Weekly Market Report
The Qatar Exchange (QE) Index gained 144.83 points, or 1.52%, during the week, to close at 9,694.70 points. Market capitalization rose by 1.40% to reach QR532 billion (bn) as compared to QR524.6bn at the end of the previous week. Of the 42 listed companies, 23 companies ended the week higher, 16 fell and 3 remained unchanged. Ooredoo (ORDS) was the best performing stock with a gain of 9.44%; the stock is up 32.60% year-to-date (YTD). Qatar Cinema and Film Distribution (QCFS) was the top decliner, down 4.91%; the stock is down 8.08% YTD.
Reported second quarter (2Q2013) results remain mixed when compared to consensus’ expectations. Gulf Warehousing Co. (GWCS) and Milaha (QNNS) both exceeded expectations with GWCS reporting a net income of QR31.4 million (mn) versus our estimate of QR28.4mn. The primary reason for this growth was a 9.7% quarter-on-quarter (QoQ) decline in direct costs. Positive results helped the stock gain 1.2% on a weekly basis. QNNS posted a net profit of QR229.2mn, a drop of 33.5% QoQ. Net income exceeded our forecast of QR212.1mn. However, on a year-on-year (YoY) basis, the company’s net profit surged 45.8% on the back of robust performances from most business segments. As such, QNNS’ stock climbed by 3.4% for the week. On the other hand, Doha Bank (DHBK), the Commercial Bank of Qatar (CBQK) and Vodafone Qatar (VFQS) results fell short of expectations. DHBK reported a net profit of QR353.1mn for 2Q2013, up 0.9% YoY. On a QoQ basis, net income was down 10.7%. Reported net income fell short of our estimate of QR368.7mn (Bloomberg consensus: QR367.7mn) by around 4%. Thus, the stock was flattish for the week. Moreover, CBQK reported a net profit of QR518.2mn in 2Q2013 versus Reuters consensus of QR530.6mn. On a QoQ basis, net profit increased by 2.4% (-5.1% YoY). Asset quality weakened with the bank’s non-performing loan ratio rising to 3.5% as compared to 1.4% at March 2013. Consequently, the stock declined by 3.7% on a weekly basis. VFQS’ net loss widened sequentially to QR84.9mn versus our estimate of QR65.7mn and March quarter’s QR73.6mn. Higher-than-expected depreciation charges contributed to most of the bottom-line miss. Masraf Al Rayan (MARK) was an outlier with 2Q2013 net profit coming in-line with expectations, which helped boost the stock by 1.1% for the week.
We await results from key companies under our coverage. For 2Q2013, within our coverage universe: (1) We expect Industries Qatar (IQCD) to post a net profit of QR2.2bn (-15.3% QoQ, +1.4% YoY); (2) For Qatar Electricity and Water Co. (QEWS), we predict a net profit of QR347.4mn (+72.9% QoQ, -0.2% YoY); and (3) We estimate Al Khalij Commercial Bank (KCBK) to post a net profit of QR142.1mn (8.1% QoQ, +1.4% YoY).
Trading value during the week increased by 38.79% to reach QR1.4bn, as compared to QR974.7mn in the prior week. The Banks & Financial Services sector led the trading value during the week, accounting for 36.53% of the total equity trading value.
Trading volume increased by 19.01% to reach 28.7mn shares, as against 24.1mn shares in the prior week. The number of transactions rose by 30.73% to reach 16,699 transactions versus 12,774 transactions in the prior week. The Banks & Financial Services sector led the trading volume, accounting for 33.63% of the total volume.
Foreign institutions remained bullish for the week with net buying of QR117.8mn versus QR119.5mn in the prior week.