GCC trad­ing ac­tiv­ity gets a boost from Kuwait, Saudi

Kuwait Times - - BUSINESS -

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.

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