GCC Markets Performance February 2013 · 2013. 3. 4. · Global Research – GCC MarketsGCC 2 Combined market capitalization rises 0.1%MoM The combined market capitalization of all

Global Research

GCC Markets Performance

Markets - GCC

March 2013

GCC Markets Performance – February 2013

GCC markets end mixed in February; TASI consolidates below 7,000

Abu Dhabi leads the pack with MoM gain of 5.7%, followed by Kuwait

Trading activity retreats on MoM basis

IPO activity remains subdued

GCC markets end mixed with a positive bias Global equity markets reported mixed performance in February 2013 as investors were cautious, though the year commenced on a positive note. The momentum sustained in January quickly receded as investors adopted a ‘wait-and-watch’ approach towards the potential implication of Sequestration (spending reduction plan worth USD85bn initiated by the Fed) and growth concerns in China and Eurozone. Uncertainty over the Fed Reserve’s commitment toward the quantitative easing program did little to cheer investors in February. Meanwhile, Eurozone’s Purchasing Managers' Index (PMI) fell during the month, reversing the uptrend witnessed in the previous two months. The Dow Jones Industrial Average gained 1.4% in February, while FTSE100 expanded 1.3%. In terms of GCC markets, major indices reported small gains.

Market Performance in February 2013

Indices % Chg (MoM) % Chg (YTD)

KSE Price Index 3.5% 8.9%

Tadawul All Share Index -0.6% 2.9%

DFM Index 2.1% 18.8%

ADX Index 5.7% 15.7%

Bahrain All Share 0.4% 2.3%

QE Index -2.2% 2.0%

MSM30 Index 3.0% 3.7%

Source: Zawya, Bloomberg, Reuters & Global Research

The Tadawul All Share Index (TASI) declined 0.6% in February and consolidated below 7,000 as investors were awaiting another set of triggers following the announcement of good corporate results and an expansionary budget. Abu Dhabi’s ADX index was the best performer with a gain of 5.7%. ADX’s superior performance was ascribed to strong earnings announcements and generous dividend payouts in the banking sector. The Kuwait Price index rose 3.5% to become the second best performer among GCC markets in February. The DFM, which was the best performer in January 2012, posted a gain of 2.1%. The Qatari market underperformed other GCC bourses, declining 2.3% after increasing 4.4% the previous month.

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Global Research

[email protected] Phone: +965 2295 1270

Global Investment House www.globalinv.net

Global Research – GCC GCC Markets

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Combined market capitalization rises 0.1%MoM The combined market capitalization of all GCC bourses grew 0.1%MoM to USD767.8bn in February 2013—performance was mixed with four markets gaining while three markets declining during the month. Saudi Arabia, the largest GCC market, lost USD2.3bn from its capitalization in February 2013 compared with January 2013. The TASI’s market capitalization of USD381.6bn was equivalent to 49.7% of the total GCC capitalization. Qatar, the second largest GCC market based on capitalization, lost USD2.5bn from its capitalization in February, constituting 16.7% of the total GCC capitalization. On the other hand, UAE (Abu Dhabi & Dubai) markets added USD5.7bn to their capitalization in February 2013.

GCC Aggregate Market Capitalization

Country Market Cap (USDbn)

February 2013 Market Cap (USDbn)

January 2013 % Chg (MoM)

% of total February 2013

Kuwait 102.6 103.6 -1.0% 13.4%

Saudi Arabia 381.6 383.9 -0.6% 49.7%

Abu Dhabi 79.6 75.4 5.6% 10.4%

Dubai 40.6 39.1 3.7% 5.3%

Qatar 128.1 130.6 -1.9% 16.7%

Oman 18.9 18.4 2.7% 2.5%

Bahrain 16.5 16.4 0.6% 2.1%

Total GCC 767.8 767.4 0.1% 100.0%

Source: Respective stock exchanges, Zawya & Global Research

GCC trading activity declines in February The overall trading activity in GCC countries declined on MoM basis in February 2013. Barring Qatar and Oman, all GCC markets recorded a fall in the value traded. The Saudi market witnessed a decline of 7.8%MoM to USD31.5bn during the month, while the UAE markets saw a fall of 9.2%MoM to USD3.3bn. Saudi Arabia accounted for 84.5% of the total value traded during the month, while the UAE markets contributed 8.8% to the total value traded. The overall volumes declined 2.8%MoM to 24.1bn shares primarily due to a 14.6%MoM decline in volumes in the UAE markets.

GCC Aggregate Trading Activity

Country February 2013 January 2013

Value traded

(USDbn) Volumes (mn)

As a % of total value traded

Value traded (USDbn)

Volumes (mn) As a % of total

value traded

Bahrain 0.04 74.4 0.1% 0.04 149.9 0.1%

Kuwait 0.7 9,428.5 1.8% 0.7 8,656.0 1.8%

Oman 0.4 518.6 1.0% 0.2 353.9 0.6%

Qatar 1.4 124.7 3.8% 1.3 90.7 3.2%

Saudi Arabia 31.5 4,660.3 84.5% 34.2 4,655.6 85.4%

UAE 3.3 9,290.1 8.8% 3.6 10,890.6 9.0%

GCC Total 37.3 24,096.6 100.0% 40.0 24,796.8 100.0%

Source: Respective stock exchanges, Reuters, Zawya & Global Research

IPO activity remained muted Saudi Arabia was the only market to witness IPO activity in February. National Medical Care Co. launched its IPO, offering 13.5mn shares at SAR27.0 each.


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GCC market valuation remains fairly attractive GCC equity markets had a good start to 2013 largely due to an uptick in earnings across key cyclical sectors such as Banking and Real Estate. Despite the recent surge, GCC markets continue to remain fairly attractive. In terms of one-year forward PE, the six GCC markets trade in the range of 9.4x–11.3x. This is fairly below the three- and five-year historic average of 13.5x and 13.4x, respectively, for the region as a whole. Valuation is also lower compared to similar frontier markets and key emerging markets. Within GCC, we are in favor of Saudi Arabia given its current compelling valuations coupled with a robust earnings outlook for 2013.

GCC Market Valuation – EPS Growth versus Price to Earnings

Source: Bloomberg & Global Research

Development on the global macroeconomic front to be a key factor in the short term We remain optimistic on the outlook for the GCC equity market in 2013, largely due to the presence of region-specific triggers such as continued momentum on reforms, healthy economic growth, investment in non-oil sectors, stabilization in oil prices and recovery in the real estate sector. However, the market remains exposed to volatility that could potentially emanate from lack of institutional participation. In the short-term, developments on the global macroeconomic front would play a key role in deciding the course of GCC markets due to lack of region-specific triggers in the post-earnings season. Continued buoyancy in oil prices coupled with positive surprises in the domestic macroeconomic scenario may bolster the region’s markets.

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Bahrain

BSE sustains rally in February BSE continued with the positive momentum that commenced toward the end of December 2012 and increased 0.4%MoM in February 2013. The index advanced 1.8%MoM in January 2013 and 1.6%MoM in December 2012. The Banking sector continued to provide strong support. Al Ahli United Bank (AUB), the Kingdom’s largest company (by market capitalization), posted strong 4Q12 results. Also, the bank divested its 29.4% stake in Ahli Bank Qatar at a net profit of USD212.9mn during the month. In addition, BSE was supported by positive momentum in the Insurance index. However, a decline in Services and Investment indices restricted growth. During the month, gainers outnumbered decliners at 12 and 10, respectively. Nass Corporation topped the gainers, rising 12.1% to close at 167 fils. United Gulf Investment Corporation led the losers, falling 30.0% to end at 105 fils.

BSE Index and Volume Performance and Sectoral Performance

Source: Zawya, Gulfbase & Global Research

Sectoral Performance Commercial Banking index continued to be the best performer with a yield of 3.1%, followed by Insurance with a yield of 0.3% during the month. Growth in the former was primarily led by the 7.5% rise in AUB’s share price. The bank reported strong 4Q12 numbers—net profit increased 11.8%YoY that, in turn, supported the stock’s rally. Moreover, AUB announced the sale of its 29.4% stake in Ahli Bank Qatar to Qatar Foundation at a profit of USD212.9mn. Investment and Services indices were the worst performers, contracting 3.1% and 0.3%, respectively.

The Banking index was further supported by BBK (+2.5%) and National Bank of Bahrain (+0.8%), while Bahrain Islamic Bank (-6.1%) and Al Salam Bank (-7.1%) restricted the growth in yields.

The Insurance index witnessed 0.3% growth in yields supported by strong movements in Arab Insurance Group (ARIG), which yielded 5.9% in February. The company reported a net profit of USD15.3mn in 2012 as against a loss of USD19.1mn in 2011. ARIG’s performance was supported by favorable claims and higher profitability in Life book as well as lower operating costs. However, the index’s growth was restricted due to a 2.5% decline in the share price of Bahrain National Holding Co.

The Services index declined 0.3% as a 11.4% (2.6% on an adjusted basis for bonus) decline in Bahrain Telecommunication Co (BATELCO) more than offset rise in NASS Corporation (+13.6%), Bahrain Duty Free Shop Complex Co. (+11.5%), Bahrain Cinema Co. (+10%) and SEEF Properties (+7.09%); BATELCO reached its 52-week low (372 fils) during the month. Nevertheless, BATELCO launched the 4G LTE service in February. Bahrain Duty Free Complex Co. and Bahrain Cinema Co. announced a 17.4% and 62% increase in net profit, respectively, for 2012.

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The Investment index further declined by 3.2% during the month, primarily driven by Khaleeji Commercial Bank (-11.9%) United Gulf Bank (-10.3%), Arab Banking Corporation (-5.4%), Al Baraka Banking Group (-4.6%) and Ithmaar Bank (-2.9%). However, growth in Gulf Finance House (+8.0%), Bahrain Middle East Bank (+7.7%), Inovest (+7.1%) and Bahrain Commercial Facilities Company (+7.1%) partly offset the fall. Al Baraka Banking Group reported 11%YoY increase in net profit for 2012 due to business expansion, an improvement in asset quality and an increase in productivity. On the other hand, Arab Banking Corporation reported flat net profit of USD205mn, primarily on higher impairment provisions.

Trading activity declines in February 2013 Total volume traded on the Bahraini bourse decreased 50.4% to 74.4mn shares. AUB accounted for 23.4% of the overall traded volume. Also, it was the most actively traded stock in terms of turnover (USD11.1mn). Al Salam Bank was the most actively traded stock in terms of volume, which totaled 33.4mn, or 44.9%, of the overall traded volume in February.

BSE Trading Statistics – Top 5

Top 5 Gainers

Company Close* % Chg MTD

52-wk High*

52-wk Low*

P/E P/B Value

Traded (USDmn)

MCAP (USDbn)

Nass Corporation 167.0 12.1% 167.0 126.0 NA 0.7 0.7 0.1

Gulf Finance House** 0.14 8.0% 0.25 0.12 18.5 0.7 0.1 1.4

Bahrain Middle East Bank** 0.06 7.7% 0.08 0.04 8.1 0.5 0.0 0.0

Ahli United Bank ** 0.65 7.5% 0.66 0.52 NA 1.3 11.1 3.4

Bahrain Commercial Facilities Co. 600.0 7.1% 600.0 390.0 7.9 1.2 0.2 0.3

Top Losers


52-wk High*

52-wk Low*

P/E P/B Value

Traded (USDmn)

MCAP (USDbn)

United Gulf Investment Corporation 105.0 -30.0% 161.0 105.0 7.6 0.6 0.0 0.1

Khaleeji Commercial Bank 37.0 -11.9% 47.0 32.0 52.9 0.4 0.2 0.1

United Gulf Bank 210.0 -10.3% 304.0 210.0 41.2 0.3 0.0 0.5

Al Salam Bank Bahrain 78.0 -7.1% 89.0 39.0 NA 0.6 7.4 0.3

Bahrain Islamic Bank 77.0 -6.1% 0.1 0.1 NA 0.8 0.0 0.2

Top 5 Volume Traded


52 wk High*

52 wk Low*

P/E P/B Volume Traded

(mn)

MCAP (USDbn)


Ahli United Bank** 0.65 7.5% 0.66 0.52 NA 1.3 17.4 3.4

Esterad Investment Co. 188.0 0.0% 188.0 129.0 NA 0.7 6.6 0.1

National Bank of Bahrain 610.0 0.8% 615.0 500.0 NA 1.8 3.8 1.4

Khaleej Commercial Bank 37.0 -11.9% 47.0 32.0 52.9 0.4 1.9 0.1


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Top 5 Value Traded


52 wk High*

52 wk Low*

P/E P/B Value

Traded (USDmn)

MCAP (USDbn)

Ahli United Bank** 0.65 7.5% 0.66 0.52 NA 1.3 11.1 3.4


National Bank of Bahrain 610.0 0.8% 615.0 500.0 NA 1.8 5.8 1.4

Bahrain Duty Free Shop Complex. 870.0 4.8% 900.0 627.3 13.3 2.3 3.3 0.2

Esterad Investment Co. 188.0 0.0% 188.0 129.0 NA 0.7 3.2 0.1

Source: Reuters, Gulfbase & Global Research * price data for stocks is in fils, **price data in USD

Market capitalization At the end of February, market capitalization of listed companies on the BSE aggregated USD16.5bn (BHD6.2bn) compared to USD16.4bn (BHD6.17bn) at the end of January. This was mainly driven by NASS Corporation, which added 12.1%MoM, Global Finance House (+8.0%), Bahrain Middle East Bank (+7.7%) and AUB (+7.5%). The market capitalization of the top 10 listed companies increased 0.5%MoM to USD12.2bn (BHD4.6bn) in February.

Top 10 Listed Companies by Market Capitalization (in BHDmn)

Company Feb-2013 Jan-2013 Feb-2012 MoM% YoY%

Ahli United Bank BSC 1,272.6 1,183.8 1,277.7 7.5% -0.4%

Aluminium Bahrain BSC 622.0 622.0 837.8 0.0% -25.8%

Bahrain Telecommunications Co BSC 589.2 604.8 561.6 -2.6% 4.9%

National Bank of Bahrain BSC 521.8 517.5 491.8 0.8% 6.1%

Arab Banking Corporation BSC 418.3 442.2 492.4 -5.4% -15.1%

BBK BSC 349.1 340.6 350.8 2.5% -0.5%

Al Baraka Banking Group BSC 279.2 292.6 347.5 -4.6% -19.7%

Investcorp Bank BSC 201.8 201.8 240.3 0.0% -16.1%

Ithmaar Bank BSC 174.4 179.7 95.1 -2.9% 83.3%

United Gulf Bank BSC 175.3 195.3 253.7 -10.3% -30.9%

Total Market Capitalization (Top 10 stocks) 4,603.5 4,580.2 4,948.7 0.5% -7.0%

Source: Reuters & Global Research


7

Kuwait

Improved outlook for spending and corporate earnings lift KSE The Kuwait Price Index advanced 3.5%MoM in February. The market commenced on a positive note and reached an eight-month high during the initial days as expectations of higher public spending boosted investor sentiment. The government is expected to earmark USD107bn (KWD30bn) for mega infrastructure and industrial projects under a four-year plan (ending 2014). Though only a few projects have been executed so far, the anticipated acceleration in government spending is setting a bullish tone. As a testimony to this fact, Kuwait plans to announce the winner of the contract to develop the USD3.2bn (KWD900mn) airport during 1Q13. The rally was mainly driven by small cap stocks. In addition, positive earnings expectations contributed to the upside.

KSE Index and Volume Performance and Sectoral Performance

Source: Kuwait Stock Exchange, Gulfbase & Global Research

Sectoral Performance Technology index was the best performer, advancing 17.9% during the month. The upside was driven by Future Communications Co. (+44.6%), Automated Systems Co. (+25.8%), Hayat Communications Co. (+4.9%) and Al-Safat Tec Holding Company (+1.5%). Future Communications Co. posted 54.0% drop in net earnings for 2012; however, the company announced a cash dividend of 12.5% to attract investors. Healthcare index rose 10.1% in February driven by Al-Mowasat Healthcare Co. (+24.4%) and Yiaco Medical Co. (+4.9%). Oil and gas index increased 9.5% led by Ikarus Petroleum Industries Co. (+12.2%), which reported 6%YoY increase in net profit to KWD9.0mn and cash dividend of 12% in 2012. Among other major peers, Gulf Petroleum Investment Co, Aref Energy Holding and National Petroleum Services Co. grew 33.3%, 28.7% and 17.7%, respectively. Banking Index fell 1.0% during the month due to Kuwait Finance House (down 2.4%), Commercial Bank of Kuwait (-5.6%), Burgan Bank (-3.5%) and Kuwait International Bank (-6.4%). Kuwait Finance House’s net profit surged 24%YoY in 4Q12 due to restructuring initiatives. However, the company failed to surpass market expectations. Financial Services index advanced 4.8% led by Credit Rating and Collection Co. (+54.7%), Securities House Co. (+40.0%), Gulf Investment House Co. (+23.6%), Kuwait Projects Co. (+2.5%), Privatization Holding Co. (+2.3%) and Commercial Facilities Co. (+1.5%).

Trading activity remains mixed Total volume traded on the KSE grew 8.9%MoM to 9.4bn in February 2013. However, total traded turnover decreased 5.3%MoM to KWD0.7bn.

The Real Estate index accounted for 39.9% of the traded volume and 24.2% of the total turnover in February. The index’s total traded volume surged 43.1%MoM to 3.8bn, while total traded value rose 4.7%MoM to KWD0.2bn. Financial Services index constituted 35.0% of the total traded volume and 30.6% of the total turnover. However, the index’s total traded volume declined 12.5%MoM to 3.3bn, while total traded value fell 5.2%MoM to KWD0.2bn. The

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Parallel Market

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Industrials index comprised 12.8% and 13.9% of the total traded volume and turnover, respectively. Total volume and value traded on the Industrials index grew 25.4%MoM and 8.6%MoM, respectively. The Banking index accounted for 5.0% of total volumes and 7.5% of total turnover. Traded volumes increased 11.1%MoM and turnover rose 55.1%MoM. Technology index witnessed the maximum growth of 158.0% and 197.1% in volumes and turnover, respectively.

KSE Trading Statistics

Top 5 Gainers


52-wk High*

52-wk Low*

P/E P/B Value

Traded (USDmn)

MCAP (USDbn)

Credit Rating and Collection KSCC 58.0 54.7% 110.0 28.5 NA 0.6 0.2 0.0

Future Communications Co Global 162.0 44.6% 290.0 86.0 20.2 0.9 9.5 0.0

The Securities House KSCC 84.0 40.0% 100.0 43.5 NA 1.0 63.7 0.2

Equipment Holding Co KSCC 250.0 38.9% 260.0 63.0 NA 2.2 63.5 0.1

Gulf Petroleum Investment Co 136.0 33.3% 152.0 36.0 25.8 1.3 124.2 0.1

Top 5 Losers


52-wk High*

52-wk Low*

P/E P/B Value

Traded (USDmn)

MCAP USDbn)

Gulf Cable and Electrical Inds Co 1,000.0 -21.9% 1,460.0 1,000.0 18.5 1.3 0.1 0.7

KIPCO Asset Management Co 116.0 -15.9% 285.0 96.0 NA 0.5 0.1 0.1

Contracting and Marine Svcs Co 170.0 -15.8% 202.0 114.0 13.4 0.8 0.1 0.1

Mena Real Estate Co KSCC 41.5 -7.8% 46.5 28.5 NA 0.5 0.9 0.0

Kuwait Foundry Co SAK Closed 300.0 -7.7% 380.0 260.0 40.1 0.9 0.9 0.2

Top 5 Volume Traded


52-wk High*

52-wk Low*


(mn)

MCAP (USDbn)

Investors Holding Group Co 19.0 -2.6% 27.0 12.5 NA 0.5 1,763.1 0.1

National Ranges Co KSCC 18.0 0.0% 26.0 14.5 NA 0.5 682.0 0.1

Abyaar Real Estate Development 45.5 8.3% 53.0 36.5 NA 0.5 555.7 0.2

Gulf Finance House BSC 37.0 7.2% 70.0 30.5 18.1 0.2 546.5 1.4

Gulf Investment House KSCC 55.0 23.6% 56.0 22.0 NA 1.1 469.4 0.1

Top 5 Value Traded


52-wk High*

52-wk Low*

P/E P/B Value

Traded (USDmn)

MCAP (USDbn)

Investors Holding Group Co KSCC 19.0 -2.6% 27.0 12.5 NA 0.5 137.3 0.1

Gulf Petroleum Investment Co 136.0 33.3% 152.0 36.0 25.8 1.3 124.2 0.1

Abyaar Real Estate Development 45.5 8.3% 53.0 36.5 NA 0.5 88.4 0.2

Gulf Investment House KSCC 55.0 23.6% 56.0 22.0 NA 1.1 82.4 0.1

National Bank of Kuwait SAK 1,000.0 2.0% 1,109.1 930.0 14.1 1.8 75.0 15.4

Source: Reuters, Gulfbase & Global Research *price data for stocks is in fils


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Market Capitalization At the end of February 2013, market capitalization on the KSE index decreased 1.0%MoM to USD102.6bn. This was mainly due to Mobile Telecommunications Co (down 3.6%), Kuwait Finance House (-2.3%), Burgan Bank (-3.4%) and Commercial Bank of Kuwait (-5.5%). Total market cap of the top 10 listed companies decreased 0.4%MoM to KWD17.2bn during the same period.

Top 10 Listed Companies by Market Capitalization (in KWDmn)


National Bank of Kuwait SAK 4,355.0 4,266.4 4,591.0 2.1% -5.1%

Mobile Telecommunications Co KSC 3,452.1 3,579.5 3,666.5 -3.6% -5.8%

Kuwait Finance House KSC 2,382.3 2,439.0 2,205.0 -2.3% 8.0%

National Mobile Telecommunications Co KSC 1,230.3 1,209.4 1,028.2 1.7% 19.7%

Boubyan Bank KSC 1,154.2 1,136.4 979.0 1.6% 17.9%

Gulf Bank KSC 1,079.9 1,079.3 1,216.2 0.1% -11.2%

Ahli United Bank BSC 955.5 880.8 941.0 8.5% 1.5%

Al Ahli Bank of Kuwait KSC 878.0 877.7 936.8 0.0% -6.3%

Burgan Bank SAK 865.5 895.9 669.5 -3.4% 29.3%

Commercial Bank of Kuwait SAK 865.3 915.7 903.1 -5.5% -4.2%

Total Market Capitalization (Top 10 stocks) 17,218.1 17,280.0 17,136.3 -0.4% 0.5%


IPO Market Overview Although there was no IPO in the local market, Zain Iraq announced plans to offer 25% of the shares in Iraq Stock Exchange during 1H13. Citigroup, National Bank of Kuwait and BNP Paribas would be arranging the IPO.


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Oman

MSM30 posts gain of 3.0% in February The MSM30 index grew 3.0%MoM in February. The index traded at a 10-month high of 5998.3 on February 21, 2013. Thereafter, it contracted due to profit-booking and closed at 5975.6 on February 28, 2013. Growth was supported by strong performance of the three sectoral indices. Of the 86 stocks trading on the exchange, 52 posted gains, 24 declined while the remaining 10 were unchanged during the month. MSM30 gathered momentum due to an improvement in investor sentiment on strong earnings releases and certain positive developments. The Capital Market Authority (CMA) announced it is actively seeking to lower the minimum capital requirement for companies listing on the stock exchange from the current OMR2mn. During the month, 37 companies announced financial results for 2012 and reported an aggregate increase of 150.6%YoY in full-year net profit.

MSM30 - Index and Volume Performance and Sectoral Performance

Source: Muscat Securities Market, Gulfbase & Global Research

Sectoral Performance The performance of sectoral indices was strong in February. Sector-wise, Industrial was the best performer, followed by Services & Insurance and Banking & Investment.

The Industrial sector grew 6.5% driven by higher share prices of Salalah Mills (25.8%), Dhofar Cattle Feed Co. (30.0%) and Al Anwar Holding Co. (25.9%). Salalah Holdings and Dofar Cattle Feed reported an increase of 48.7% and 19 fold in net profit, respectively, for 2012. Al Anwar Holding’s profits surged 112% to OMR1.04mn for 9M12 ending December 12, 2012. In our opinion, strong earnings growth led to an improvement in sentiment that, in turn, boosted share prices. Raysut Cement, the largest company in the sector by market capitalization, advanced 1.9% in February driven by strong results for 4Q12. The company’s net profit grew 65%YoY to OMR7.7mn for 4Q12 and 64.1%YoY to OMR24.5mn in 2012, primarily driven by an investment gain of OMR1.4mn and recovery in margins.

Services & Insurance Index surged 5.2% during the month, driven by the strong rise Sohar Power (57.0%) and A’Saffa Food Co. (29.2%). Growth in Sohar Power could be ascribed to the decision of implementing a 20.5% capital reduction (from OMR27.8mn to OMR22.1mn) on March 5, 2013. A’Saffa Food Co.’s net profit increased 89% to OMR7.3mn for 2012 prompting stock price to surge significantly during the month. Other companies that witnessed strong growth were, Dhofar Insurance Co. (+26.1%), Al Jazeira Services Co. (+23.2%) and United Power Co. (+15.7%). Oman Telecommunications, the largest listed services company in terms of market capitalization, advanced 0.7% to close at OMR1.44. The company’s profit declined 10% in 4Q12 on lower revenues from text messages and international calls. However, Nawras Telecom expanded 11.6% during the month. Renaissance Services’ share price decreased 4.8%, while that of Galfar Engineering and Contracting declined 3.0%.

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MSM30


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Banking & Investment index advanced 4.2% during the month. Growth was primarily driven by Transgulf Investment Holding Co. (12.8%), Oman Investment and Finance Co. (16.4%) and Taageer Finance (14.0%). Transgulf Investment Holding Co. agreed to merge with Al Madina Financial Co. and form a stronger combined entity to capitalize on investment opportunities within the Sultanate. In another development, Taageer Finance signed a Memorandum of Understanding (MoU) with Ahlibank under which the latter will explore the opportunity of fully acquiring the former at a purchase consideration of 176–177.5bz per share. Bank Muscat, the largest stock in Oman based on market capitalization, increased just 1.3% during the month as the stock slumped 4.3% on February 25, 2013. This was the largest one-day fall since July 2011 and occurred due to the bank’s revelation that it would incur an impairment charge of OMR15mn on compromising 12 prepaid travel cards outside Oman. In a positive development, the bank forecasted its loan book to grow 14–15% in 2013, driven by the government’s strong spending on job creation and infrastructure projects. Al Omaniya Financial Services and Bank Sohar advanced 11.1% each, during the month. Bank Sohar’s final subscription of a rights issue of 100mn shares was approved by CMA in February. Al Omaniya’s net profit grew 17%YoY to OMR5.65mn driven by the 32% increase in the loan book.

Strong growth in trading activity signals positive momentum In February, trading activity augmented significantly, with volumes increasing 46.5%MoM to 518.6mn shares from 353.9mn in January. Value traded rose 66.0% to OMR149.3mn vis-à-vis OMR89.9mn during the same period. ONIC Holding was the most traded stock with a total volume of 76.9mn shares, while Bank Muscat topped in terms of value traded with OMR25.2mn.

MSM30 Trading Statistics – Top 5

Top 5 Gainers


52 wk High*

52 wk Low*

P/E P/B Value

Traded (USDmn)

MCAP (USDbn)

Sohar Power Co SAOG 2,541.0 57.0% 2,598.0 1,301.0 29.6 13.4 1.2 0.2

Dhofar Cattle Feed Co SAOG 303.0 30.0% 320.0 125.0 63.1 2.0 4.6 0.1

A Saffa Foods SAOG 800.0 29.2% 825.0 430.0 18.8 5.0 1.9 0.2

Al Anwar Holdings SAOG 180.0 25.9% 183.0 102.0 20.5 1.2 14.0 0.1

Salalah Mills Co SAOG 1,298.0 25.8% 1,310.0 810.0 15.8 3.5 2.8 0.2

Top 5 Losers


52 wk High*

52 wk Low*

P/E P/B Value

Traded (USDmn)

MCAP (USDbn)

Financial Corporation Co 101.0 -18.6% 124.0 101.0 91.8 1.0 0.0 0.0

National Securities Co SAOG 55.0 -17.9% 85.0 55.0 NA 0.4 0.0 0.0

Majan Glass Co SAOG 448.0 -9.9% 517.4 448.0 20.8 1.3 0.0 0.0

Oman Textile Holding Co 284.0 -5.3% 425.0 280.0 NA 0.2 0.0 0.0

Renaissance Services SAOG 476.0 -4.8% 665.0 427.0 527.8 0.7 10.2 0.3

Top 5 Volume Traded


52 wk High*

52 wk Low*


(mn)

MCAP (USDbn)

Oman National Inv Corp Hldg 308.0 0.7% 324.0 204.0 12.8 1.1 76.9 0.1

Bank Sohar SAOG 191.0 11.1% 193.0 133.7 8.4 1.3 60.8 0.5

Bank Nizwa SAOG 111.0 -2.6% 119.0 99.0 NA NA 60.3 0.4

Gulf Inves Services Holding Co 106.0 1.9% 108.0 63.0 NA 1.0 56.8 0.0

Oman Investment and Fin Co 262.0 16.4% 279.0 160.0 11.6 1.8 44.9 0.1


12

Top 5 Value Traded


52 wk High*

52 wk Low*

P/E P/B Value

Traded (USDmn)

MCAP (USDbn)

Bank Muscat SAOG 623.0 1.3% 647.0 490.0 8.6 1.2 65.2 3.3

Oman National Inv Corp Hldg 308.0 0.7% 324.0 204.0 12.8 2.0 61.7 0.1

Oman Investment and Finance 262.0 16.4% 279.0 160.0 11.6 1.8 29.5 0.1

Bank Sohar SAOG 191.0 11.1% 193.0 133.7 8.4 1.4 28.6 0.5

Oman Telecommunications Co 1,437.0 0.4% 1,500.0 1,275.0 9.0 2.3 18.2 2.8

Source: Muscat Securities Market, Gulfbase, Reuters * Price data in Baizas

Market capitalization At the end of February, total market capitalization of listed companies on MSM30 totaled OMR7.3bn, up 2.8% from OMR7.1bn in January. Among heavyweights, Bank Muscat’s market capitalization increased OMR16.5mn during the month. Market cap for HSBC Bank Oman expanded 10.2%MoM to OMR36.1mn, while that for Omani Qatari Telecommunications Co. grew 11.8%MoM to OMR36.5mn. Market capitalization for the top 10 listed companies rose 2.3%MoM to OMR4.8bn.

Largest Ten Listed Companies In Market Capitalization (in OMRmn)


Bank Muscat SAOG 1,270.1 1,253.6 1,142.7 1.3% 11.1%

Oman Telecommunications Co SAOG 1,077.8 1,073.9 1,055.3 0.4% 2.1%

Bank Dhofar SAOG 418.1 408.1 493.3 2.4% -15.3%

HSBC Bank Oman SAOG 388.1 352.0 270.1 10.2% 43.7%

Omani Qatari Telecommunications Co SAOG 345.0 308.5 409.4 11.8% -15.7%

National Bank of Oman SAOG 321.3 326.9 345.9 -1.7% -7.1%

Raysut Cement Co SAOG 293.4 288.0 171.4 1.9% 71.2%

Shell Oman Marketing Co SAOG 219.8 223.7 217.6 -1.7% 1.1%

Ahli Bank SAOG 217.9 213.0 205.2 2.3% 6.2%

Oman Cement Co SAOG 215.1 211.7 167.1 1.6% 28.7%

Total Market Capitalization (Top 10 stocks) 4,766.6 4,659.6 4,477.9 2.3% 6.4%

Source: Reuters, Zawya & Global Research

Global Research - GCC GCC Markets

13

Qatar

Qatar Exchange ends in the red In February, the Qatar stock market ended at 8,528, down 2.2% from 8,724 at the end of January. The market commenced on a positive note, maintaining the momentum from January. Announcement of dividends by Masraf Al Rayan, Commercial Bank of Qatar and Al Ahli Bank led to an increase in the QE index earlier in the month. Expectations of strong 4Q earnings from Industries Qatar further bolstered the market until mid-February. The market was upbeat due to the significant line-up of IPOs. However, Industries Qatar missed the market estimate for 4Q earnings that triggered a slide in the index. Overall, the market witnessed strong selling pressure, with investors engaging in profit-booking toward the end of the month.

Qatar Index and Volume Performance and Sectoral Performance


Sectoral Performance In February, the market was impacted by sector heavyweight, Banking & Financial Services, which fell 1.0% and offset gains recorded in the Industrial (0.4%) and Consumer Goods (4.1%) sectors. This was ascribed to Commercial Bank of Qatar, Alijarah Holding and Dlala Brokerage & Investment, which shed 12.3%, 11.7% and 6.7%, respectively. Qatar National Bank and Qatar Islamic Bank also ended in the red, decreasing 0.7% and 3.3%, respectively. In the Industrial sector, Industries Qatar, Gulf International Services and Mannai Corporation led with gains of 0.5%, 3.4% and 7.1%, respectively. This helped offset the 6.7% drop in Qatar Electricity & Water. The Consumer Goods sector was led by Qatar Co. for Meat & Livestock (+8.2%), Al Meera Consumer Goods (+6.6%) and Qatar Fuel (+5.5%). However, the sector’s gains were restricted by the 11.2% loss in Qatar German Co. for Medical Services.

Trading activity rises during February Trading activity increased in terms of volume and turnover in February. Total traded volume aggregated 124.7mn shares, an increase of 37.4%, while turnover grew 12.5% to USD1.4bn (QAR5.2bn). The Banking sector contributed USD0.5bn (QAR1.8bn), or 34.7%, to the overall turnover. On the other hand, the Industrial sector accounted for 30.2% or USD0.4bn (QAR1.6bn). The Consumer Goods sector constituted USD0.1bn (QAR0.5bn), or 10.1%, of the total turnover.

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QE


14

QE Index - Trading Statistics – Top 5

Top 5 Gainers

Company Close % Chg MTD

52 wk High

52 wk Low

P/E P/B Value

Traded (USDmn)

MCAP (USDbn)

Mazaya Qatar Real Estate Dev. 11.9 9.2% 13.2 8.2 18.8 1.1 32.6 0.3

Qatar Co. for Meat & Livestock 63.3 8.2% 78.5 38.5 15.1 4.6 33.2 0.3

Ahli Bank QSC 58.3 7.8% 68.1 48.1 15.5 2.4 0.9 2.0

Mannai Corporation QSC 86.0 7.1% 98.9 72.8 9.7 2.7 1.3 1.1

Al Meera Consumer Goods Co 142.9 6.6% 165.0 112.5 17.6 6.4 40.3 0.8

Top 5 Losers


52 wk High

52 wk Low

P/E P/B Value

Traded (USDmn)

MCAP (USDbn)

Commercial Bank of Qatar 68.5 -12.3% 78.5 66.6 8.4 1.2 112.1 4.7

Alijarah Holding Co QSC 35.5 -11.7% 51.0 35.1 7.7 1.5 44.3 0.5

Qatari German Co. for Med Dev 12.7 -11.2% 16.5 8.0 NA 1.2 4.5 0.0

Ezdan Holding Group 16.4 -7.8% 24.0 15.0 51.9 1.4 1.5 12.0

Dlala Brokerage & Investment 32.0 -6.7% 57.8 20.0 24.5 1.9 3.1 0.2

Top 5 Volume Traded


52 wk High

52 wk Low


(mn)

MCAP (USDbn)

Qatar Gas Transport Co Ltd 16.6 4.5% 18.0 15.1 11.0 7.7 17.3 2.5

Gulf International Services QSC 33.2 3.4% 36.2 23.1 18.6 2.1 13.0 1.4

United Development Co PSC 17.3 0.0% 20.1 16.8 7.9 0.5 11.3 1.6

Mazaya Qatar Real Estate Dev 11.9 9.2% 13.2 8.2 18.8 1.1 9.9 0.3

Masraf Al Rayan QSC 24.1 -6.5% 28.0 24.0 12.1 2.0 9.0 5.0

Top 5 Value Traded


52 wk High

52 wk Low

P/E P/B Value

Traded (USDmn)

MCAP (USDbn)

Industries Qatar QSC 170.2 0.5% 176.0 124.9 11.0 3.3 256.7 25.7

Gulf International Services QSC 33.2 3.4% 36.2 23.1 18.6 2.1 121.4 1.4

Commercial Bank of Qatar 68.5 -12.3% 78.5 66.6 8.4 1.2 112.1 4.7

Doha Bank QSC 44.8 -12.3% 56.2 44.0 7.7 1.4 82.2 3.2

Qatar National Bank SAQ 129.5 -0.7% 141.7 128.2 10.9 2.0 78.9 24.9

Source: Gulfbase, Reuters & Global Research


15

Market capitalization At the end of February, total market capitalization on the QE index stood at USD128.0bn (QAR466.1bn), a decline of 1.9% from USD130.6bn (QAR475.4bn) in January. The fall was primarily aggravated by Ezdan Real Estate, which reported a decrease of USD1.0bn (QAR3.7bn), followed by Commercial Bank of Qatar and Masraf Al-Rayan that lost USD0.7bn (QAR2.4bn) and USD0.4bn (QAR1.3bn), respectively. However, the reduction in market capitalization was restricted by Qatar Telecommunication gaining USD0.3bn (QAR1.1bn), followed by Qatar Fuel and Industries Qatar reporting a gain of USD0.2bn (QAR0.8bn) and USD0.1bn (QAR0.5bn), respectively.

Largest Ten Listed Companies In Market Capitalization (in QARbn)


Industries Qatar QSC 93.6 93.1 77.6 0.5% 20.7%

Qatar National Bank SAQ 90.6 91.2 93.8 -0.7% -3.4%

Ezdan Holding Group 43.6 47.2 50.4 -7.8% -13.6%

Qatar Telecom QSC 37.0 0.1 28.7 3.1% 28.7%

Masraf Al Rayan QSC 18.1 19.4 20.0 -6.5% -9.7%

Commercial Bank of Qatar QSC 0.0 0.0 0.1 -12.3% -11.0%

Qatar Islamic Bank SAQ 16.9 0.1 18.3 -3.2% -7.7%

Qatar Fuel QSC 15.5 14.7 12.4 5.5% 25.1%

Doha Bank 11.6 11.7 13.5 -0.7% -14.4%

Qatar Electricity and Water Co QSC 13.3 14.2 14.7 -6.7% -9.6%

Total Market Capitalization (Top 10 stocks) 357.1 364.2 348.5 -2.0% 2.5%

Source: Reuters, Zawya & Global Research


16

Saudi Arabia

Saudi Arabia ends flat in February; TASI down 0.6% to 6,998 The Saudi market (TASI) ended almost flat in February, edging 0.6% lower in absence of any significant catalyst. However, on year-to-date basis, the index remained 2.9% higher. During February, the market lost the momentum it had gathered in January amid positive sentiment across global economies and strong corporate earnings in KSA. Nevertheless, the market witnessed some key events during the month, swinging between losses and gains. The listing of Northern Region Cement Co. on the TASI was the first major event of the month; the stock went on to become the most actively traded in terms of volume and turnover. Meanwhile, Kingdom Holding purchased stake in a Chinese online retailer, adding momentum mid-month. Furthermore, Mohammad al-Sheikh, a World Bank Executive Director, was appointed the new Head of the Capital Market Authority (CMA).

Overall, market participants seemed to remain cautious throughout the month. On one hand, the sentiment was positive on hopes of the market opening up to more foreign investors. On the flip side, the market remained concerned over KSA’s 2013 budget actually translating into higher corporate earnings during the year. The market is expected to maintain its status quo, unless significant events take place on the global front.

TASI - Index and Volume Performance and Sectoral Performance

Source: Zawya & Global Research

Sectoral Performance Sectoral performance remained muted throughout February. Agriculture & Foods Industries (up 0.8%) was the best performer, followed by Cement (0.5%) and sector heavyweight Banking (0.4%). Agriculture & Foods Industries was led by Saudi Airlines Catering Co. and Savola Group, which gained 3.1% and 2.9%, respectively, to offset the 1.5% loss by heavyweight Almarai Co. The Cement sector was primarily led by Arabian Cement, Yanbu Cement and The Southern Province Cement, which rose 12.2%, 4.3% and 3.5%, respectively. Meanwhile, Northern Region Cement also pitched in well rising 124.0% during the month over its opening price of SAR18.0. Industry heavyweight Banking was on an upward trajectory— SABB Riyad and Bank climbed 5.4% and 1.3%, respectively, offsetting losses by heavyweights Al Rajhi Bank and Samba Financial Group.

Among losers, the Media & Publishing sector sunk 8.1%, followed by Insurance (2.5%) and Petrochemical (2%). The Media & Publishing sector was dragged by Saudi Printing & Packaging, which lost 11.2%, while Insurance continued its poor performance with industry majors Amana Cooperative and Allied Cooperative down 20.2% and 17.0%, respectively. The Petrochemicals sector was dragged by industry heavyweight Saudi Basic Industries and Saudi Arabian Fertilizers, which fell 2.4% and 1.9%, respectively.

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Industrial Investment

Energy & Utilities

Retail

Transport

Banks & Financial Services

Cement

Agriculture & Food

TASI


17

Trading activity declines in February The TASI witnessed a decline in trading activity in February, reflecting the cautious mood of investors. The total volume traded during the month remained almost flat, edging up 0.1% to 4.66bn shares from 4.65bn shares the previous month. However, the total turnover for the month was down 7.8% to USD31.5bn (SAR118.3bn). The Cement sector saw the largest movement in total volume (33.3%) and turnover (21.1%) on the index, led by Northern Region Cement. Northern Region Cement remained the most actively traded stock in terms of both volume and turnover, with 901.0mn shares traded at an aggregate value of USD5.7bn (SAR21.5bn).

TASI Trading Statistics – Top 5

Top 5 Gainers


52 wk High

52 wk Low

P/E P/B Value

Traded (USDmn)

MCAP (USDbn)

Northern Region Cement Co 22.4 124.0% 68.0 17.8 18.3 2.1 5,740.9 1.1

Tourism Enterprises Co 70.5 43.6% 74.0 25.0 167.8 9.4 767.9 0.2

Al Alamiya for Coop. Insurance 85.0 33.3% 85.8 38.0 413.3 11.1 267.0 0.4

Mouwasat Medical Services Co 58.8 15.2% 62.0 43.0 19.6 4.1 59.5 0.8

Arabian Cement Co 53.5 12.2% 64.0 43.7 11.5 1.5 83.9 1.2

Top 5 Losers


52 wk High

52 wk Low

P/E P/B Value

Traded (USDmn)

MCAP (USDbn)

Amana Cooperative Insurance 44.2 -20.2% 292.0 27.3 NA 6.0 440.7 0.4

Allied Cooperative Insurance 44.8 -17.0% 73.5 13.6 NA 15.9 600.5 0.2

Wataniya Insurance Co 101.5 -15.2% 153.8 77.0 91.8 11.6 134.4 0.3

Saudi Printing and Packaging 34.9 -11.2% 43.5 24.3 18.8 2.6 108.8 0.6

Arabian Pipes Co 27.1 -11.2% 33.1 19.0 NA 1.5 91.4 0.3

Top 5 Volume Traded


52 wk High

52 wk Low


(mn)

MCAP (USDbn)

Northern Region Cement Co 22.4 124.0% 68.0 17.8 18.3 2.1 901.1 1.1

Dar Al Arkan Real Estate Dev. 8.4 -5.6% 16.9 7.5 9.1 0.6 402.9 2.4

Mobile Telecommunications Co 8.4 -2.9% 14.2 7.4 NA 1.2 379.5 2.4

Alinma Bank 13.3 -1.5% 16.9 11.5 27.2 1.2 402.9 5.3

Emaar The Economic City 9.5 -4.1% 22.3 7.5 43.6 1.1 192.1 2.2

Top 5 Value Traded


52 wk High

52 wk Low

P/E P/B Value

Traded (USDmn)

MCAP (USDbn)

Northern Region Cement Co 22.4 124.0% 68.0 17.8 18.3 2.1 5,740.9 1.1

Saudi Basic Industries Corp. 91.8 -2.4% 110.3 84.8 4.6 1.9 2,299.0 73.6

Alinma Bank 13.3 -1.5% 16.9 11.5 27.2 1.2 402.9 5.3

Solidarity Saudi Takaful Co 34.9 -1.4% 41.4 19.5 NA 4.3 948.4 0.5

Dar Al Arkan Real Estate Dev. 8.4 -5.6% 14.3 7.5 9.1 0.6 922.1 2.4

Source: TASI, Reuters & Global Research


18

Market capitalization At the end of February, the total market capitalization of listed companies on the TASI declined 0.6% to USD381.6bn (SAR1,431.1bn) from USD383.9bn (SAR1,439.8bn) in January. The decline was mainly caused by sector heavyweights Petrochemical and Telecommunication, down 2.0% and 1.3%, respectively. However, gains in another heavyweight Banking (up 0.4%) arrested the fall to a certain extent. In the Petrochemical sector, SABIC fell USD1.8bn (SAR6.7bn), while in the Telecommunication sector, Saudi Telecom declined USD0.5bn (SAR1.8bn). On the other hand, Banking major SABB added USD0.4bn (SAR1.4bn).

Largest Ten Listed Companies In Market Capitalization (in SARbn)


Saudi Basic Industries Corp 275.3 282.0 304.5 -2.4% -9.6%

Al Rajhi Banking and Investment Corp 102.8 103.9 118.5 -1.1% -13.3%

Saudi Telecom Co 80.0 81.8 76.4 -2.2% 4.7%

Kingdom Holding Co 74.7 74.5 41.0 0.3% 82.4%

Etihad Etisalat Company 57.2 57.9 43.8 -1.3% 30.7%

Saudi Electricity Co 56.9 56.9 59.0 0.0% -3.5%

Saudi Arabian Fertilizers Co 51.0 51.9 45.7 -1.8% 11.6%

Samba Financial Group 40.3 40.8 47.0 -1.1% -14.3%

Riyad Bank 35.0 34.6 39.0 1.1% -10.4%

Saudi British Bank 33.2 31.8 35.0 4.4% -5.0%

Total Market Capitalization (Top 10 stocks) 806.2 816.0 809.7 -1.2% -0.4%

Source: TASI, Gulfbase & Global Research

Saudi market witnesses continued IPO activity in 2013 Saudi Arabia continues to witness IPO activity in 2013. Northern Region Cement Co. launched its IPO in January, offering 90mn shares at SAR10.0 each, and began trading on the bourse on February 5. In new launches, National Medical Care Co. announced its IPO on February 10, offering 13.5mn shares at a price of SAR27.0.


19

UAE – Abu Dhabi

Market continues its uptrend in February Abu Dhabi’s ADX Index surged 5.7% in February 2013, after rising 9.5% the previous month. The index reached a 34-month high at the beginning of the month as strong 4Q12 earnings performance and anticipation of generous dividend payouts in the banking sector boosted investor sentiment. The upside continued as Aldar Properties recommended a cash dividend of AED0.06 per share for 2012, up 20%YoY. The proposed shareholder meeting to vote for the merger of Aldar Properties and Sorouh Real Estate was also a positive. The market reached its highest level in over three years at the end of February as investors opted for banking stocks.

While the current law does not permit listing of private joint stock companies (PSJC) on the bourse, ADX is seeking options to amend the law to expand its product offerings and boost market volumes. The exchange is in the process of developing a legal framework for the trading of PJSC. Meanwhile, ADX, in alliance with DFM, completed 85% work on setting procedures and systems for liquidity providers, market makers, and margin trading, lending and borrowing. The new rules are expected to be implemented during 2Q13. In addition, ADX intends to launch an electronic trading system, Xstream, by November 2013 and replace the existing system.

ADX Index and Volume Performance and Sectoral Performance

Source: ADX Stock Exchange & Global Research

Sectoral Performance Abu Dhabi Real Estate index emerged as the best performer, gaining 10.7% during the month, due to the rally in Aldar Properties (up 7.7% in February) and Sorouh Real Estate (up 8.0%). Aldar reported net profit of USD354mn (AED1.3bn), an increase of 109%YoY, led by higher property sales to the government. Also, Eshraq Properties and Rak Properties surged 21.6%MoM and 29.6%MoM, respectively, in February. Abu Dhabi Investment and Financial Services Index (+10.6%) emerged as the second best performer during the month. This could be ascribed to a rise in Waha Capital (+10.6%). The company’s net profit grew 38.1%YoY to AED214.4mn in 2012. The Banking Index advanced 5.8% as heavyweights ended in the green. National Bank of Abu Dhabi, First Gulf Bank and Abu Dhabi Commercial Bank expanded 3.2%, 5.9% and 13.2%, respectively. Recently, Abu Dhabi Commercial Bank raised USD1.5bn through a two-tranche bond issue. Also, National Bank of Abu Dhabi issued 15-year Uridashi bonds worth USD16.6mn (AED60.1mn) to attract Japanese retail investors. The Telecom index rose 5.6% during the month; Etisalat (up 5.6%) reached a three-month high as it announced a 16.7%YoY increase in DPS to AED0.70 for 2012. This overshadowed concerns related to lower-than-expected earnings. The company also signed an agreement with Huawei to boost broadband and digital services. Furthermore, the telecom major formed a technological agreement with Alcatel-Lucent to provide 4G LTE-FDD network and high-speed mobile broadband services. The Energy Index moved up 0.7%. Dana Gas advanced 4.1% after reporting 19.6%YoY increase in net profit to USD165mn (AED605mn) in 2012. Moreover, the company sold over 50% stake in MOL Hungarian Oil and Gas for USD135mn; the move was well received by the market.

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ADX Index


20

Continued increase in trading activity Total volume traded on the ADX increased 37.9%MoM to 4.5bn shares in February. Market turnover totaled USD1.4bn (AED5.0bn), a rise of 11.6%MoM, during the month.

In terms of total traded volume and turnover, the Services index witnessed the highest growth of 3.1x and 2.1x, respectively, compared to the previous month. The Real Estate index accounted for 76% of the total traded volume and 60% of the total traded value. On MoM basis, volume and turnover traded on the index grew 49.2% and 15.3%, respectively. This was ascribed to Eshraq Properties and Rak Properties that reported an increase of 2.9x each in total traded turnover (on MoM basis). Eshraq Properties’ net profit totaled AED285.7mn in 2012 as against a loss of AED1.3mn in 2011. Rak Properties posted net profit of AED147mn in 2012, up 35.6%YoY, due to higher demand for its prime projects, Mina Al Arab, RAK Tower and Julphar Towers.

The Banking index constituted 5% and 21% of the total volume and turnover, respectively, in February. Total traded volumes grew 12.7%, while turnover rose 0.7% on MoM basis.

The advance-to-decline ratio was favorable at 3.3:1 in February. While 40 stocks advanced, 12 stocks ended in the red and 14 remained unchanged.

ADX Trading Statistics – Top 5

Top 5 Gainers


52-wk High

52-wk Low

P/E P/B Value

Traded (USDmn)

MCAP (USDbn)

Abu Dhabi Ship Building PJSC 1.5 42.2% 1.6 0.9 50.2 0.6 0.1 0.1

Commercial Bank International PSC 1.8 38.5% 2.1 0.8 11.0 1.4 0.5 0.7

Ras Al Khaimah Poultry and Feed 1.5 31.6% 1.6 1.0 NA 0.4 0.1 0.0

RAK Properties PJSC 0.6 29.5% 0.6 0.3 7.6 0.3 162.3 0.3

Insurance House PSC 1.2 22.3% 1.2 0.9 NA 1.1 0.0 0.0

Top 5 Losers


52-wk High

52-wk Low

P/E P/B Value

Traded (USDmn)

MCAP (USDbn)

Green Crescent Insurance Co 0.5 -19.6% 1.3 0.4 NA 0.5 0.3 0.0

Fujairah Building Industries Co PSC 1.6 -18.9% 2.0 1.6 NA 1.0 0.1 0.1

National Bank of Fujairah PSC 3.4 -9.9% 5.6 3.4 12.4 1.7 0.1 1.0

Sudatel Telecom Group Ltd 1.1 -4.4% 1.4 0.9 7.9 0.8 0.6 0.3

National Marine Dredging PSC 9.8 -4.3% 11.0 9.0 6.7 0.7 0.1 0.6

Top 5 Volume Traded


52-wk High

52-wk Low


(mn)

MCAP (USDbn)

Eshraq Properties Co PJSC 0.6 21.6% 0.8 0.3 4.1 0.8 1,301.1 0.3

RAK Properties PJSC 0.6 29.5% 0.6 0.3 7.6 0.3 1,105.1 0.3

Aldar Properties PJSC 1.5 7.7% 1.7 1.0 5.0 0.8 726.4 1.9

Dana Gas Co PJS 0.5 4.1% 0.5 0.4 5.5 1.5 410.3 0.9

Sorouh Real Estate Co PJSC 1.9 8.0% 2.0 0.9 11.5 0.8 281.0 1.4


21

Top 5 Value Traded


52-wk High

52-wk Low

P/E P/B Value

Traded (USDmn)

MCAP (USDbn)

Aldar Properties PJSC 1.5 7.7% 1.7 1.0 5.0 0.8 294.3 1.9

Eshraq Properties Co PJSC 0.6 21.6% 0.8 0.3 4.1 0.8 227.5 0.3

RAK Properties PJSC 0.6 29.5% 0.6 0.3 7.6 0.3 162.3 0.3

Sorouh Real Estate Co PJSC 1.9 8.0% 2.0 0.9 11.5 0.8 138.9 1.4

Emirates Telecommunication Corp 10.2 5.6% 10.4 8.5 12.2 2.0 89.0 22.0

Source: Reuters, Gulfbase & Global Research

Market capitalization At the end of February 2013, market capitalization of companies listed on the ADX aggregated USD79.6bn vis-à-vis USD75.4bn at the end of January (Source: Zawya). Growth was led by Emirates Telecommunication Corporation (up 5.6%MoM), National Bank of Abu Dhabi (4.3%MoM), First Gulf Bank (5.9%MoM) and Abu Dhabi Commercial Bank (13.3%MoM). Total market cap of the top 10 listed companies in terms of market capitalization increased 5.9%MoM to AED234.6bn during the same period.

Largest Ten Listed Companies In Market Capitalization (in AEDbn)


Emirates Telecommunication Corp Ltd 80.7 76.4 74.7 5.6% 7.9%

National Bank of Abu Dhabi PJSC 44.2 42.4 33.0 4.3% 34.0%

First Gulf Bank PJSC 40.7 38.4 30.5 5.9% 33.5%

Abu Dhabi Commercial Bank PJSC 22.5 19.9 18.1 13.3% 24.5%

Union National Bank PJSC 9.4 9.4 7.9 0.0% 19.1%

National Bank of Ras Al Khaimah PSC 8.5 7.8 7.0 9.8% 22.0%

Abu Dhabi Islamic Bank PJSC 8.4 8.2 8.4 2.9% 0.0%

Abu Dhabi National Energy Co PJSC 8.3 8.6 7.9 -2.9% 5.5%

Aldar Properties PJSC 6.9 5.8 5.0 18.2% 37.4%

Sorouh Real Estate Co PJSC 5.0 4.6 3.3 8.0% 52.0%

Total Market Capitalization (Top 10 stocks) 234.6 221.4 195.7 5.9% 19.9%



22

UAE – Dubai

DFM market rises further in February Dubai Financial Market (DFM) rose 2.1% in February 2013. Investors expected strong earnings announcements from Emaar Properties that, in turn, supported the DFM (up 16.3% in January). The market commenced the month on a negative note as Emaar Properties’ 4Q12 earnings of USD139mn (AED512mn) missed market estimates of AED538mn. However, DFM recovered mid-February and reached a three-year high. This could be ascribed to Emaar Properties (up 8.8%) reaching a 51-month high on optimism over the Dubai real estate sector and positive economic outlook for the UAE. The HSBC UAE Purchasing Managers’ Index fell slightly to 55.0 in January from 55.6 in December. However, a reading above 50.0 denotes expansion. Positive reading is due to the robust increase in export orders. Also, better-than-expected earnings performance of Emirates Integrated Telecommunications Co. supported the market. The company’s net profit grew 80.4%YoY in 2012, led by the 14.7% increase in revenues (on higher subscriber base) and favorable impact of a new formula for calculating royalty fee. The market continued its uptrend as Emaar Properties announced plans to develop two luxury hotels and a service apartment in central Dubai. However, DFM witnessed correction at the end of the month as Arabtec Holding fell 9.8%. The company aims to raise USD450mn through convertible bonds which investors believe could dilute the stock based on the convertible price. Emaar Properties announced lower-than-expected cash DPS of AED0.10 for 2012 that further dented investor sentiment.

DFM Index and Volume Performance and Sectoral Performance


Sectoral performance The Telecommunication Index advanced 18.0% in February 2013 and ended as the best performer. The rally was ascribed to Emirates Integrated Telecommunications Co’s strong earnings performance (up 18.0%). The Banking Index expanded 2.0% led by Commercial Bank of Dubai (21.0%) and Emirates NBD (1.6%). Central Bank of UAE is expected to ease norms related to mortgage lending due to protests from leading banks in the region. This could act as a positive trigger for banking and real estate stocks. The Real Estate and Construction Index was up 1.9% owing to Emaar Properties (8.8%); however, a fall in other construction stocks capped gains. Industrial Index (down 10.0%) was the biggest loser due to a fall in National Cement Co. (10.0%). Services Index, the best performer in January, fell 5.5% in February due to National Central Cooling Co (fell 5.5% on concerns that minority shareholders may dilute their stake). Investment and Financial Services Index declined 3.5% due to Dubai Financial Market Co. (down 5.5%); however, the bourse recorded a net profit of AED35.2mn in 2012 vis-à-vis net loss of AED6.9mn in 2011.

Significant decline in trading activity DFM’s total traded volume decreased 37.1%MoM to 4.8bn shares in February 2013. Total traded turnover slid 19.2%MoM to AED7.0bn.

0

250

500

750

1,800

1,900

2,000

3-F

eb

6-F

eb

11

-Fe

b

14

-Fe

b

19

-Fe

b

24

-Fe

b

27

-Fe

b

in

mn


-10.0%

-5.5%

-3.5%

-3.2%

0.0%

0.3%

1.9%

2.0%

18.0%

2.1%

-25.0% 0.0% 25.0%

Industrial

Services

Invest. & Fin. Services

Insurance

Consumer Staples

Transportation

Real Est. & Const.

Banks

Telecommunication

DFM


23

Banking index (34.4% of the total traded volume and 18.8% of the total turnover) witnessed 33.5% and 35.8% drop in volumes and traded value, respectively, over the previous month. Gulf Finance House (up 4.4%) continued to remain the most actively traded stock in terms of volume. The company’s net profit stood at USD10.0mn in 2012 compared to a mere USD0.4mn in 2011. Real Estate and Construction index accounted for 29.5% of the total traded volume and 51.6% of the total turnover. On MoM basis, total traded volume fell 26.5%, but traded turnover rose 9.3%. Emaar Properties continued to be the most actively traded stock in terms of turnover, which totaled AED2.2bn (up 18.8% over January). Arabtec Holding was also one of the most actively traded stocks in terms of turnover, which stood at AED1.0bn, an increase of 43.7%MoM. The advance-to-decline ratio was adverse at 0.3:1 in February. While 8 stocks ended positive, 24 stocks ended in the red and 27 remained unchanged.

DFM Trading Statistics – Top 5

Top 5 Gainers


52-wk High

52-wk Low

P/E P/B Value

Traded (USDmn)

MCAP (USDbn)

Commercial Bank of Dubai PSC 3.7 21.0% 3.7 2.7 9.0 1.2 0.6 2.0

Emirates Integrated Telecom Co 4.3 18.0% 4.3 2.9 9.8 2.8 74.5 5.3

International Financial Advisors 0.7 14.9% 0.9 0.5 NA 4.4 0.0 0.1

Emaar Properties PJSC 5.3 8.8% 5.4 2.7 15.0 1.0 608.9 8.8

Ajman Bank PJSC 1.6 8.3% 1.7 0.8 47.5 1.5 65.9 0.4

Top Losers


52-wk High

52-wk Low

P/E P/B Value

Traded (USDmn)

MCAP (USDbn)

Takaful Emarat Insurance PJSC 0.6 -13.2% 0.8 0.5 2.2 0.9 1.5 0.0

Deyaar Development PJSC 0.3 -11.3% 0.5 0.3 51.0 0.5 19.6 0.5

Al Salam Bank Sudan 1.7 -11.1% 2.1 1.3 1.3 0.4 1.3 0.1

Gulf General Investment Co PSC 0.3 -10.8% 0.4 0.3 NA 0.4 0.3 0.2

Union Properties PJSC 0.4 -10.4% 0.5 0.3 8.5 0.6 15.6 0.4

Top 5 Volume Traded


52-wk High

52-wk Low


(mn)

MCAP (USDbn)



National Central Cooling Co PJSC 1.5 -5.5% 2.4 1.1 19.6 0.2 370.6 0.3

Air Arabia PJSC 0.9 3.6% 0.9 0.5 10.2 0.8 357.7 1.2

Arabtec Holding PJSC 2.7 -9.8% 3.5 2.1 17.0 1.4 344.2 1.1

Top 5 Value Traded


52-wk High

52-wk Low

P/E P/B Value

Traded (USDmn)

MCAP (USDbn)


Arabtec Holding PJSC 2.7 -9.8% 3.5 2.1 17.0 1.4 281.4 1.1

National Central Cooling Co PJSC 1.5 -5.5% 2.4 1.1 19.6 0.2 165.5 0.3


Dubai Financial Market PJSC 1.2 -5.5% 1.3 0.9 396.8 1.3 89.0 2.6

Source: Reuters, Gulfbase & Global Research


24

Market capitalization At the end of February 2013, market capitalization of companies listed on the DFM stood at USD40.6bn vis-à-vis USD39.1bn at the end of January (Source: Zawya). This was driven by Emaar Properties (up 8.8%MoM), Emirates NBD (1.6%MoM) and Emirates Integrated Telecommunication Co. (18.0%MoM). Market capitalization of the top 10 listed companies increased 5.5%MoM to AED119.9bn during the same period.

Largest Ten Listed Companies In Market Capitalization (in AEDbn)


Emaar Properties PJSC 32.3 29.7 19.2 8.8% 67.7%

Emirates NBD Bank PJSC 21.5 21.1 18.8 1.6% 14.2%

Emirates Integrated Telecommunications Co 19.5 16.5 14.3 18.0% 36.1%

Dubai Financial Market PJSC 9.7 10.2 8.6 -5.5% 13.1%

Mashreqbank PSC 9.3 9.3 15.5 0.0% -39.9%

Dubai Islamic Bank PJSC 8.4 8.5 8.4 -1.3% -0.5%

Commercial Bank of Dubai PSC 7.5 6.2 6.6 21.0% 14.0%

Air Arabia PJSC 4.3 4.1 3.5 3.6% 21.6%

Arabtec Holding PJSC 4.2 4.6 5.4 -9.8% -22.8%

Dubai Investment PJSC 3.3 3.4 3.0 -1.7% 10.0%

Total Market Capitalization (Top 10 stocks) 119.9 113.7 103.3 5.5% 16.0%



25

Appendix 1: MENA and Global market performance in February 2013

GCC Markets Indices Up/Down Close % Chg (MoM)

% Chg (YTD)

P/E (x) P/B (x) Div Yield

(%)

KSE Weighted Index ▼ 432 -0.1% 3.4% 25.1 1.3 3.1%

KSE Price Index ▲ 6,463 3.5% 8.9% 27.5 1.2 2.8%

Tadawul All Share Index ▼ 6,998 -0.6% 2.9% 14.7 1.8 3.6%

DFM Index ▲ 1,927 2.1% 18.8% 12.7 0.8 3.3%

ADX Index ▲ 3,045 5.7% 15.7% 9.4 1.1 4.4%

Bahrain All Share ▲ 1,090 0.4% 2.3% 10.5 0.8 4.1%

QE Index ▼ 8,529 -2.2% 2.0% 10.9 1.6 5.0%

MSM30 Index ▲ 5,976 3.0% 3.7% 11.2 1.6 4.2%

Levant & North Africa Markets Up/Down Close % Chg (MoM)

% Chg (YTD)


(%)

Egypt - EGX30 ▼ 5,489 -2.1% 0.5% 19.1 1.3 4.8%

Egypt-- EGX70 ▲ 471 1.2% -1.2% 19.3 1.4 4.2%

Jordan-- Amman Fr Flt Index ▼ 2,042 -0.2% 4.3% 14.7 1.1 4.1%

Palestine - AlQuds Index ▼ 472 -0.1% -1.3% NA NA NA

Lebanon - BLOM Stk Index ▲ 1,208 0.6% 3.4% 7.1 0.9 4.5%

Morocco - CASA All Share index ▼ 8,933 -0.7% -4.6% 14.0 2.2 4.5%

Tunisia - Tunisia Main Index ▼ 4,636 -2.6% 1.2% 24.2 2.0 1.3%

International Indices Up/Down Close % Chg (MoM)

% Chg (YTD)


(%)

DJ Average ▲ 14,054 1.4% 7.3% 13.7 2.8 2.5%

NASDAQ Composite ▲ 3,160 0.6% 4.7% 22.2 2.8 1.5%

S&P500 Comp. ▲ 1,515 1.1% 6.2% 15.0 2.3 2.2%

FTSE 100 - UK ▲ 6,361 1.3% 7.9% 17.8 1.8 3.7%

Extra DAX ▼ 7,742 -0.4% 1.7% 14.9 1.5 3.3%

CAC 40 - France ▼ 3,723 -0.3% 2.3% 14.0 1.2 3.8%

International Indices Up/Down Close % Chg (MoM)

% Chg (YTD)


(%)

Bovespa Index ▼ 57,424 -3.9% -5.8% 22.7 1.1 4.6%

RTS Index ▼ 1,534 -5.4% 0.5% 5.7 0.8 3.8%

Bombay SE SENSEX -India ▼ 18,862 -5.2% -2.9% 16.1 2.6 1.6%

SSE Composite Index - Shanghai ▼ 2,366 -0.8% 4.3% 13.1 1.7 2.4%

NIKKEI 225 INDEX- Japan ▲ 11,559 3.8% 11.2% 23.4 1.4 1.8%

Hang Seng - Hong Kong ▼ 23,020 -3.0% 1.6% 11.5 1.5 3.1%

Source: Reuters, Bloomberg & Global Research


26

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