GCC trading activity gets a boost from Kuwait, Saudi

Boursa Kuwait was one of the only two markets in the GCC that performed positively during October-16. The Weighted Index and the KSX 15 index recorded gains of 0.6 percent and 1.5 percent, respectively, whereas the Price Index ended flat during the month, indicating higher trades in large-cap stocks. The KSE-15 Index accounted for the bulk of the value traded on the exchange at 66 percent of the total monthly value, one of the highest contributions witnessed in more than a year. The positive performance of the indices was primarily on the back of the Telecom Index that surged 8.3 percent, led by 16.4 percent returns in shares of Zain, the only positive performer in the sector. The telecom company saw heavy trading in its shares after reporting a 12 percent increase in net profit for Q3-16. This also led to a wider improvement in investor sentiment in the market resulting in one of the highest daily volume and value traded on 25-Oct-16 and 26-Oct-16 in almost 17 months. The Consumer Goods Index saw the second highest monthly gain of 3.8 percent, making it the best performing index for YTD-16 with a gain of 20 percent. The monthly surge was primarily on the back of 4 percent returns in shares of Americana, as well as 5.1 percent surge in shares of Mezzan Holding. The auction of Americana’s shares for the Adeptio deal closed during the month with the latter acquiring two-third of the shares of the Kuwaiti giant for KD 711.5 billion, according to a statement from Boursa Kuwait.

Meanwhile, the Insurance Index saw the highest monthly decline of 4 percent, continuing on its declining trend for the third consecutive month. The index has declined by 15 percent since the start of the year, second only to the 20 percent decline in the Oil & Gas Index. The monthly decline in the sector was mainly due to 7.4 percent and 3.2 percent decline in shares of Gulf Insurance and Ahleia Insurance, respectively.

Prominent gainers for the month included Housing Finance Co. with a gain of 34.7 percent, followed by Warba Bank and Zima Holding with monthly gains of 22.9 percent and 20.3 percent, respectively. On the other hand, the decliners chart was topped by Boubyan International Holding with a fall of 22.2 percent, followed by AWJ Holding and Specialities Group Holding with declines of 18.3 percent and 15.8 percent, respectively. The market breadth was skewed towards decliners, that included 86 companies whereas gainers included 48 companies.

Trading activity on the exchange saw a significant m-o-m gain, primarily due to the low base during the previous month. Total volume traded increased by 65.3 percent to reach 1.7 October-16, with the index regaining the critical 6,000 mark on the last day of the trading, representing a monthly surge of 6.9 percent. The Index closed the month at 6,012.2 points following one of the longest running positive streaks in almost two years surging almost 10.1 percent over the last nine trading sessions. However, despite the strong improvement, the TASI continues to lag behind other markets in the GCC in terms of YTD-16 returns that stood at -13.0 percent. One of the key reasons for the investor optimism was the successful sovereign bond issuance by the government. The issue was the largest emerging market sovereign bond issuance with a total size of $17.5 billion, larger than Argentina’s $16.5 billion issuance in April-16 and Qatar’s $9 billion in May-16. The issuance instilled confidence in investors about the Kingdom’s ability to deal with the expected deficits, and at the same time drive reforms to move the economy away from oil dependence. m-o-m, followed by the Energy index (+0.5 percent) and the Insurance index (+0.3 percent).

Dubai Financial Market

DFM index slid yet again in Oct-16 on a monthly basis from its close in Sept-16. DFM closed the month significantly lower by 4.1 percent at 3,332.41 points. Sectoral trends were mixed, as indices that lost ground during the month were led by Telecoms that went down by 6.5 percent, followed by Transportation that declined by 5.1 percent. Telecoms were down as both stocks in the index, DU (-6.5 percent) and Hits Telecom (-2.4 percent) witnessed share price declines. Banks also witnessed declines of 4.4 percent for the month led by Dubai Islamic Bank, which went down by 9.0 percent for the month for Oct -16. The only index that gained ground during the month, was once again the Services index, that closed up by 1.7 percent, after witnessing a 6.3 percent jump in Sept-16, as Tabreed and

The QE 20 index stayed in the negative territory in October-16 for the second consecutive month after dropping 5 percent m-o-m in September-16. The index went down by 2.5 percent m-o-m, and closed at 10,172.95 points after reaching the lowest level since July-16 at 10,142.17 points.

The Qatar All Share index also receded by 2.4 percent for the month, as all sectoral indices but one ended the month in the red. The index was pulled down mainly by Consumer Goods & Services index, which went down by 6.5 percent for the month, followed by Real Estate, which went down by 6.0 percent. Banks & Financial Services index receded by a lower 0.4 percent over the same period as earnings among the Qatari banks continue to show varying trends. The only index which went up during the month, albeit marginally was the Telecoms index, which went up by 0.1 percent as gains in the shares of Ooredoo (+1.04 percent) was partially offset by 3.4 percent decline in shares of Vodafone Qatar.

Within the banking sector, Commercial Bank of Qatar (CBQ) posted a net loss of QAR 1.4 million for Q3-16 as compared to net profit of QAR 275.3 million during Q3-15. The decline was primarily on the back of near tripling of net impairment charges during the quarter as compared to the last year.

The Bahrain All Share Index closed lower on a m-o-m basis, albeit marginally. The index, which was up the previous month, went down by 0.1 percent for Oct-16, and closed at 1148.83 points at the end of the month. Market breadth was slightly skewed towards decliners as 12 stocks advanced while 15 stocks saw lower share prices during the month. Industrials and Insurance indices were key gainers during the month moving up by over 4.5 percent & 3.5 percent respectively. Services was the key laggard for the month as it declined by 2.1 percent m-o-m, as Batelco was the major contributor to the decline, as the stock went down by 4.7 percent. Commercial Banks receded by 0.8 percent, as Ahli United Bank declined by 0.8 percent, while National Bank of Bahrain went down by 1.4 percent.

In corporate earnings released during the month Zain Bahrain reported revenues of BHD 16.95 million as compared to BHD 18.50 million from a year prior, down by 8 percent, whereas it surged by 7 percent Q2-16, from BHD 15.78 million, as a result of the increase in the customer base. Q3-16 net profit amounted to BHD 1.20 million, as Zain Bahrain’s customer base edged closer to the one million mark. The third quarter net profit dipped 10.4 percent from the BHD1.34 million earned during the same period last year, but was a 30 percent jump from the BHD 926,000 earned in Q2-16 due to an increase in revenue. National Bank of Bahrain recorded a net profit of BHD 14.49 million compared to BHD 13.69 million in Q3-15, an increase of 5.8 percent.

Muscat Securities Market

The MSM30 Index witnessed the steepest monthly decline in the GCC during October16 as a result of a decline in all of the sectoral indices. However, despite the 4.3 percent monthly decline, which was the third in a row, the index is the second-best performing market in the GCC and one of the only two positive performing markets (after Dubai) in terms of YTD-16 returns that stood at 1.4 percent at the end of October-16. The fall during the month comes amid one of the lowest monthly volumes in the regular market. Volumes on the exchanged plunged 44 percent to 127 million shares, a drop of close to 100 million shares as compared to the previous month. The monthly value traded also declined, but at a much lower pace of 5.7 percent to reach OMR 42.6 million, as compared to OMR 45 million during the previous month. The average daily volume traded during the month more than halved to 6.1 million shares as compared to 14.2 million shares during the previous month. However, the decline in average daily value traded was relatively less steep, at little more than a quarter to reach OMR 2 million as compared to OMR 2.8 million during September-16.