14 August 2011
The MSM 30 index declined 5.77 per cent in the week ended August 11 to close at 5,426, with all the three sector indices in the red. Market breadth was negative as four stocks advanced while 51 stocks declined. Market turnover was 86 per cent higher compared to that in the previous week.
Key factors that influenced market movement in the previous week include:
The US and most global equity markets saw a rout after the S&P downgraded US sovereign credit rating by one notch to AA+ with a negative outlook.
Most commodities except precious metals declined sharply on fears that US may enter into another recession while Europe continues to be shaky
Voltamp Energy (VOES) reported a 33 per cent year-on-year decline in second quarter of 2011 net profit at RO473,000 on account of a 26 per cent year-on-year increase in cost of sales while sales increased 13 per cent year-on-year. Sequentially net profit declined 8.0 per cent.
Omantel (OTEL) reported a 2.3 per cent year-on-year growth in first half of 2011 group revenues at RO223 million while net profit declined 9.8 per cent year-on-year to RO55 million.
Sequentially, net profit for second quarter of 2011 was higher by 11.5 per cent year-on-year at RO28.9 million driven by additional revenue from its submarine cable network
Ominvest (OMVS) reported a 13.7 per cent quarter-on-quarter decline in net profit at RO2.14 million mainly due to significantly higher net provisions for credit losses. First half 2011 net profit declined 19 per cent year-on-year to RO4.62 million while total operating income increased marginally by 3.6 per cent year-on-year.
Among the top gainers of the week, we recommend buying United Finance (UFCI). UFCI reported a 636 per cent year-on-year increase in net profit in second quarter of 2011 at RO795,000 and 96 per cent higher quarter-on-quarter. The sharp increase in second quarter of 2011 is mainly attributable to a sharp 82 per cent quarter-on-quarter decline in provisions for loan impairment. Net installment finance income increased 26 per cent quarter-on-quarter while net disbursements saw a modest 2.3 per cent growth quarter-on-quarter.
Al Anwar Ceramic Tiles (AACT) has been a clear outperformer in the industry sector declining 5.0 per cent year-to-date as against a 18 per cent year-to-date decline in the industry index. AACT has got a robust business model and a growing presence in the GCC especially in Saudi Arabia where growth prospects are high.
The company's fourth production line is expected to come on stream next year increasing production capacity by three million sqm. The company is also planning another three million sqm capacity expansion which will increase production capacity by 60 per cent over the next few years. AACT trades at an attractive valuation of 9x coupled with a good ROE .The latest market selloff provides an excellent opportunity for long term investors to pick this stock at around RO0.265.
GCC market outlook
All the GCC markets ended the week in the red ranging from a 1.1 per cent decline in Bahrain to a nearly 6.0 per cent decline in the Saudi index. Crude oil declined 1.6 per cent and the S&P 500 index dropped 1.7 per cent for the week. The MSM continues to be the worst performing market in the region with a year-to-date loss of 19.6 per cent.
Qatar Electricity and Water (QEWS) reported stronger than expected results in second quarter of 2011 with revenues growing 30 per cent quarter-on-quarter and 49 per cent year-on-year to QR1.2 billion. Electricity sales increased 63 per cent quarter-on-quarter. Net profit for second quarter of 2011 amounted to QR443 million, 94 per cent higher over first quarter of 2011 and 41 per cent higher over second quarter of 2010.
Net profit for first half of 2011 grew 43 per cent year-on-year to QR671 million mainly due to a 52 per cent year-on-year growth in revenues and a slower 30 per cent increase in cost of sales after the company commissioned its Ras Girtas power station.
The MSM 30 index declined 5.77 per cent in the week ended August 11 to close at 5,426, with all the three sector indices in the red. Market breadth was negative as four stocks advanced while 51 stocks declined. Market turnover was 86 per cent higher compared to that in the previous week.
Key factors that influenced market movement in the previous week include:
The US and most global equity markets saw a rout after the S&P downgraded US sovereign credit rating by one notch to AA+ with a negative outlook.
Most commodities except precious metals declined sharply on fears that US may enter into another recession while Europe continues to be shaky
Voltamp Energy (VOES) reported a 33 per cent year-on-year decline in second quarter of 2011 net profit at RO473,000 on account of a 26 per cent year-on-year increase in cost of sales while sales increased 13 per cent year-on-year. Sequentially net profit declined 8.0 per cent.
Omantel (OTEL) reported a 2.3 per cent year-on-year growth in first half of 2011 group revenues at RO223 million while net profit declined 9.8 per cent year-on-year to RO55 million.
Sequentially, net profit for second quarter of 2011 was higher by 11.5 per cent year-on-year at RO28.9 million driven by additional revenue from its submarine cable network
Ominvest (OMVS) reported a 13.7 per cent quarter-on-quarter decline in net profit at RO2.14 million mainly due to significantly higher net provisions for credit losses. First half 2011 net profit declined 19 per cent year-on-year to RO4.62 million while total operating income increased marginally by 3.6 per cent year-on-year.
Among the top gainers of the week, we recommend buying United Finance (UFCI). UFCI reported a 636 per cent year-on-year increase in net profit in second quarter of 2011 at RO795,000 and 96 per cent higher quarter-on-quarter. The sharp increase in second quarter of 2011 is mainly attributable to a sharp 82 per cent quarter-on-quarter decline in provisions for loan impairment. Net installment finance income increased 26 per cent quarter-on-quarter while net disbursements saw a modest 2.3 per cent growth quarter-on-quarter.
Al Anwar Ceramic Tiles (AACT) has been a clear outperformer in the industry sector declining 5.0 per cent year-to-date as against a 18 per cent year-to-date decline in the industry index. AACT has got a robust business model and a growing presence in the GCC especially in Saudi Arabia where growth prospects are high.
The company's fourth production line is expected to come on stream next year increasing production capacity by three million sqm. The company is also planning another three million sqm capacity expansion which will increase production capacity by 60 per cent over the next few years. AACT trades at an attractive valuation of 9x coupled with a good ROE .The latest market selloff provides an excellent opportunity for long term investors to pick this stock at around RO0.265.
GCC market outlook
All the GCC markets ended the week in the red ranging from a 1.1 per cent decline in Bahrain to a nearly 6.0 per cent decline in the Saudi index. Crude oil declined 1.6 per cent and the S&P 500 index dropped 1.7 per cent for the week. The MSM continues to be the worst performing market in the region with a year-to-date loss of 19.6 per cent.
Qatar Electricity and Water (QEWS) reported stronger than expected results in second quarter of 2011 with revenues growing 30 per cent quarter-on-quarter and 49 per cent year-on-year to QR1.2 billion. Electricity sales increased 63 per cent quarter-on-quarter. Net profit for second quarter of 2011 amounted to QR443 million, 94 per cent higher over first quarter of 2011 and 41 per cent higher over second quarter of 2010.
Net profit for first half of 2011 grew 43 per cent year-on-year to QR671 million mainly due to a 52 per cent year-on-year growth in revenues and a slower 30 per cent increase in cost of sales after the company commissioned its Ras Girtas power station.
© Times of Oman 2011
