MSM30: Best weekly performance
The MSM30 index posted its best performance since late March 2016 due to increased local institutional support to leading stocks such as telecoms and some banks in addition to the strategic moves of the fund managers ahead of year-end. MSM30 closed the week up by 3.1 per cent at 4,548.72. All subindices closed up led by the Financial Index (2.81 per cent) followed by the Industrial Index (1.49 per cent) and then the Services Index (1.17 per cent). The MSM Shariah Index also closed up by 2.57 per cent w-o-w.
Galfar Engineering and Contracting Co said that it has entered into a contract worth RO 5.37 million related to some work at Duqm from Saipem SPA, Oman. The parent company’s order book at the end of 9M’18 stood at RO 456 million. The group’s net profit for 9M’18 was RO 2.24 million compared with a net loss of RO 3.76 million during the same period last year.
Raysut Cement disclosed on MSM that it has been awarded a contract related to installation of Waste Heat Recovery System that will use the currently wasted heat to generate 9MW of power. The project is expected to take at least 18 months to be completed. As per various media sources, the company expects to save up to 30 per cent of its power cost upon completion of this project. Such saving is notable taking into account that the cost of fuel, gas and electricity to the revenue is about 34 per cent.
Furthermore, Raysut Cement disclosed on the MSM website about the news circulated in several local and international media regarding the expansion plans of the company. The company disclosed that such plans are at a premature stage pending board approval. During the week, many news sources have indicated that Raysut is in the process of investing hundreds of millions of dollars in acquisitions in India and Africa.
Similarly, Oman Cement disclosed that its board of directors has agreed to set up a new integrated cement plant in Duqm area. The plant will have a clinker production capacity of 5,000 TPD and it is estimated to cost $212 million (about RO 82 million). The new plant capacity represents about 58 per cent of Oman Cement clinker capacity.
In the weekly technical analysis, as we mentioned in our last recommendation that the MSM30 index will reach the level of 4,540 points, which is happened, currently MSM30 index is above the 50day moving average and the index will move towards 4,600 points if MSM30 index closed above 4,540 points. Currently the index have a support level at 4,500 points.
MSM 30 Index performance during November was moderate and victim to external factors, despite relatively good results posted by the listed companies. The general index closed down by 0.25 per cent MOM with average daily turnover and volume of RO 1.88 million and 15.8 million shares, notable down on yearly basis (Nov’17; RO 7.5 million, 20.2 million shares). 2018 was not a good year for many GCC financial markets due factors including investors being overly cautious and other external factors. The below chart indicates the MSM30 monthly performance in 2018.
Foreign institutional investments registered a net buy of RO 2.16 million in November, which is the second month in raw to see the entry of those investments. However, for 11M’18, foreign investments were net sellers with RO 113.8 million due to special deals.
As per the latest National Center for Statistics and Information monthly bulletin, the local production and import of natural gas reached 34.2 bcm in 9M’18, a yearly increase of 11.6 per cent. The usage rate was 100 per cent with the industrial projects stood at 58.6 per cent of the total consumption versus followed by Oil Fields (21.9 per cent), then Power generations (18.9 per cent) and finally the Industries Area (0.5 per cent).
MSM30 topped the gainers within GCC region followed by Qatar Exchange (+2.26 per cent) while Dubai Financial Market was the biggest loser closing down by 3.31 per cent.
Within the GCC, an analysis of listed banks’ financials for 9m’18 earnings indicates that Oman’s banks posted the highest increase in net loans at 6.9 per cent YOY, followed by UAE banks at 6.3 per cent, Kuwait banks at 3.4 per centyoy, Qatar banks at 3.0 per cent, and Saudi and Bahrain banks at 0.4 per cent YOY. The total GCC banking sector grew its total net loans to $1.31 trillion in 9M’18, up by 3.3 per cent YOY and 0.9 per cent QOQ, lion’s share of which lies with UAE (30.2 per cent) then Saudi Arabia (28.7 per cent).
Total GCC customer deposits of listed banks stood at $1.45trillion at the end of 9M’18, up by 1.0 per cent QOQ and 4.4 per cent YOY. Fastest YOY growth was seen in UAE banks at 8.6 per cent YOY, fllowed by Qatar banks at 4.9 per cent YOY, and Oman banks at 3.6 per cent, Kuwait at 2.1 per cent and Saudi Arabia at 1.5 per cent and Bahrain at 1.1 per cent YOY. The entire banking sector’s Loan-to-deposit ratio stood at 90.7 per cent.
Globally, data compiled by Bloomberg regarding LNG vessel tracking showed that Australia overtook Qatar as top LNG seller in November 2018 for the first time during a month. Australia exported 6.623 million tonnes of LNG in Nov’18 compared to 6.318m from Qatar. Historically, Australia LNG exports form 22.5 per cent of total World exports as per available data compared to 26 per cent for Qatar.