%
0.08 17.53 10.43 17.61 6.18 1.84
0.39 133.80 90.75 170.75 43.70 18.80
U/R 170.90 118.60 220.70 57.80 23.60
U/R 27.7% 30.7% 29.3% 32.3% 25.5%
U/R STRONG BUY STRONG BUY STRONG BUY STRONG BUY STRONG BUY
TAQA UH QEWS QD SECO AB
1,982.9 3,817.7 14,387.5
0.0% -1.6% -5.1%
-9.3% -5.4% -10.1%
-4.9% -2.9% -11.3%
4.0 8.9 18.2 11.71
0.7 3.9 1.0 1.08
17.9% 47.5% 5.5% 9.6%
1.6% 7.0% 1.3% 1.8%
0.30 15.70 0.71
1.17 139.00 12.95
1.79 180.81 13.80
53.1% STRONG BUY 30.1% STRONG BUY 6.6% HOLD
713.5 711.5 356.6
-1.1% -7.7% -3.5%
-7.7% -25.8% -5.1%
-3.2% -20.3% 142.5%
11.3 9.6 5.6 8.85
1.3 0.5 2.2 0.84
11.9% 5.2% 50.4% 9.7%
9.0% 3.7% 9.6% 6.0%
0.16 0.06 0.07
1.79 0.56 0.41
2.00 0.76 0.56
11.7% BUY 36.6% STRONG BUY 36.1% STRONG BUY
Telecom Emirates Telecommunications Corp ETISALAT UH Bahrain Telecommunications Co BATELCO BI Mobile Telecommunications Co ZAIN KK National Mobile Telecommunications Co NMTC KK Oman Telecommunications Co OTEL OM Qatar Telecom QTEL QD Vodafone Qatar VFQS QD Saudi Telecom Co STC AB Etihad Etisalat Co EEC AB Total Petrochemicals Dana Gas Industries Qatar Saudi Basic Industries Corp Saudi Arabia Fertilizers Co Yanbu National Petrochemicals Co Saudi International Petrochemichal Co Total Utilities Abu Dhabi National Energy Qatar Electricity & Water Co Saudi Electricity Co Total
1M
ARMX UH AIRARABI UH JAZEERA KK
4
Global Research – GCC
GCC Equity Monitor
GCC Universe by Sector (cont) Global Research - GCC Universe
Bloomberg Ticker Mkt. Cap USD mn
1M
Stock Performance 3M 12M
P/E 2012e
P/BV 2012e
ROE 2012e
ROA 2012e
EPS 2012e
Current Price
Target Price
Upside / (Downside)
Rating
Banks Abu Dhabi Commercial Bank First Gulf Bank National Bank of Abu Dhabi Union National Bank Emirates NBD National Bank of Kuwait Kuwait Finance House Commercial Bank of Kuwait Burgan Bank Bank Muscat Qatar National Bank Qatar Islamic Bank Commercial Bank of Qatar Doha Bank Al Rayan Bank Al Rajhi Bank Samba Financial Group Riyad Bank Saudi British Bank Banque Saudi Fransi Arab National Bank Saudi Hollandi Bank Total
ADCB UH FGB UH NBAD UH UNB UH EMIRATES UH NBK KK KFIN KK CBK KK BURG KK BKMB OM QNBK QD QIBK QD CBQK QD DHBK QD MARK QD RJHI AB SAMBA AB RIBL AB SABB AB BSFR AB ARNB AB AAAL AB
4,433.2 6,967.1 8,987.5 1,929.6 4,085.5 16,274.8 7,725.0 3,429.2 2,304.7 2,598.0 25,483.8 5,010.3 4,709.8 3,162.1 5,489.7 28,397.7 10,775.1 9,079.3 9,039.1 8,147.5 6,062.2 2,794.0
-7.9% -5.1% -3.5% -5.0% -5.3% -3.7% 0.0% -6.3% -5.7% -10.8% -0.7% -1.0% -3.7% -2.1% -0.2% -9.3% -11.1% -9.0% -5.8% -11.1% -13.3% -7.4%
-12.3% -20.7% -0.8% -10.4% -18.2% -4.7% -4.9% 5.6% -6.3% -13.9% -1.0% -1.2% -9.9% -9.4% 0.6% -12.1% -12.8% -12.4% -2.4% -8.0% -16.3% -1.3%
-0.7% -5.2% 2.2% -25.7% -32.2% -3.1% -21.6% -17.6% -16.2% -14.7% 7.1% 0.3% -3.3% 9.9% 16.9% -4.4% -13.7% -8.3% 4.9% -8.0% -12.7% 6.3%
7.9 6.5 8.2 4.5 6.6 14.0 27.6 21.2 10.8 6.9 10.3 11.7 7.6 8.2 12.7 11.6 8.3 9.6 11.1 8.5 8.2 8.9 9.93
0.9 1.1 1.3 0.6 0.5 2.0 1.8 1.7 1.3 1.0 2.1 1.7 1.3 1.8 2.3 3.4 1.3 1.1 1.8 1.4 1.3 1.3 1.55
11.8% 17.8% 16.6% 13.7% 7.2% 14.5% 6.6% 8.2% 12.6% 15.5% 21.5% 15.1% 17.3% 22.5% 18.9% 28.5% 16.3% 11.8% 16.9% 17.7% 16.2% 15.4% 16.1%
1.1% 2.4% 1.5% 1.9% 0.8% 2.3% 0.6% 1.2% 1.3% 2.0% 2.8% 2.5% 3.0% 2.6% 2.6% 4.0% 2.4% 1.9% 2.1% 2.5% 2.2% 2.0% 2.1%
0.37 1.31 1.04 0.63 0.41 0.07 0.03 0.04 0.04 0.09 14.21 6.62 9.08 6.76 2.10 6.13 5.38 2.37 3.06 3.99 3.27 2.98
2.91 8.53 8.52 2.84 2.70 1.04 0.74 0.75 0.42 0.55 132.60 77.20 69.30 55.70 26.65 71.00 44.90 22.70 33.90 33.80 26.70 26.40
3.73 12.40 9.92 4.64 3.42 1.13 U/R 0.73 U/R U/R 156.08 81.30 95.12 64.96 27.51 U/R 53.73 26.20 35.50 U/R 32.60 U/R
Construction Contractors Arabtec Holding Drake & Scull International Al Khodari Sons Co Mohammad Al-Mojil Group Total
ARTC UH DSI UH ALKHODAR AB MMG AB
1,205.2 461.3 480.2 453.3
-13.9% -14.6% -20.0% -10.8%
-17.1% -24.5% -23.3% -18.3%
121.0% -23.7% -37.9% -42.5%
30.1 7.9 10.3 14.0 14.65
1.5 0.6 2.4 1.0 1.19
5.0% 8.0% 24.8% 11.2% 8.8%
1.7% 3.6% 7.4% 3.5% 2.0%
0.09 0.09 3.30 0.97
2.82 0.74 33.90 13.60
1.21 0.95 52.08 U/R
-57.1% SELL 28.2% STRONG BUY 53.6% STRONG BUY U/R U/R
Real Estate Dar Alarkan Emaar Economic City Saudi Real Estate Co (Akaria) Emaar Properties Aldar Properties Sorouh Real Estate Mabanee Salhia Real Estate Total
ALARKAN AB EMAAR AB SRECO AB EMAAR UH ALDAR UH SOROUH UH MABANEE KK SRE KK
2,879.8 2,198.5 822.3 4,626.9 1,123.3 678.9 2,065.1 479.2
-14.9% -27.3% -6.9% -10.3% -10.6% -15.2% -7.8% 4.8%
6.4% -0.5% -7.6% -10.6% -19.8% -26.4% 10.0% na
15.6% 32.9% 2.4% -12.8% -26.3% -28.6% 18.9% 22.6%
8.8 na 25.3 10.0 10.1 5.4 16.3 19.3 12.37
0.7 1.1 1.0 0.5 0.6 0.4 3.3 1.0 0.70
7.6% -0.5% 3.8% 5.3% 5.7% 6.9% 21.8% 5.2% 5.8%
5.1% -0.2% 3.6% 2.9% 1.1% 3.4% 10.8% 2.5% 2.8%
1.13 (0.04) 1.02 0.28 0.10 0.16 0.06 0.01
10.00 9.70 25.70 2.79 1.01 0.95 0.94 0.26
8.90 7.65 28.95 4.00 1.30 1.05 0.98 0.25
-11.0% SELL -21.1% SELL 12.6% BUY 43.4% STRONG BUY 28.7% STRONG BUY 10.5% BUY 4.3% HOLD -3.8% HOLD
Others Dubai Financial Market Total
DFM UH
1,988.6
-17.0%
-23.3%
-25.2%
77.0 77.04
1.0 0.96
1.3% 1.3%
1.2% 1.2%
0.01
0.91
0.90
28.2% 45.4% 16.4% 63.4% 26.7% 8.8% U/R -2.9% U/R U/R 17.7% 5.3% 37.3% 16.6% 3.2% U/R 19.7% 15.4% 4.7% U/R 22.1% U/R
-1.4%
STRONG BUY STRONG BUY BUY STRONG BUY STRONG BUY HOLD U/R HOLD U/R U/R BUY HOLD STRONG BUY BUY HOLD U/R BUY BUY HOLD U/R STRONG BUY U/R
HOLD
* All price in local currency as of 3 June 2012 Source: Bloomberg & Global Research
June - 2012
5
June – 2012 Dividend Yield
15.0%
0.0%
9.0% 5.0%
6.0%
3.0% 0.0%
-5.0% Yanbu National Petrochemicals Co
Al Rayan Bank
Etihad Etisalat Co
Qassim Cement Co
12.0%
Abu Dhabi National Energy
10.0% Al Rajhi Bank
Top 10 Gainers in 1 month
Kuwait Finance House
Emirates Telecommunications Corp
10.0%
Yamama Saudi Cement Co
25.0%
Oman Telecommunications Co
35.0%
Saudi Cement Co
40.0%
Vodafone Qatar
Return on Assets (ROA)
Industries Qatar
Drake & Scull International
Union National Bank
Aldar Properties
Emaar Properties
Air Arabia
Emirates NBD
Ras Al Khaimah Cement Co
Attractive P/E x
Bahrain Telecommunications Co
50.0% Ras Al Khaimah Ceramics Co
1.0
Qatar Electricity & Water Co
5.0
Yanbu Cement Co
0.6
Sorouh Real Estate
6.0
Jazeera Airways Co
Dana Gas
Yanbu National Petrochemicals Co
Bank Muscat
Emirates NBD
First Gulf Bank
Jazeera Airways Co
Sorouh Real Estate
Ras Al Khaimah Ceramics Co
Dana Gas
Union National Bank
Abu Dhabi National Energy
0.7
7.0
Salhia Real Estate
0.0% Saudi Arabian Fertilizers Co
Yanbu National Petrochemicals Co
Etihad Etisalat Co
Yanbu Cement Co
Oman Telecommunications Co
Qatar National Cement Co
Saudi Cement Co
Industries Qatar
Qassim Cement Co
Yamama Saudi Cement Co
Saudi Arabian Fertilizers Co
8.0
Raysut Cement Co
First Gulf Bank
Bahrain Telecommunications Co
Yamama Saudi Cement Co
Mobile Telecommunications Co
Saudi Arabian Fertilizers Co
Oman Cement Co
Doha Bank
Commercial Bank of Qatar
Abu Dhabi National Energy
Air Arabia
Global Research – GCC GCC Equity Monitor
Charts
Attractive P/BV x
0.5
4.0 0.4
3.0 0.3
2.0
0.2
0.1 -
Return on Equity (ROE)
45.0% 60.0%
50.0%
30.0% 40.0%
20.0%
30.0%
15.0% 20.0%
5.0% 10.0%
0.0%
Source: Glob al Research, Bloomb erg
6
Global Research – GCC
GCC Equity Monitor
Technical Overview: Kuwait Stock Exchange Kuwait Stock Exchange Price Index closed at 6,193.82 point. The market remains underpinned by its strong support line at around 6,100 point, knowing that the index should hold a close above there for a near-term upside rebound to be preserved, but a sudden dip below there would trigger the psychological level at 6,000 point and even more towards 5,900 point. On the bullish side, nearby resistance levels are located at 6,300 point and 6,400 point but only a cross over 6,537 point would alleviate the selling pressure and call for another leg up towards 6,770 point. The weekly and daily “RSI” indicators are currently looking negative. Strategy: Medium-term (11 weeks) investors can re-enter the market at levels higher than 6,300 point, while long-term investors who would like to stay should watch out if the index dips below 6,165 point. Index Name Sector Reuters’ RIC
Kuwait Stock Exchange Price Index Index
Last Trade (point) MACD* RSI** Moving Average (11 weeks) Moving Average (50 weeks) Support (1) ^ Support (2) ^ Resistance(1) ^^ Resistance(2) ^^ Trend Status
6,193.82 89.49 52.086
May 31, 2012
6,300 6,165 6,000 5,900 6,537 6,770 Neutral
Name of Index
Reuter' RIC
Close
Support
Weekly RSI 1
Kuwait Stock Exchange Price Index
Resistance 2
1
2
Strategy Medium
Long
Neutral
Moving Average 11
50
6,193.82
52.086
6,000
5,900
6,537
6,770
Neutral
6,300
6,165
6,975.27
42.675
6,500
6,200
7,200
7,640 Bearish Neutral
7,150
6,800
QE Index
8,416.83
38.465
8,260
8,000
8,500
9,000
Neutral
8,550
8,550
Abu Dhabi Price Index
2,441.03
40.550
2,350
2,292
2,475
2,535 Bearish Bearish
2,475
2,535
1,471.49
40.105
1,400
1,350
1,500
1,590 Bearish Bearish
1,540
1,540
MSM 30 Index
5,754.69
47.750
5,560
5,500
5,840
6,085
Neutral
Neutral
5,760
5,820
Bahrain All Share Index
1,139.58
38.800
1,126
1,100
1,165
1,200
Neutral Bearish
1,150
1,200
Saudi All Share Index
Dubai Financial Market Index
Neutral
Definitions: * A trend-following momentum indicator that shows the relationship between two moving averages of prices. When the MACD is above zero, the short-term average is above the long-term average, which signals upward momentum. The opposite is true. ** A technical momentum indicator that compares the magnitude of recent gains to recent losses in an attempt to determine overbought and oversold conditions of an asset. An asset is deemed to be overbought once the RSI approaches the 70 level, meaning that it may be getting overvalued and is a good candidate for a pullback. Likewise, if the RSI approaches 30, it is an indication that the asset may be getting oversold and therefore likely to become undervalued. × Moving average. Which is an arithmetic way and a tool used purpose of easing the price fluctuations to clarify the trend and differentiate between primary or secondary trend of prices and the normal fluctuations. ^ The price level which, historically, a stock has had difficulty falling below. It is thought of as the level at which a lot of buyers tend to enter the stock. ^^ The price at which a stock or market can trade, but can not exceed, for a certain period of time. The stock or market stops rising because sellers start to outnumber buyers. Disclaimer: This Technical Analysis is not an invitation to buy or sell, as it is “Global’s” opinion and speculation of future movement of the stock. Also it is not considered a sufficient material to rely on when taking financial and investment decisions. Investors should study the financial statement before taking any investment decision.
June – 2012
7
Global Research – GCC
GCC Equity Monitor
Disclosure The following is a comprehensive list of disclosures which may or may not apply to all our researches. Only the relevant disclosures which apply to this particular research has been mentioned in the table below under the heading of disclosure. Disclosure Checklist Company Abu Dhabi Commercial Bank Abu Dhabi National Energy Air Arabia Aldar Properties Al Rajhi Bank Al Rayan Bank Al Khodari Sons Company Arab National Bank Arabian Cement Co. Arabtec Holding PJSC Aramex Bahrain Telecommunications Company Bank Muscat Banque Saudi Fransi Burgan Bank Commercial Bank of Kuwait Dana Gas Dar Alarkan Doha Bank Drake & Scull International Dubai Financial Market Emaar Economic City Emaar Properties Emirates NBD Emirates Telecommunications Corporation Etihad Etisalat Company First Gulf Bank Industries Qatar Jazeera Airways Company Kuwait Finance House Mabanee Mobile Telecommunications Company Mohammad Al-Mojil Group National Bank of Abu Dhabi National Bank of Kuwait National Mobile Telecommunications Company Oman Cement Company Oman Telecommunications Company Qassim Cement Co Qatar Electricity & Water Company Qatar Islamic Bank Qatar National Bank Qatar National Cement Company Qatar Telecom
June – 2012
Recommendation STRONG BUY STRONG BUY STRONG BUY STRONG BUY U/R HOLD STRONG BUY STRONG BUY BUY SELL BUY HOLD U/R U/R U/R HOLD U/R SELL BUY STRONG BUY HOLD SELL STRONG BUY STRONG BUY STRONG BUY BUY STRONG BUY STRONG BUY STRONG BUY U/R HOLD STRONG BUY U/R BUY HOLD STRONG BUY HOLD HOLD HOLD STRONG BUY HOLD BUY BUY STRONG BUY
Bloomberg Ticker
Reuters Ticker
Price
Disclosure
ADCB UH TAQA UH AIRARABI UH ALDAR UH RJHI AB MARK QD ALKHODAR AB ARNB AB ARCCO AB ARTC UH ARMX UH BATELCO BI BKMB OM BSFR AB BURG KK CBK KK DANA UH ALARKAN AB DHBK QD DSI UH DFM UH EMAAR AB EMAAR UH EMIRATES UH ETISALAT UH EEC AB FGB UH IQCD QD JAZEERA KK KFIN KK MABANEE KK ZAIN KK MMG AB NBAD UH NBK KK NMTC KK OCOI OM OTEL OM QACCO AB QEWS QD QIBK QD QNBK QD QNCD QD QTEL QD
ADCB.AD TAQA.AD AIRA.DU ALDR.AD 1120.SE MARK.QA 1330.SE 1080.SE 3010.SE ARTC.DU ARMX.DU BTEL.BH BMAO.OM 1050.SE BURG.KW CBKK.KW DANA.AD 4300.SE DOBK.QA DSI.DU DFM.DU 4220.SE EMAR.DU ENBD.DU ETEL.AD 7020.SE FGB.AD IQCD.QA JAZK.KW KFIN.KW MABK.KW ZAIN.KW 1310.SE NBAD.AD NBKK.KW NMTC.KW OCCO.OM OTL.OM 3040.SE QEWC.QA QISB.QA QNBK.QA QANC.QA QTEL.QA
AED 2.91 AED 1.17 SAR 0.56 AED 1.01 SAR 71 QAR 26.65 SAR 33.9 SAR 26.7 SAR 56 AED 2.82 AED 1.79 BHD 0.472 OMR 0.552 SAR 33.8 KWD 0.415 KWD 0.75 AED 0.39 SAR 10 QAR 55.7 AED 0.741 AED 0.913 SAR 9.7 AED 2.79 AED 2.7 AED 8.77 SAR 64 AED 8.53 QAR 133.8 KWD 0.41 KWD 0.74 KWD 0.94 KWD 0.69 SAR 13.6 AED 8.52 KWD 1.04 KWD 2 OMR 0.678 OMR 1.324 SAR 78.5 QAR 139 QAR 77.2 QAR 132.6 QAR 104.6 QAR 112.1
1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10
8
Global Research – GCC
GCC Equity Monitor
Disclosure Checklist Company Ras Al Khaimah Cement Company Ras Al Khaimah Ceramics Co. Raysut Cement Company Riyad Bank Samba Financial Group Salhia Real Estate Saudi Arabia Fertilizers Company Saudi Basic Industries Corporation Saudi Cement Company Saudi Electricity Company Saudi Hollandi Bank Saudi International Petrochemichal Company Saudi Real Estate Co Saudi Telecom Company Sorouh Real Estate Commercial Bank of Qatar The Saudi British Bank Union National Bank Vodafone Qatar Yamama Saudi Cement Company Yanbu Cement Co Yanbu National Petrochemicals Company
Recommendation
Bloomberg Ticker
U/R U/R U/R BUY BUY HOLD STRONG BUY STRONG BUY HOLD HOLD U/R STRONG BUY BUY BUY BUY STRONG BUY HOLD STRONG BUY SELL BUY SELL STRONG BUY
RAKCC UH RAKCEC UH RCCI OM RIBL AB SAMBA AB SRE KK SAFCO AB SABIC AB SACCO AB SECO AB AAAL AB SIPCHEM AB SRECO AB STC AB SOROUH UH CBQK QD SABB AB UNB UH VFQS QD YACCO AB YNCCO AB YANSAB AB
Reuters Ticker
Price
Disclosure
RAKC.AD AED 0.71 RKCE.AD AED 1.33 RAYC.OM OMR 1.305 1010.SE SAR 22.7 1090.SE SAR 44.9 SREK.KW KWD 0.26 2020.SE SAR 170.75 2010.SE SAR 90.75 3030.SE SAR 89.25 5110.SE SAR 12.95 1040.SE SAR 26.4 2310.SE SAR 18.8 4020.SE SAR 25.7 4110.SE SAR 40 SOR.AD AED 0.95 COMB.QA QAR 69.3 1060.SE SAR 33.9 UNB.AD AED 2.84 VFQS.QA QAR 9.03 3020.SE SAR 47.8 3060.SE SAR 77 2290.SE SAR 43.7
1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10
1. Global Investment House did not receive and will not receive any compensation from the company or anyone else for the preparation of this report. 2. The company being researched holds more than 5% stake in Global Investment House. 3. Global Investment House makes a market in securities issued by this company. 4. Global Investment House acts as a corporate broker or sponsor to this company. 5. The author of or an individual who assisted in the preparation of this report (or a member of his/her household) has a direct ownership position in securities issued by this company. 6. An employee of Global Investment House serves on the board of directors of this company. 7. Within the past year , Global Investment House has managed or co-managed a public offering for this company, for which it received fees. 8. Global Investment House has received compensation from this company for the provision of investment banking or financial advisory services within the past year. 9. Global Investment House expects to receive or intends to seek compensation for investment banking services from this company in the next three months. 10. Please see special footnote below for other relevant disclosures. Global Research: Equity Ratings Definitions Global Rating STRONG BUY BUY HOLD SELL U/R
June – 2012
Definition Fair value of the stock is Fair value of the stock is Fair value of the stock is Fair value of the stock is Fair value of the stock is
>20% from the current market price between +10% and +20% from the current market price between +10% and -10% from the current market price < -10% from the current market price Under Review
9
Global Research – GCC
GCC Equity Monitor
Disclaimer This material was produced by Global Investment House KSCC (‘Global’),a firm regulated by the Central Bank of Kuwait. This document is not to be used or considered as an offer to sell or a solicitation of an offer to buy any securities. Global may, from time to time to the extent permitted by law, participate or invest in other financing transactions with the issuers of the securities (‘securities’), perform services for or solicit business from such issuer, and/or have a position or effect transactions in the securities or options thereof. Global may, to the extent permitted by applicable Kuwaiti law or other applicable laws or regulations, effect transactions in the securities before this material is published to recipients. Information and opinions contained herein have been compiled or arrived by Global from sources believed to be reliable, but Global has not independently verified the contents of this document. Accordingly, no representation or warranty, express or implied, is made as to and no reliance should be placed on the fairness, accuracy, completeness or correctness of the information and opinions contained in this document. Global accepts no liability for any loss arising from the use of this document or its contents or otherwise arising in connection therewith. This document is not to be relied upon or used in substitution for the exercise of independent judgment. Global shall have no responsibility or liability whatsoever in respect of any inaccuracy in or omission from this or any other document prepared by Global for, or sent by Global to any person and any such person shall be responsible for conducting his own investigation and analysis of the information contained or referred to in this document and of evaluating the merits and risks involved in the securities forming the subject matter of this or other such document. Opinions and estimates constitute our judgment and are subject to change without prior notice. Past performance is not indicative of future results. This document does not constitute an offer or invitation to subscribe for or purchase any securities, and neither this document nor anything contained herein shall form the basis of any contract or commitment whatsoever. It is being furnished to you solely for your information and may not be reproduced or redistributed to any other person. Neither this report nor any copy hereof may be distributed in any jurisdiction outside Kuwait where its distribution may be restricted by law. Persons who receive this report should make themselves aware of and adhere to any such restrictions. By accepting this report you agree to be bound by the foregoing limitations.
June – 2012
10
Global Research – GCC
GCC Equity Monitor
Global Investment House Website: www.globalinv.net Global Tower Sharq, Al-Shuhada Str. Tel. + (965) 2 295 1000 Fax. + (965) 2 295 1005 P.O. Box: 28807 Safat, 13149 Kuwait
Research Faisal Hasan, CFA (965) 2295-1270 [email protected]
Brokerage Fouad Fahmi Darwish (965) 2295-1700 [email protected]
Wealth Management - Kuwait Rasha Al-Qenaei (965) 2295-1380 [email protected]
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Global Kuwait Tel: (965) 2 295 1000 Fax: (965) 2 295 1005 P.O.Box 28807 Safat, 13149 Kuwait
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Global Wealth Manager E-mail: [email protected] Tel: (965) 1-804-242
June – 2012
11
GCC Equity Monitor GCC ROE & P/BV
GCC Country Performance
24%
Country
1M
3M
12M
P/E*
P/BV*
DY (%)
Bahrain
-1.7%
-0.8%
-15.0%
9.3
0.9
5.4%
Kuwait
-5.0%
-3.1%
-8.7%
13.1
1.6
3.9%
Oman
-2.4%
-2.2%
-5.9%
8.4
1.4
6.9%
Qatar
-3.9%
-4.7%
1.1%
9.5
1.9
4.9%
-10.6%
-8.2%
1.8%
9.5
1.6
4.5%
22% Qatar 2012e ROE
20% KSA
18%
Oman
16%
GCC
14% UAE
12%
Kuwait
KSA
10% 0.5
1.0
1.5
2.0
2.5
3.0
2012e P/BV
GCC PE & Earnings Grow th
UAE-Abu Dhabi
-3.0%
-8.1%
-9.2%
7.5
1.1
5.9%
UAE-Dubai
-8.9%
-17.8%
-8.0%
10.2
0.6
4.3%
Source: Global Research, Bloomberg, Zawya * 2012e
19% Kuwait
Top Fundamental Picks
Earnings Grwoth
17% UAE 15%
Arabian Cement Co. (KSA), CMP: SAR56.00, Target Price: SAR66.90
Qatar
13%
GCC
11% KSA
9%
Oman
7% 5%
5.0
7.0
9.0
11.0
13.0
15.0
2012e P/E
Arabian Cement is trading at a low P/E estimate of 8.4x for 2012. The company exhibited a stellar growth of 90.6% in profits for 1Q12 attributed to the huge construction activity witnessed in the western region of KSA. ACC managed to increase production by 300,000tons which will help it meet continuously rising demand in the western region and the Kingdom as a whole. However Arabian Cement is incurring losses from it Jordanian subsidiary, but with the current restructuring plan, cost rationalization and improving efficiency, the Jordanian subsidiary will be of great importance in the future for the company.
World & GCC Indices YTD
Emirates NBD (UAE), CMP: AED2.70, Target Price: AED3.42 27.7%
7.9%
6.5% 5.7% 0.3%
3.3%
1.0%
-0.5%
-1.2%
-5.1%
US
India
So urce: Glo bal Research, B lo o mberg A s o f 03 June 2012
China
Egypt
Kuwait
Jordan
Bahrain
UAE-Abu Dhabi
KSA
UAE -Dubai
-6.8% Oman
Qatar
1.6%
Emirates NBD has an immense sovereign exposure to Dubai and has been under pressure lately following new regulations by the CBUAE capping lending and asking banks to comply by September 2012. There has been news in the market about possible postponement of the compliance date for the said regulations on a case to case basis for heavily exposed banks. We see this as a positive development, whereby the bank will be allowed to reach compliant levels amicably, minimizing the adverse impact on its books and profitability. ENBD is trading at the lowest P/BV within the sector, coupled with a hard-to-ignore upside potential.
Commercial Bank of Qatar (Qatar), CMP: QAR69.30, Target Price: QAR95.12 CBQ continues to be our top pick given its relatively strong balance sheet and solid long-term funding and capitalization base. The stock has come under pressure in recent times largely due to concerns on foreign funding which we believe is overdone. The stock offers a combination of both value and growth and is expected to do well in the near term.
Top Technical Picks
Global Research [email protected] Tel.: (965) 22951270
Global Investment House www.globalinv.net
KFH’s stock price closed at KWD0.750. A temporarily double bottom has been formed on the weekly chart at KWD0.680, while the long bullish candle seen recently could suggest the start of a new bullish trend. However, it is important to know that overhead resistance levels are intense as we have KWD0.760, KWD0.820 and KWD0.880 but for an aggressive bullish tone to take place, the stock should show strong buying potential above the critical resistance line at KWD1.120. On the counter side, losing KWD0.680 would trigger KWD0.610. The weekly and daily “RSI” indicators are looking neutral at present. Strategy: Medium-term (11 weeks) investors should be aware as the price is near the moving average for this period at KWD0.740, while long-term (50 weeks) investors can only buy above KWD0.820.
Global Research - GCC
GCC Equity Monitor
GCC Universe by Country
Global Research - GCC Universe UAE Abu Dhabi Commercial Bank Dana Gas Emirates Telecommunications Corp First Gulf Bank National Bank of Abu Dhabi Ras Al Khaimah Cement Co Ras Al Khaimah Ceramics Co Abu Dhabi National Energy Union National Bank Air Arabia Arabtec Holding PJSC Dubai Financial Market Drake & Scull International Emirates NBD Aramex Emaar Properties Aldar Properties Sorouh Real Estate Total
Bloomberg Ticker
ADCB UH DANA UH ETISALAT UH FGB UH NBAD UH RAKCC UH RAKCEC UH TAQA UH UNB UH AIRARABI UH ARTC UH DFM UH DSI UH EMIRATES UH ARMX UH EMAAR UH ALDAR UH SOROUH UH
Kuwait Mobile Telecommunications Co ZAIN KK National Bank of Kuwait NBK KK Kuwait Finance House KFIN KK Commercial Bank of Kuwait CBK KK National Mobile Telecommunications Co NMTC KK Jazeera Airways Co JAZEERA KK Burgan Bank BURG KK Mabanee MABANEE KK Salhia Real Estate SRE KK Total Oman Oman Telecommunications Co Bank Muscat Raysut Cement Co Oman Cement Co Total
June - 2012
OTEL OM BKMB OM RCCI OM OCOI OM
Mkt. Cap USD mn
Stock Performance 1M 3M 12M
P/E 2012e
P/BV 2012e
ROE 2012e
ROA 2012e
EPS 2012e
Current Price
Target Price
4,433.2 700.8 18,877.4 6,967.1 8,987.5 93.6 269.3 1,982.9 1,929.6 711.5 1,205.2 1,988.6 461.3 4,085.5 713.5 4,626.9 1,123.3 678.9
-7.9% -11.4% 1.4% -5.1% -3.5% -4.1% -11.3% 0.0% -5.0% -7.7% -13.9% -17.0% -14.6% -5.3% -1.1% -10.3% -10.6% -15.2%
-12.3% -25.0% -6.1% -20.7% -0.8% -11.3% -21.8% -9.3% -10.4% -25.8% -17.1% -23.3% -24.5% -18.2% -7.7% -10.6% -19.8% -26.4%
-0.7% -40.0% -15.3% -5.2% 2.2% -21.1% -32.8% -4.9% -25.7% -20.3% 121.0% -25.2% -23.7% -32.2% -3.2% -12.8% -26.3% -28.6%
7.9 4.7 9.4 6.5 8.2 nm 5.0 4.0 4.5 9.6 30.1 77.0 7.9 6.6 11.3 10.0 10.1 5.4 8.05
0.9 0.3 1.7 1.1 1.3 0.5 0.4 0.7 0.6 0.5 1.5 1.0 0.6 0.5 1.3 0.5 0.6 0.4 0.90
11.8% 6.0% 18.2% 17.8% 16.6% 0.0% 7.5% 17.9% 13.7% 5.2% 5.0% 1.3% 8.0% 7.2% 11.9% 5.3% 5.7% 6.9% 11.6%
1.1% 4.2% 9.6% 2.4% 1.5% 0.0% 3.3% 1.6% 1.9% 3.7% 1.7% 1.2% 3.6% 0.8% 9.0% 2.9% 1.1% 3.4% 2.0%
0.37 0.08 0.93 1.31 1.04 0.00 0.26 0.30 0.63 0.06 0.09 0.01 0.09 0.41 0.16 0.28 0.10 0.16
2.91 0.39 8.77 8.53 8.52 0.71 1.33 1.17 2.84 0.56 2.82 0.91 0.74 2.70 1.79 2.79 1.01 0.95
3.73 U/R 11.10 12.40 9.92 U/R U/R 1.79 4.64 0.76 1.21 0.90 0.95 3.42 2.00 4.00 1.30 1.05
10,683.7 16,274.8 7,725.0 3,429.2 3,623.5 356.6 2,304.7 2,065.1 479.2
-6.8% -3.7% 0.0% -6.3% -15.3% -3.5% -5.7% -7.8% 4.8%
-19.8% -4.7% -4.9% 5.6% -1.0% -5.1% -6.3% 10.0% 23.8%
-32.4% -3.1% -21.6% -17.6% 2.0% 142.5% -16.2% 18.9% 22.6%
9.0 14.0 27.6 21.2 9.9 5.6 10.8 16.3 19.3 13.07
1.3 2.0 1.8 1.7 1.1 2.2 1.3 3.3 1.0 1.62
14.9% 14.5% 6.6% 8.2% 11.2% 50.4% 12.6% 21.8% 5.2% 12.6%
9.9% 2.3% 0.6% 1.2% 7.4% 9.6% 1.3% 10.8% 2.5% 2.4%
0.08 0.07 0.03 0.04 0.20 0.07 0.04 0.06 0.01
0.69 1.04 0.74 0.75 2.00 0.41 0.42 0.94 0.26
0.86 1.13 U/R 0.73 2.59 0.56 U/R 0.98 0.25
2,579.2 2,598.0 677.9 582.7
1.5% -10.8% 5.2% -2.2%
-5.7% -13.9% 50.0% 35.3%
20.5% -14.7% 20.8% 20.6%
8.6 6.9 17.8 11.2 8.41
1.8 1.0 2.6 1.5 1.40
22.5% 15.5% 14.3% 13.4% 17.4%
16.0% 2.0% 7.8% 11.5% 3.5%
0.15 0.09 0.07 0.06
1.32 0.55 1.31 0.68
1.45 U/R U/R 0.70
Upside / (Downside) 28.2% U/R 26.6% 45.4% 16.4% U/R U/R 53.1% 63.4% 36.6% -57.1% -1.4% 28.2% 26.7% 11.7% 43.4% 28.7% 10.5%
Rating
STRONG BUY U/R STRONG BUY STRONG BUY BUY U/R U/R STRONG BUY STRONG BUY STRONG BUY SELL HOLD STRONG BUY STRONG BUY BUY STRONG BUY STRONG BUY BUY
25.0% STRONG BUY 8.8% HOLD U/R U/R -2.9% HOLD 29.6% STRONG BUY 36.1% STRONG BUY U/R U/R 4.3% HOLD -3.8% HOLD
9.9% U/R U/R 2.9%
HOLD U/R U/R HOLD
2
Global Research – GCC
GCC Equity Monitor
GCC Universe by Country (cont) Global Research - GCC Universe Qatar Qatar National Bank Industries Qatar Qatar Telecom Vodafone Qatar Qatar Islamic Bank Commercial Bank of Qatar Qatar Electricity & Water Co Doha Bank Al Rayan Bank Qatar National Cement Co Total Saudi Arabia Saudi Basic Industries Corp Al Rajhi Bank Saudi Telecom Co Samba Financial Group Saudi Electricity Co Riyad Bank Saudi British Bank Banque Saudi Fransi Etihad Etisalat Co Arab National Bank Saudi Arabian Fertilizers Co Yanbu National Petrochemicals Co Saudi Hollandi Bank Saudi International Petrochemical Co Yamama Saudi Cement Co Arabian Cement Co Saudi Cement Co Dar Alarkan Emaar Economic City Saudi Real Estate Co Al Khodari Sons Co Yanbu Cement Co Qassim Cement Co Mohammad Al-Mojil Group Total Bahrain Bahrain Telecommunications Co
Bloomberg Ticker
Mkt. Cap USD mn
Stock Performance 1M 3M 12M
P/E 2012e
P/BV 2012e
ROE 2012e
ROA 2012e
EPS 2012e
Current Price
Target Price
Upside / (Downside)
Rating
QNBK QD IQCD QD QTEL QD VFQS QD QIBK QD CBQK QD QEWS QD DHBK QD MARK QD QNCD QD
25,483.8 20,212.0 7,044.6 2,096.7 5,010.3 4,709.8 3,817.7 3,162.1 5,489.7 1,410.6
-0.7% -8.5% -7.4% 1.5% -1.0% -3.7% -1.6% -2.1% -0.2% -1.4%
-1.0% -5.4% 1.5% 23.0% -1.2% -9.9% -5.4% -9.4% 0.6% -7.8%
7.1% -2.1% 10.3% 15.2% 0.3% -3.3% -2.9% 9.9% 16.9% -7.1%
10.3 7.6 8.7 na 11.7 7.6 8.9 8.2 12.7 11.5 9.47
2.1 2.4 1.1 1.2 1.7 1.3 3.9 1.8 2.3 2.1 1.91
21.5% 33.9% 13.4% -4.1% 15.1% 17.3% 47.5% 22.5% 18.9% 19.0% 21.2%
2.8% 24.4% 2.8% -3.3% 2.5% 3.0% 7.0% 2.6% 2.6% 16.8% 4.0%
14.21 17.53 12.87 (0.32) 6.62 9.08 15.70 6.76 2.10 9.12
132.60 133.80 112.10 9.03 77.20 69.30 139.00 55.70 26.65 104.60
156.08 170.90 151.67 7.49 81.30 95.12 180.81 64.96 27.51 125.40
17.7% 27.7% 35.3% -17.0% 5.3% 37.3% 30.1% 16.6% 3.2% 19.9%
BUY STRONG BUY STRONG BUY SELL HOLD STRONG BUY STRONG BUY BUY HOLD BUY
SABIC AB RJHI AB STC AB SAMBA AB SECO AB RIBL AB SABB AB BSFR AB EEC AB ARNB AB SAFCO AB YANSAB AB AAAL AB SIPCHEM AB YACCO AB ARCCO AB SACCO AB ALARKAN AB EMAAR AB SRECO AB ALKHODAR AB YNCCO AB QACCO AB MMG AB
72,594.2 28,397.7 21,331.6 10,775.1 14,387.5 9,079.3 9,039.1 8,147.5 11,945.7 6,062.2 11,382.4 6,554.5 2,794.0 1,838.1 2,581.0 1,194.6 3,641.1 2,879.8 2,198.5 822.3 480.2 2,155.8 1,883.8 453.3
-12.1% -9.3% -5.2% -11.1% -5.1% -9.0% -5.8% -11.1% -5.9% -13.3% -7.7% -17.2% -7.4% -13.6% -5.3% -5.5% -7.0% -14.9% -27.3% -6.9% -20.0% 2.7% -4.8% -10.8%
-10.8% -12.1% 2.8% -12.8% -10.1% -12.4% -2.4% -8.0% 1.2% -16.3% -8.8% -14.7% -1.3% -16.4% -14.3% 5.7% -4.0% 6.4% -0.5% -7.6% -23.3% 12.0% -9.5% -18.3%
-12.9% -4.4% 7.5% -13.7% -11.3% -8.3% 4.9% -8.0% 27.4% -12.7% -4.1% -6.6% 6.3% -12.6% 15.6% 30.8% 43.4% 15.6% 32.9% 2.4% -37.9% 46.7% 15.9% -42.5%
8.7 11.6 9.2 8.3 18.2 9.6 11.1 8.5 8.1 8.2 9.7 7.1 8.9 10.2 9.5 8.4 12.4 8.8 na 25.3 10.3 11.0 12.7 14.0 9.60
1.6 3.4 1.5 1.3 1.0 1.1 1.8 1.4 2.1 1.3 4.8 1.8 1.3 1.2 2.7 1.5 3.9 0.7 1.1 1.0 2.4 2.4 3.6 1.0 1.66
20.6% 28.5% 17.5% 16.3% 5.5% 11.8% 16.9% 17.7% 28.1% 16.2% 51.6% 29.0% 15.4% 12.0% 29.2% 18.2% 32.6% 7.6% -0.5% 3.8% 24.8% 23.9% 28.4% 11.2% 18.2%
8.9% 4.0% 7.3% 2.4% 1.3% 1.9% 2.1% 2.5% 14.3% 2.2% 45.6% 13.6% 2.0% 4.9% 26.4% 12.0% 23.0% 5.1% -0.2% 3.6% 7.4% 15.9% 26.1% 3.5% 4.7%
10.43 90.75 6.13 71.00 4.35 40.00 5.38 44.90 0.71 12.95 2.37 22.70 3.06 33.90 3.99 33.80 7.93 64.00 3.27 26.70 17.61 170.75 6.18 43.70 2.98 26.40 1.84 18.80 5.02 47.80 6.63 56.00 7.19 89.25 1.13 10.00 (0.04) 9.70 1.02 25.70 3.30 33.90 7.01 77.00 6.19 78.50 0.97 13.60
118.60 U/R 44.00 53.73 13.80 26.20 35.50 U/R 73.00 32.60 220.70 57.80 U/R 23.60 56.40 66.90 86.10 8.90 7.65 28.95 52.08 66.80 77.00 U/R
30.7% U/R 10.0% 19.7% 6.6% 15.4% 4.7% U/R 14.1% 22.1% 29.3% 32.3% U/R 25.5% 18.0% 19.5% -3.5% -11.0% -21.1% 12.6% 53.6% -13.2% -1.9% U/R
STRONG BUY U/R BUY BUY HOLD BUY HOLD U/R BUY STRONG BUY STRONG BUY STRONG BUY U/R STRONG BUY BUY BUY HOLD SELL SELL BUY STRONG BUY SELL HOLD U/R
1,802.8
2.2%
21.0%
9.3%
8.3
1.2
15.3%
12.1%
0.50
6.8%
HOLD
BATELCO BI
0.06
0.47
* All price in local currency as of 3 June 2012 Source: Bloomberg & Global Research
June - 2012
3
Global Research – GCC
GCC Equity Monitor
GCC Universe by Sector Global Research - GCC Universe Cement & Building Material Ras Al Khaimah Cement Co Ras Al Khaimah Ceramics Co Raysut Cement Co Oman Cement Co Qatar National Cement Co Yamama Saudi Cement Co Arabian Cement Co Yanbu Cement Co Qassim Cement Co Saudi Cement Co Total
Bloomberg Ticker Mkt. Cap USD mn RAKCC UH RAKCEC UH RCCI OM OCOI OM QNCD QD YACCO AB ARCCO AB YNCCO AB QACCO AB SACCO AB
Transportation and Logistics Aramex Air Arabia Jazeera Airways Co Total
June - 2012
Stock Performance 3M 12M
P/E 2012e
P/BV 2012e
ROE 2012e
ROA 2012e
EPS 2012e
Current Price
Target Price
Upside / (Downside)
Rating
93.6 269.3 677.9 582.7 1,410.6 2,581.0 1,194.6 2,155.8 1,883.8 3,641.1
-4.1% -11.3% 5.2% -2.2% -1.4% -5.3% -5.5% 2.7% -4.8% -7.0%
-11.3% -21.8% 50.0% 35.3% -7.8% -14.3% 5.7% 12.0% -9.5% -4.0%
-21.1% -32.8% 20.8% 20.6% -7.1% 15.6% 30.8% 46.7% 15.9% 43.4%
nm 5.0 17.8 11.2 11.5 9.5 8.4 11.0 12.7 12.4 11.00
0.5 0.4 2.6 1.5 2.1 2.7 1.5 2.4 3.6 3.9 2.28
0.0% 7.5% 14.3% 13.4% 19.0% 29.2% 18.2% 23.9% 28.4% 32.6% 21.4%
0.0% 3.3% 7.8% 11.5% 16.8% 26.4% 12.0% 15.9% 26.1% 23.0% 15.0%
0.00 0.26 0.07 0.06 9.12 5.02 6.63 7.01 6.19 7.19
0.71 1.33 1.31 0.68 104.60 47.80 56.00 77.00 78.50 89.25
U/R U/R U/R 0.70 125.40 56.40 66.90 66.80 77.00 86.10
U/R U/R U/R 2.9% 19.9% 18.0% 19.5% -13.2% -1.9% -3.5%
U/R U/R U/R HOLD BUY BUY BUY SELL HOLD HOLD
18,877.4 1,802.8 10,683.7 3,623.5 2,579.2 7,044.6 2,096.7 21,331.6 11,945.7
1.4% 2.2% -6.8% -15.3% 1.5% -7.4% 1.5% -5.2% -5.9%
-6.1% 21.0% -19.8% -1.0% -5.7% 1.5% 23.0% 2.8% 1.2%
-15.3% 9.3% 0.0% 2.0% 20.5% 10.3% 15.2% 7.5% 27.4%
9.4 8.3 9.0 9.9 8.6 8.7 na 9.2 8.1 9.31
1.7 1.2 1.3 1.1 1.8 1.1 1.2 1.5 2.1 1.51
18.2% 15.3% 14.9% 11.2% 22.5% 13.4% -4.1% 17.5% 28.1% 5.8%
9.6% 12.1% 9.9% 7.4% 16.0% 2.8% -3.3% 7.3% 14.3% 7.4%
0.93 0.06 0.08 0.20 0.15 12.87 (0.32) 4.35 7.93
8.77 0.47 0.69 2.00 1.32 112.10 9.03 40.00 64.00
11.10 0.50 0.86 2.59 1.45 151.67 7.49 44.00 73.00
26.6% 6.8% 25.0% 29.6% 9.9% 35.3% -17.0% 10.0% 14.1%
STRONG BUY HOLD STRONG BUY STRONG BUY HOLD STRONG BUY SELL BUY BUY
DANA UH IQCD QD SABIC AB SAFCO AB YANSAB AB SIPCHEM AB
700.8 20,212.0 72,594.2 11,382.4 6,554.5 1,838.1
-11.4% -8.5% -12.1% -7.7% -17.2% -13.6%
-25.0% -5.4% -10.8% -8.8% -14.7% -16.4%
-40.0% -2.1% -12.9% -4.1% -6.6% -12.6%
4.7 7.6 8.7 9.7 7.1 10.2 8.44
0.3 2.4 1.6 4.8 1.8 1.2 1.81
6.0% 33.9% 20.6% 51.6% 29.0% 12.0% 23.2%
4.2% 24.4% 8.9% 45.6% 13.6% 4.9% 11.0%
0.08 17.53 10.43 17.61 6.18 1.84
0.39 133.80 90.75 170.75 43.70 18.80
U/R 170.90 118.60 220.70 57.80 23.60
U/R 27.7% 30.7% 29.3% 32.3% 25.5%
U/R STRONG BUY STRONG BUY STRONG BUY STRONG BUY STRONG BUY
TAQA UH QEWS QD SECO AB
1,982.9 3,817.7 14,387.5
0.0% -1.6% -5.1%
-9.3% -5.4% -10.1%
-4.9% -2.9% -11.3%
4.0 8.9 18.2 11.71
0.7 3.9 1.0 1.08
17.9% 47.5% 5.5% 9.6%
1.6% 7.0% 1.3% 1.8%
0.30 15.70 0.71
1.17 139.00 12.95
1.79 180.81 13.80
53.1% STRONG BUY 30.1% STRONG BUY 6.6% HOLD
713.5 711.5 356.6
-1.1% -7.7% -3.5%
-7.7% -25.8% -5.1%
-3.2% -20.3% 142.5%
11.3 9.6 5.6 8.85
1.3 0.5 2.2 0.84
11.9% 5.2% 50.4% 9.7%
9.0% 3.7% 9.6% 6.0%
0.16 0.06 0.07
1.79 0.56 0.41
2.00 0.76 0.56
11.7% BUY 36.6% STRONG BUY 36.1% STRONG BUY
Telecom Emirates Telecommunications Corp ETISALAT UH Bahrain Telecommunications Co BATELCO BI Mobile Telecommunications Co ZAIN KK National Mobile Telecommunications Co NMTC KK Oman Telecommunications Co OTEL OM Qatar Telecom QTEL QD Vodafone Qatar VFQS QD Saudi Telecom Co STC AB Etihad Etisalat Co EEC AB Total Petrochemicals Dana Gas Industries Qatar Saudi Basic Industries Corp Saudi Arabia Fertilizers Co Yanbu National Petrochemicals Co Saudi International Petrochemichal Co Total Utilities Abu Dhabi National Energy Qatar Electricity & Water Co Saudi Electricity Co Total
1M
ARMX UH AIRARABI UH JAZEERA KK
4
Global Research – GCC
GCC Equity Monitor
GCC Universe by Sector (cont) Global Research - GCC Universe
Bloomberg Ticker Mkt. Cap USD mn
1M
Stock Performance 3M 12M
P/E 2012e
P/BV 2012e
ROE 2012e
ROA 2012e
EPS 2012e
Current Price
Target Price
Upside / (Downside)
Rating
Banks Abu Dhabi Commercial Bank First Gulf Bank National Bank of Abu Dhabi Union National Bank Emirates NBD National Bank of Kuwait Kuwait Finance House Commercial Bank of Kuwait Burgan Bank Bank Muscat Qatar National Bank Qatar Islamic Bank Commercial Bank of Qatar Doha Bank Al Rayan Bank Al Rajhi Bank Samba Financial Group Riyad Bank Saudi British Bank Banque Saudi Fransi Arab National Bank Saudi Hollandi Bank Total
ADCB UH FGB UH NBAD UH UNB UH EMIRATES UH NBK KK KFIN KK CBK KK BURG KK BKMB OM QNBK QD QIBK QD CBQK QD DHBK QD MARK QD RJHI AB SAMBA AB RIBL AB SABB AB BSFR AB ARNB AB AAAL AB
4,433.2 6,967.1 8,987.5 1,929.6 4,085.5 16,274.8 7,725.0 3,429.2 2,304.7 2,598.0 25,483.8 5,010.3 4,709.8 3,162.1 5,489.7 28,397.7 10,775.1 9,079.3 9,039.1 8,147.5 6,062.2 2,794.0
-7.9% -5.1% -3.5% -5.0% -5.3% -3.7% 0.0% -6.3% -5.7% -10.8% -0.7% -1.0% -3.7% -2.1% -0.2% -9.3% -11.1% -9.0% -5.8% -11.1% -13.3% -7.4%
-12.3% -20.7% -0.8% -10.4% -18.2% -4.7% -4.9% 5.6% -6.3% -13.9% -1.0% -1.2% -9.9% -9.4% 0.6% -12.1% -12.8% -12.4% -2.4% -8.0% -16.3% -1.3%
-0.7% -5.2% 2.2% -25.7% -32.2% -3.1% -21.6% -17.6% -16.2% -14.7% 7.1% 0.3% -3.3% 9.9% 16.9% -4.4% -13.7% -8.3% 4.9% -8.0% -12.7% 6.3%
7.9 6.5 8.2 4.5 6.6 14.0 27.6 21.2 10.8 6.9 10.3 11.7 7.6 8.2 12.7 11.6 8.3 9.6 11.1 8.5 8.2 8.9 9.93
0.9 1.1 1.3 0.6 0.5 2.0 1.8 1.7 1.3 1.0 2.1 1.7 1.3 1.8 2.3 3.4 1.3 1.1 1.8 1.4 1.3 1.3 1.55
11.8% 17.8% 16.6% 13.7% 7.2% 14.5% 6.6% 8.2% 12.6% 15.5% 21.5% 15.1% 17.3% 22.5% 18.9% 28.5% 16.3% 11.8% 16.9% 17.7% 16.2% 15.4% 16.1%
1.1% 2.4% 1.5% 1.9% 0.8% 2.3% 0.6% 1.2% 1.3% 2.0% 2.8% 2.5% 3.0% 2.6% 2.6% 4.0% 2.4% 1.9% 2.1% 2.5% 2.2% 2.0% 2.1%
0.37 1.31 1.04 0.63 0.41 0.07 0.03 0.04 0.04 0.09 14.21 6.62 9.08 6.76 2.10 6.13 5.38 2.37 3.06 3.99 3.27 2.98
2.91 8.53 8.52 2.84 2.70 1.04 0.74 0.75 0.42 0.55 132.60 77.20 69.30 55.70 26.65 71.00 44.90 22.70 33.90 33.80 26.70 26.40
3.73 12.40 9.92 4.64 3.42 1.13 U/R 0.73 U/R U/R 156.08 81.30 95.12 64.96 27.51 U/R 53.73 26.20 35.50 U/R 32.60 U/R
Construction Contractors Arabtec Holding Drake & Scull International Al Khodari Sons Co Mohammad Al-Mojil Group Total
ARTC UH DSI UH ALKHODAR AB MMG AB
1,205.2 461.3 480.2 453.3
-13.9% -14.6% -20.0% -10.8%
-17.1% -24.5% -23.3% -18.3%
121.0% -23.7% -37.9% -42.5%
30.1 7.9 10.3 14.0 14.65
1.5 0.6 2.4 1.0 1.19
5.0% 8.0% 24.8% 11.2% 8.8%
1.7% 3.6% 7.4% 3.5% 2.0%
0.09 0.09 3.30 0.97
2.82 0.74 33.90 13.60
1.21 0.95 52.08 U/R
-57.1% SELL 28.2% STRONG BUY 53.6% STRONG BUY U/R U/R
Real Estate Dar Alarkan Emaar Economic City Saudi Real Estate Co (Akaria) Emaar Properties Aldar Properties Sorouh Real Estate Mabanee Salhia Real Estate Total
ALARKAN AB EMAAR AB SRECO AB EMAAR UH ALDAR UH SOROUH UH MABANEE KK SRE KK
2,879.8 2,198.5 822.3 4,626.9 1,123.3 678.9 2,065.1 479.2
-14.9% -27.3% -6.9% -10.3% -10.6% -15.2% -7.8% 4.8%
6.4% -0.5% -7.6% -10.6% -19.8% -26.4% 10.0% na
15.6% 32.9% 2.4% -12.8% -26.3% -28.6% 18.9% 22.6%
8.8 na 25.3 10.0 10.1 5.4 16.3 19.3 12.37
0.7 1.1 1.0 0.5 0.6 0.4 3.3 1.0 0.70
7.6% -0.5% 3.8% 5.3% 5.7% 6.9% 21.8% 5.2% 5.8%
5.1% -0.2% 3.6% 2.9% 1.1% 3.4% 10.8% 2.5% 2.8%
1.13 (0.04) 1.02 0.28 0.10 0.16 0.06 0.01
10.00 9.70 25.70 2.79 1.01 0.95 0.94 0.26
8.90 7.65 28.95 4.00 1.30 1.05 0.98 0.25
-11.0% SELL -21.1% SELL 12.6% BUY 43.4% STRONG BUY 28.7% STRONG BUY 10.5% BUY 4.3% HOLD -3.8% HOLD
Others Dubai Financial Market Total
DFM UH
1,988.6
-17.0%
-23.3%
-25.2%
77.0 77.04
1.0 0.96
1.3% 1.3%
1.2% 1.2%
0.01
0.91
0.90
28.2% 45.4% 16.4% 63.4% 26.7% 8.8% U/R -2.9% U/R U/R 17.7% 5.3% 37.3% 16.6% 3.2% U/R 19.7% 15.4% 4.7% U/R 22.1% U/R
-1.4%
STRONG BUY STRONG BUY BUY STRONG BUY STRONG BUY HOLD U/R HOLD U/R U/R BUY HOLD STRONG BUY BUY HOLD U/R BUY BUY HOLD U/R STRONG BUY U/R
HOLD
* All price in local currency as of 3 June 2012 Source: Bloomberg & Global Research
June - 2012
5
June – 2012 Dividend Yield
15.0%
0.0%
9.0% 5.0%
6.0%
3.0% 0.0%
-5.0% Yanbu National Petrochemicals Co
Al Rayan Bank
Etihad Etisalat Co
Qassim Cement Co
12.0%
Abu Dhabi National Energy
10.0% Al Rajhi Bank
Top 10 Gainers in 1 month
Kuwait Finance House
Emirates Telecommunications Corp
10.0%
Yamama Saudi Cement Co
25.0%
Oman Telecommunications Co
35.0%
Saudi Cement Co
40.0%
Vodafone Qatar
Return on Assets (ROA)
Industries Qatar
Drake & Scull International
Union National Bank
Aldar Properties
Emaar Properties
Air Arabia
Emirates NBD
Ras Al Khaimah Cement Co
Attractive P/E x
Bahrain Telecommunications Co
50.0% Ras Al Khaimah Ceramics Co
1.0
Qatar Electricity & Water Co
5.0
Yanbu Cement Co
0.6
Sorouh Real Estate
6.0
Jazeera Airways Co
Dana Gas
Yanbu National Petrochemicals Co
Bank Muscat
Emirates NBD
First Gulf Bank
Jazeera Airways Co
Sorouh Real Estate
Ras Al Khaimah Ceramics Co
Dana Gas
Union National Bank
Abu Dhabi National Energy
0.7
7.0
Salhia Real Estate
0.0% Saudi Arabian Fertilizers Co
Yanbu National Petrochemicals Co
Etihad Etisalat Co
Yanbu Cement Co
Oman Telecommunications Co
Qatar National Cement Co
Saudi Cement Co
Industries Qatar
Qassim Cement Co
Yamama Saudi Cement Co
Saudi Arabian Fertilizers Co
8.0
Raysut Cement Co
First Gulf Bank
Bahrain Telecommunications Co
Yamama Saudi Cement Co
Mobile Telecommunications Co
Saudi Arabian Fertilizers Co
Oman Cement Co
Doha Bank
Commercial Bank of Qatar
Abu Dhabi National Energy
Air Arabia
Global Research – GCC GCC Equity Monitor
Charts
Attractive P/BV x
0.5
4.0 0.4
3.0 0.3
2.0
0.2
0.1 -
Return on Equity (ROE)
45.0% 60.0%
50.0%
30.0% 40.0%
20.0%
30.0%
15.0% 20.0%
5.0% 10.0%
0.0%
Source: Glob al Research, Bloomb erg
6
Global Research – GCC
GCC Equity Monitor
Technical Overview: Kuwait Stock Exchange Kuwait Stock Exchange Price Index closed at 6,193.82 point. The market remains underpinned by its strong support line at around 6,100 point, knowing that the index should hold a close above there for a near-term upside rebound to be preserved, but a sudden dip below there would trigger the psychological level at 6,000 point and even more towards 5,900 point. On the bullish side, nearby resistance levels are located at 6,300 point and 6,400 point but only a cross over 6,537 point would alleviate the selling pressure and call for another leg up towards 6,770 point. The weekly and daily “RSI” indicators are currently looking negative. Strategy: Medium-term (11 weeks) investors can re-enter the market at levels higher than 6,300 point, while long-term investors who would like to stay should watch out if the index dips below 6,165 point. Index Name Sector Reuters’ RIC
Kuwait Stock Exchange Price Index Index
Last Trade (point) MACD* RSI** Moving Average (11 weeks) Moving Average (50 weeks) Support (1) ^ Support (2) ^ Resistance(1) ^^ Resistance(2) ^^ Trend Status
6,193.82 89.49 52.086
May 31, 2012
6,300 6,165 6,000 5,900 6,537 6,770 Neutral
Name of Index
Reuter' RIC
Close
Support
Weekly RSI 1
Kuwait Stock Exchange Price Index
Resistance 2
1
2
Strategy Medium
Long
Neutral
Moving Average 11
50
6,193.82
52.086
6,000
5,900
6,537
6,770
Neutral
6,300
6,165
6,975.27
42.675
6,500
6,200
7,200
7,640 Bearish Neutral
7,150
6,800
QE Index
8,416.83
38.465
8,260
8,000
8,500
9,000
Neutral
8,550
8,550
Abu Dhabi Price Index
2,441.03
40.550
2,350
2,292
2,475
2,535 Bearish Bearish
2,475
2,535
1,471.49
40.105
1,400
1,350
1,500
1,590 Bearish Bearish
1,540
1,540
MSM 30 Index
5,754.69
47.750
5,560
5,500
5,840
6,085
Neutral
Neutral
5,760
5,820
Bahrain All Share Index
1,139.58
38.800
1,126
1,100
1,165
1,200
Neutral Bearish
1,150
1,200
Saudi All Share Index
Dubai Financial Market Index
Neutral
Definitions: * A trend-following momentum indicator that shows the relationship between two moving averages of prices. When the MACD is above zero, the short-term average is above the long-term average, which signals upward momentum. The opposite is true. ** A technical momentum indicator that compares the magnitude of recent gains to recent losses in an attempt to determine overbought and oversold conditions of an asset. An asset is deemed to be overbought once the RSI approaches the 70 level, meaning that it may be getting overvalued and is a good candidate for a pullback. Likewise, if the RSI approaches 30, it is an indication that the asset may be getting oversold and therefore likely to become undervalued. × Moving average. Which is an arithmetic way and a tool used purpose of easing the price fluctuations to clarify the trend and differentiate between primary or secondary trend of prices and the normal fluctuations. ^ The price level which, historically, a stock has had difficulty falling below. It is thought of as the level at which a lot of buyers tend to enter the stock. ^^ The price at which a stock or market can trade, but can not exceed, for a certain period of time. The stock or market stops rising because sellers start to outnumber buyers. Disclaimer: This Technical Analysis is not an invitation to buy or sell, as it is “Global’s” opinion and speculation of future movement of the stock. Also it is not considered a sufficient material to rely on when taking financial and investment decisions. Investors should study the financial statement before taking any investment decision.
June – 2012
7
Global Research – GCC
GCC Equity Monitor
Disclosure The following is a comprehensive list of disclosures which may or may not apply to all our researches. Only the relevant disclosures which apply to this particular research has been mentioned in the table below under the heading of disclosure. Disclosure Checklist Company Abu Dhabi Commercial Bank Abu Dhabi National Energy Air Arabia Aldar Properties Al Rajhi Bank Al Rayan Bank Al Khodari Sons Company Arab National Bank Arabian Cement Co. Arabtec Holding PJSC Aramex Bahrain Telecommunications Company Bank Muscat Banque Saudi Fransi Burgan Bank Commercial Bank of Kuwait Dana Gas Dar Alarkan Doha Bank Drake & Scull International Dubai Financial Market Emaar Economic City Emaar Properties Emirates NBD Emirates Telecommunications Corporation Etihad Etisalat Company First Gulf Bank Industries Qatar Jazeera Airways Company Kuwait Finance House Mabanee Mobile Telecommunications Company Mohammad Al-Mojil Group National Bank of Abu Dhabi National Bank of Kuwait National Mobile Telecommunications Company Oman Cement Company Oman Telecommunications Company Qassim Cement Co Qatar Electricity & Water Company Qatar Islamic Bank Qatar National Bank Qatar National Cement Company Qatar Telecom
June – 2012
Recommendation STRONG BUY STRONG BUY STRONG BUY STRONG BUY U/R HOLD STRONG BUY STRONG BUY BUY SELL BUY HOLD U/R U/R U/R HOLD U/R SELL BUY STRONG BUY HOLD SELL STRONG BUY STRONG BUY STRONG BUY BUY STRONG BUY STRONG BUY STRONG BUY U/R HOLD STRONG BUY U/R BUY HOLD STRONG BUY HOLD HOLD HOLD STRONG BUY HOLD BUY BUY STRONG BUY
Bloomberg Ticker
Reuters Ticker
Price
Disclosure
ADCB UH TAQA UH AIRARABI UH ALDAR UH RJHI AB MARK QD ALKHODAR AB ARNB AB ARCCO AB ARTC UH ARMX UH BATELCO BI BKMB OM BSFR AB BURG KK CBK KK DANA UH ALARKAN AB DHBK QD DSI UH DFM UH EMAAR AB EMAAR UH EMIRATES UH ETISALAT UH EEC AB FGB UH IQCD QD JAZEERA KK KFIN KK MABANEE KK ZAIN KK MMG AB NBAD UH NBK KK NMTC KK OCOI OM OTEL OM QACCO AB QEWS QD QIBK QD QNBK QD QNCD QD QTEL QD
ADCB.AD TAQA.AD AIRA.DU ALDR.AD 1120.SE MARK.QA 1330.SE 1080.SE 3010.SE ARTC.DU ARMX.DU BTEL.BH BMAO.OM 1050.SE BURG.KW CBKK.KW DANA.AD 4300.SE DOBK.QA DSI.DU DFM.DU 4220.SE EMAR.DU ENBD.DU ETEL.AD 7020.SE FGB.AD IQCD.QA JAZK.KW KFIN.KW MABK.KW ZAIN.KW 1310.SE NBAD.AD NBKK.KW NMTC.KW OCCO.OM OTL.OM 3040.SE QEWC.QA QISB.QA QNBK.QA QANC.QA QTEL.QA
AED 2.91 AED 1.17 SAR 0.56 AED 1.01 SAR 71 QAR 26.65 SAR 33.9 SAR 26.7 SAR 56 AED 2.82 AED 1.79 BHD 0.472 OMR 0.552 SAR 33.8 KWD 0.415 KWD 0.75 AED 0.39 SAR 10 QAR 55.7 AED 0.741 AED 0.913 SAR 9.7 AED 2.79 AED 2.7 AED 8.77 SAR 64 AED 8.53 QAR 133.8 KWD 0.41 KWD 0.74 KWD 0.94 KWD 0.69 SAR 13.6 AED 8.52 KWD 1.04 KWD 2 OMR 0.678 OMR 1.324 SAR 78.5 QAR 139 QAR 77.2 QAR 132.6 QAR 104.6 QAR 112.1
1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10
8
Global Research – GCC
GCC Equity Monitor
Disclosure Checklist Company Ras Al Khaimah Cement Company Ras Al Khaimah Ceramics Co. Raysut Cement Company Riyad Bank Samba Financial Group Salhia Real Estate Saudi Arabia Fertilizers Company Saudi Basic Industries Corporation Saudi Cement Company Saudi Electricity Company Saudi Hollandi Bank Saudi International Petrochemichal Company Saudi Real Estate Co Saudi Telecom Company Sorouh Real Estate Commercial Bank of Qatar The Saudi British Bank Union National Bank Vodafone Qatar Yamama Saudi Cement Company Yanbu Cement Co Yanbu National Petrochemicals Company
Recommendation
Bloomberg Ticker
U/R U/R U/R BUY BUY HOLD STRONG BUY STRONG BUY HOLD HOLD U/R STRONG BUY BUY BUY BUY STRONG BUY HOLD STRONG BUY SELL BUY SELL STRONG BUY
RAKCC UH RAKCEC UH RCCI OM RIBL AB SAMBA AB SRE KK SAFCO AB SABIC AB SACCO AB SECO AB AAAL AB SIPCHEM AB SRECO AB STC AB SOROUH UH CBQK QD SABB AB UNB UH VFQS QD YACCO AB YNCCO AB YANSAB AB
Reuters Ticker
Price
Disclosure
RAKC.AD AED 0.71 RKCE.AD AED 1.33 RAYC.OM OMR 1.305 1010.SE SAR 22.7 1090.SE SAR 44.9 SREK.KW KWD 0.26 2020.SE SAR 170.75 2010.SE SAR 90.75 3030.SE SAR 89.25 5110.SE SAR 12.95 1040.SE SAR 26.4 2310.SE SAR 18.8 4020.SE SAR 25.7 4110.SE SAR 40 SOR.AD AED 0.95 COMB.QA QAR 69.3 1060.SE SAR 33.9 UNB.AD AED 2.84 VFQS.QA QAR 9.03 3020.SE SAR 47.8 3060.SE SAR 77 2290.SE SAR 43.7
1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10
1. Global Investment House did not receive and will not receive any compensation from the company or anyone else for the preparation of this report. 2. The company being researched holds more than 5% stake in Global Investment House. 3. Global Investment House makes a market in securities issued by this company. 4. Global Investment House acts as a corporate broker or sponsor to this company. 5. The author of or an individual who assisted in the preparation of this report (or a member of his/her household) has a direct ownership position in securities issued by this company. 6. An employee of Global Investment House serves on the board of directors of this company. 7. Within the past year , Global Investment House has managed or co-managed a public offering for this company, for which it received fees. 8. Global Investment House has received compensation from this company for the provision of investment banking or financial advisory services within the past year. 9. Global Investment House expects to receive or intends to seek compensation for investment banking services from this company in the next three months. 10. Please see special footnote below for other relevant disclosures. Global Research: Equity Ratings Definitions Global Rating STRONG BUY BUY HOLD SELL U/R
June – 2012
Definition Fair value of the stock is Fair value of the stock is Fair value of the stock is Fair value of the stock is Fair value of the stock is
>20% from the current market price between +10% and +20% from the current market price between +10% and -10% from the current market price < -10% from the current market price Under Review
9
Global Research – GCC
GCC Equity Monitor
Disclaimer This material was produced by Global Investment House KSCC (‘Global’),a firm regulated by the Central Bank of Kuwait. This document is not to be used or considered as an offer to sell or a solicitation of an offer to buy any securities. Global may, from time to time to the extent permitted by law, participate or invest in other financing transactions with the issuers of the securities (‘securities’), perform services for or solicit business from such issuer, and/or have a position or effect transactions in the securities or options thereof. Global may, to the extent permitted by applicable Kuwaiti law or other applicable laws or regulations, effect transactions in the securities before this material is published to recipients. Information and opinions contained herein have been compiled or arrived by Global from sources believed to be reliable, but Global has not independently verified the contents of this document. Accordingly, no representation or warranty, express or implied, is made as to and no reliance should be placed on the fairness, accuracy, completeness or correctness of the information and opinions contained in this document. Global accepts no liability for any loss arising from the use of this document or its contents or otherwise arising in connection therewith. This document is not to be relied upon or used in substitution for the exercise of independent judgment. Global shall have no responsibility or liability whatsoever in respect of any inaccuracy in or omission from this or any other document prepared by Global for, or sent by Global to any person and any such person shall be responsible for conducting his own investigation and analysis of the information contained or referred to in this document and of evaluating the merits and risks involved in the securities forming the subject matter of this or other such document. Opinions and estimates constitute our judgment and are subject to change without prior notice. Past performance is not indicative of future results. This document does not constitute an offer or invitation to subscribe for or purchase any securities, and neither this document nor anything contained herein shall form the basis of any contract or commitment whatsoever. It is being furnished to you solely for your information and may not be reproduced or redistributed to any other person. Neither this report nor any copy hereof may be distributed in any jurisdiction outside Kuwait where its distribution may be restricted by law. Persons who receive this report should make themselves aware of and adhere to any such restrictions. By accepting this report you agree to be bound by the foregoing limitations.
June – 2012
10
Global Research – GCC
GCC Equity Monitor
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June – 2012
11
