16 August 2009
KUWAIT: Kuwait Stock Exchange (KSE) ended the week up supported by significant increased in trading activity led by increased demand on leading market stocks. As measured by Global's weighted General Index, KSE was up by 1.45 percent at the end of the week and closed at 217.89 points. On year-to-date basis, the index is up by 5.56 percent. On the other hand, Kuwait Stock Exchange (KSE) price index was up for the week, rising 172.50 points (2.23 percent) as it closed at 7,920.80 points. The market capitalization reached KD35.39bn. Market breadth skewed towards decliners as out of 170 shares traded, 74 shares closed at lower prices, against 70 stocks advanced.
Trading activity was higher compared to the week before. Total trading volume on the exchange was down by 112.49 percent, with 2.12bn shares changing hands at a total value of KD690.62mn (an increase of 139.94 percent from last week's value). High volume was seen on the Investment stocks with the sector accounting for 31.80 percent of the total traded volume this week with 673.64mn shares traded.
International Financial Advisors was the volume leader in the sector and topped the volume list for the week with 262.82mn shares traded, accounting for 12.41 percent of the total traded volume. The scrip ended the week up by 2.70 percent at KD0.152. The Services sector topped the value list with KD386.96mn traded on the sector, accounting for 56.03 percent of the total market traded value.
Intense trading on the biggest Kuwaiti listed company, Zain cause the high figure. Zain topped the value list and was up by 4.76 percent at the end of the week with KD280.11 traded value, it's share price closed at KD1.320, causing a huge support to the market index. Agility was the second in the service sector and in the market with KD57.93mn traded value. Market sectors' performance continued to be positive this week, with 5 sectors ended the week in the positive territory, and the two in the negative side, while one sector ended unchanged.
Global Food Index was the biggest gainer, adding 29.04 percent from its value. Kuwait Food Company (Americana) were the top gainers in both the sector and the market, adding 40.32% and closed at KD1.740. Global Industrial Index followed, after adding 7.52 percent of its value. Gulf Rocks Company was significantly up by 39.13 percent.
The scrip closed at KD0.320. The Services Index was the third biggest gainer, adding 3.06 percent. On the other hand, Banking Index was the biggest loser, shedding 3.09 percent from its value. The Gulf Bank Burgan Bank, and National Bank of Kuwait affected the sector loosing 5.88 percent, 5.06 percent, 4.84 percent and closed at KD0.320, KD0.375, and KD1.180 respectively. Real Estate Index followed, after a drop of 0.25 percent from its value.
Looking at Global's special indices, all ended on a negative note. Global Small Cap. (Low 10) Index was the biggest loser, down by 14.69 percent, while Global Sharia'a compliant Islamic Index was closed down by 2.15 percent. On the other hand, Global Large Cap. (Large 10) lost 0.60 percent to its value.
Money supply (M2) in Gulf economies continues to be a concern with most of the six nations experiencing contractions in June, the most recent period for which data is available. Money supply fell in June in Bahrain and Kuwait by 0.4 and 0.1 percent month-onmonth, respectively. It increased by one per cent in Saudi Arabia and by 0.5 percent in the UAE during the same period. At the same time, bank assets declined in Kuwait by 1 percent. Kuwait's Central Bank said it would issue KD100mn (US$347.6mn) of one-year treasury bonds on August 12 with a coupon rate of 1.5 percent. Bids for the bonds amounted to KD250mn. Kuwait's Central Bank has been increasing the number of bond issues this year to absorb excess liquidity.
An oil price of US$70 to US$90 a barrel in 2010 would be acceptable to Kuwait given the state of global finance, Imad al-Atiqi, a member of Kuwait's Supreme Oil Council said. Al-Atiqi said a price above US$100 was detrimental to the interests of oil producers in the long-term. High prices encourage development of alternative energy sources that reduces long-term demand for oil, he added.
China's Sinopec Group said its planned US$9bn refinery with Kuwait would be built in Zhanjiang city in the southern province of Guangdong.
The project will be completed in 2013, and the partners hoped to win Beijing's final approval within months. The two sides will start feasibility studies for the new site and an evaluation report on environmental impact. The refinery is expected to produce 300,000 barrels-per-day and one million tonne-per-year ethylene complex that produces plastics and chemical fibre. (Source: Reuters)
Kuwait has lowered the official selling price (OSP) for its crude oil sales to Asian buyers for September by US$1.50 a barrel to US$1.50 a barrel below the average of Oman/Dubai quotes, a trader said. Kuwait set its OSP at parity to the Oman/Dubai average for August loading, and the September price was as expected.
Authority for Housing Welfare (PAHW) was currently studying a proposal to establish private companies that will make study plans and execute housing projects in Kuwait.
The proposal will suggest the establishment of more than one company, and each will be responsible for planning the construction of a whole residential area. The plan is similar to a previous law which established companies to construct low-cost housing developments.
The government has no intention to further delay the enactment of the new private sector labor law, since it has approved the law, in principle, said Minister of Social Affairs and Labor Dr Mohammad Al-Afasi. The recent announcement of the Minister has generated positive reactions from political figures and the public, in general. A US court has extended a temporary freeze on the assets of a Kuwaiti businessman, Hazem Khalid Al Braikan, after being accused of planting false stories about takeovers of US companies. Also named in the asset freeze order were KIPCO Asset Management, United Gulf Bank; and Al Raya Investment. The rate of national employment at the Oil Sector Services Company (OSSC), an affiliate of Kuwait Petroleum Corporation (KPC), is at 98 percent, the highest rate in the oil sector. The company denied news in the media that the company had recently fired 140 Kuwaiti security men who were working as part of the shore security unit.
The Civil Aviation Authority said that the number of flights from and to Kuwait International Airport during July increased to 9,288 flights, a 25 percent jump when compared to the same month of last year. Commercial flights also jumped to 7,723 flights, a 39 percent increase, and passengers' traffic reached 26 percent, along with air shipping, 7 percent, while non-commercial flights declined 17 percent. In addition, the number of passengers, during the last month, reached 901,812 passengers when comparedto the same period last year of 718, 093 passengers.
In continuation of Global Investment House coverage on the MENA region we have come out during the week with the following reports: In United Arab Emirates - An Investment Update report on Arabtec Holding. Arabtec Holding had performed well over the past few years and has grown at a rapid pace. However, with significant slowdown in the real estate and construction sector, we expect the growth rate to slow down considerably from 2009 onwards. We estimate the top line of Arabtec to decline in 2009 and post a modest growth rate from 2010 onwards.
Dubai, which is the main market Arabtec, has witnessed a slew of project cancellations and delays. Even though Arabtec has started to increase its reliance on other markets like Saudi Arabia, Qatar, Abu Dhabi and also outside of GCC, it will be difficult for the company to compensate for the project cancellations in Dubai. Arabtec has estimated that more than 50 per cent of its revenues will come from outside Dubai over the next three years.
The company's management has reported the total order backlog of AED28bn at the end of 1H-2009. This however includes Okhta Centre project in Saint Petersburg, Russia worth AED10bn, which has not witnessed any significant progress. Excluding Okhta Centre project, the biggest project currently executed by Arabtec is Al Wa'ab city project in Qatar. Over the past months, Arabtec has won projects like National Towers project in Abu Dhabi and Princess Noora University project and Lamar Towers in Saudi Arabia.
It is becoming apparent that Arabtec is increasingly focusing on markets outside Dubai to counter the slowdown in its home turf. The value of Arabtec's shares derived from the weighted average of the DCF and peer comparison methods is AED4.15 per share. The stock currently trades at AED2.91 (as on 5th Aug 2009), which implies that the weighted average value of Arabtec's shares is at a premium of 42.6% to the share's current market price. We, therefore, recommend a 'BUY' on the Arabtec stock, at its prevailing price levels.
In United Arab Emirates - Abu Dhabi National Energy Company (TAQA) reported a total revenue of AED8.6bn in H1-2009 which was almost at the same level in H1-2008. This has been achieved despite the lower relative pricing environment and currency effects. Revenue from the electricity and water business, excluding supplemental fuel, increased by 14.4% to AED2.9bn. Supplemental fuel revenues were AED2.0bn in H1-2009, compared with AED1.4bn in H1-2008. Revenue from oil and gas activities (including gas storage and other revenue) declined by 21.9% to AED3.6bn, compared with AED4.6bn for the same period in 2008, as a result of lower net realized oil and gas prices and devaluation of CAD and EUR against AED, partly offset by revenue from Northern North Sea assets acquired in December 2008. Gross Profit was AED2.3bn for H1-2009 as compared to gross profit of AED3.8bn in the same period in 2008. For the first-half, finance costs were remained almost flat, on y-o-y basis, at AED1.9bn. Net profit, after minority interests, was AED176mn in H1-2009 compared with AED869mn in the same period of 2008.
In Qatar - An initial coverage report on Qatar General Insurance & Reinsurance Company. Qatar General Insurance and Reinsurance Company has reported two year CAGR (2006-2008) of 9%, 31% and 94% in Gross Written Premiums, Net underwriting revenue and net income respectively. The company has impressed on the GWP growth considering the market dynamics of the country.
At the CMP of QR54 the stock trades at 10.1x and 1.1x FY09E P/E and P/BV and 8.0x and 1.0x FY10E P/E and P/BV. Using the Embedded Value Method and Price to book method we arrive at a price target of QR64.3 indicating a premium of 19.0% to the current market price. We recommend a "BUY" on the stock.
In Egypt - A Result Update on Egyptian Gulf Bank. The Egyptian Gulf Bank showed in its H1 2009 results a slight increase of 1.9% in its deposits balances, reaching LE4.34bn, compared to LE4.26bn in FY 2008. The world financial crisis and the resulting slow down in economy influenced the Bank's lending activity, as the loan books declined from LE3.29bn in December 2008 to LE3.19bn in June 2009, a 2.9% decrease.
EGBE reported a net profit of LE50.7mn in June 2009, implying a 27.5% Y-o-Y slump. It is worth mentioning that the net profit of Q2 2009 declined by 10.3% compared to the first quarter of 2009. The acceleration witnessed in the fertilizers prices during the first half of 2008 has reversed its upward trend in the first half of 2009 to settle down at very low prices, on the back of the world's financial crisis, where the average phosphate fertilizers price plummeted by around 66% since the beginning of 2009.
Moreover, the waning demand on phosphate fertilizers, in both the local and export markets, has negatively impacted the sales volume during the first half of 2009. Consequently, the Egyptian Financial and Industrial Company's (EFIC) consolidated sales value dropped by 51.6% in H1 2009, reaching LE256.3mn, compared to LE529.3mn in H1 2008.
The world financial crisis and the resulting slow down in economy influenced the Bank's lending activity, as the loan books declined from LE3.29bn in December 2008 to LE3.19bn in June 2009, a 2.9% decrease. EFIC's consolidated net profit plunged by 78.2% in H1 2009, reaching LE43.1mn compared to LE198.2mn in H1 2008. This came on the back of the drop in the sales value, the increase in the COGS/Sales ratio, along with a 132.3% surge in the interest expense.
Harshly influenced by the world financial crisis, the net income of Sidi Kerir Petrochemicals Company SIDPEC) in H1 2009 plunged by 47.7%, reaching LE310.4mn, compared to LE593.5mn in H1 2008. However, on a Q-o-Q basis, the Company was able to realize a 21.7% incline in its net profit in Q2 2009, where it amounted to LE170.4mn, as opposed to LE140.0mn in the previous quarter.
The Company's sales volumes of ethylene are considered somehow stable, as they declined slightly by 0.1% in H1 2009, compared to H1 2008. Also, Q2 2009 ethylene sales had a minimal decrease of 0.3%, as opposed to Q1 2009. As for the local sales of polyethylene, in terms of volumes, they inclined by 20.2% Y-o-Y in H1 2009 and by 8.6% Q-o-Q in Q2 2009. On the other hand, the exported tons of polyethylene dropped by 29.2% in H1 2009 on a yearly basis and by 18.4% in Q2 2009 on a quarterly basis.
Revenues accelerated by 14.0% in the second quarter of 2009, reaching LE400.4mn, compared to LE351.3mn in Q1 2009. This is mainly attributed to the rise of the ethylene and polyethylene prices. The performance of GCC markets were mixed during July-09. Two of the markets - Kuwait and Bahrain ended the month on a negative note whereas rest of the four markets witnessed gains during the July-09. In fact most of the markets declined during the first half of July-09; however performance turned positive during the second half of the month.
Improvement in investors' sentiment in international markets on the back of better-than expected 2Q-2009 results had a positive impact on the regional markets as well. Most of the international companies in banking and financial services sector beat the analysts' estimates in terms of 2Q-2009 results.
The report includes all seven GCC Stock Market Indices, Levant, North Africa, NYMEX Crude Oil, and major International Indices with a brief technical overview up till the month ending in July 2009. The report highlights: Trend Status, Resistance, Support, Highest and Lowest level expected for the coming month for each Index & Product.
Kuwait Stock Exchange
Agility has announced the launch of its new Container Freight Station (CFS), a major new consolidation and redistribution service, from its hub in Dubai. This new service will be offered to all shippers and consignees who have shipment of less than a container load (LCL). By creating this hub, it can now consolidate the cargoes originating from various world ports and redistribute them throughout the Gulf and Africa. Al-Ahli Bank of Kuwait it has obtained an approval from the central bank to increase its c
apital by 25 percent.
The Kuwaiti lender will hike its capital by issuing new shares at KD0.100 each plus a premium of KD0.250. Zain said it was not aware of talks between shareholders and an Asian group after a newspaper reported stake sale negotiations. The newspaper's report said that the biggest shareholders in Zain were in discussions with an Asian telecoms firm to sell a more than 40 percent stake in the firm.
Investment firm Kuwait Projects Company said it has completed a merger between its pay-TV channel unit Showtime Arabia and the Orbit Group, and is effective from 31 July. The firm announced the merger deal in July without giving its value.
Kuwait has prohibited imports of milk from China and has lifted importation of beef from Ethiopia. The Recommendations includes the enforcement of a ban on imports and trade in Chinese milk and dairy. The Committee of Kuwait Municipality lifted a ban on the imports of beef from Ethiopia and recommended extension of a previous grace period, that had expired on July 21, for dealers in live chicken for another year to adhere to the authorities' health and technical standards.
In Global Investment House "Global's" technical analysis on Kuwait Stock Exchange Price Index, has corrected from the high reached at 8,438.60 point on June 06, recording 7,343.40 point on July 13, slightly below the 7,400 point (50% level of the Fibonacci retracement from 8,438.60 point-6,367.60 point). Since then, the Index has been moving sideways, trying to break the medium-term (11 weeks) moving average, which is located at 7,780 point. However, the Index's price managed to cross over the aforementioned resistance level and ended its last trading session at 7,920.80 point.
From the graph beneath, we can see that the Index's price is still moving in a bullish trend, and only below the 7,343.40 point will change the picture and the 7,000 point-6,700 point range will be the next target. However, crossing over the 8,100 point level will lead to a break above the 8,438.60 point resistance level and then to the 8,562 point (23.6% level of the Fibonacci retracement from 15,667.80 point-6,367.60 point) before heading to the psychological level at 9,000 point. In addition, long-term investors (50 weeks) can enter the market when the price closes above the 8,750 point. "RSI" indicator and "MACD" are giving bullish signals. Regarding the nearby supports, the first one occurs, as we have mentioned above, at 7,780 point, whereas the second one comes at 7,580 point.
KUWAIT: Kuwait Stock Exchange (KSE) ended the week up supported by significant increased in trading activity led by increased demand on leading market stocks. As measured by Global's weighted General Index, KSE was up by 1.45 percent at the end of the week and closed at 217.89 points. On year-to-date basis, the index is up by 5.56 percent. On the other hand, Kuwait Stock Exchange (KSE) price index was up for the week, rising 172.50 points (2.23 percent) as it closed at 7,920.80 points. The market capitalization reached KD35.39bn. Market breadth skewed towards decliners as out of 170 shares traded, 74 shares closed at lower prices, against 70 stocks advanced.
Trading activity was higher compared to the week before. Total trading volume on the exchange was down by 112.49 percent, with 2.12bn shares changing hands at a total value of KD690.62mn (an increase of 139.94 percent from last week's value). High volume was seen on the Investment stocks with the sector accounting for 31.80 percent of the total traded volume this week with 673.64mn shares traded.
International Financial Advisors was the volume leader in the sector and topped the volume list for the week with 262.82mn shares traded, accounting for 12.41 percent of the total traded volume. The scrip ended the week up by 2.70 percent at KD0.152. The Services sector topped the value list with KD386.96mn traded on the sector, accounting for 56.03 percent of the total market traded value.
Intense trading on the biggest Kuwaiti listed company, Zain cause the high figure. Zain topped the value list and was up by 4.76 percent at the end of the week with KD280.11 traded value, it's share price closed at KD1.320, causing a huge support to the market index. Agility was the second in the service sector and in the market with KD57.93mn traded value. Market sectors' performance continued to be positive this week, with 5 sectors ended the week in the positive territory, and the two in the negative side, while one sector ended unchanged.
Global Food Index was the biggest gainer, adding 29.04 percent from its value. Kuwait Food Company (Americana) were the top gainers in both the sector and the market, adding 40.32% and closed at KD1.740. Global Industrial Index followed, after adding 7.52 percent of its value. Gulf Rocks Company was significantly up by 39.13 percent.
The scrip closed at KD0.320. The Services Index was the third biggest gainer, adding 3.06 percent. On the other hand, Banking Index was the biggest loser, shedding 3.09 percent from its value. The Gulf Bank Burgan Bank, and National Bank of Kuwait affected the sector loosing 5.88 percent, 5.06 percent, 4.84 percent and closed at KD0.320, KD0.375, and KD1.180 respectively. Real Estate Index followed, after a drop of 0.25 percent from its value.
Looking at Global's special indices, all ended on a negative note. Global Small Cap. (Low 10) Index was the biggest loser, down by 14.69 percent, while Global Sharia'a compliant Islamic Index was closed down by 2.15 percent. On the other hand, Global Large Cap. (Large 10) lost 0.60 percent to its value.
Money supply (M2) in Gulf economies continues to be a concern with most of the six nations experiencing contractions in June, the most recent period for which data is available. Money supply fell in June in Bahrain and Kuwait by 0.4 and 0.1 percent month-onmonth, respectively. It increased by one per cent in Saudi Arabia and by 0.5 percent in the UAE during the same period. At the same time, bank assets declined in Kuwait by 1 percent. Kuwait's Central Bank said it would issue KD100mn (US$347.6mn) of one-year treasury bonds on August 12 with a coupon rate of 1.5 percent. Bids for the bonds amounted to KD250mn. Kuwait's Central Bank has been increasing the number of bond issues this year to absorb excess liquidity.
An oil price of US$70 to US$90 a barrel in 2010 would be acceptable to Kuwait given the state of global finance, Imad al-Atiqi, a member of Kuwait's Supreme Oil Council said. Al-Atiqi said a price above US$100 was detrimental to the interests of oil producers in the long-term. High prices encourage development of alternative energy sources that reduces long-term demand for oil, he added.
China's Sinopec Group said its planned US$9bn refinery with Kuwait would be built in Zhanjiang city in the southern province of Guangdong.
The project will be completed in 2013, and the partners hoped to win Beijing's final approval within months. The two sides will start feasibility studies for the new site and an evaluation report on environmental impact. The refinery is expected to produce 300,000 barrels-per-day and one million tonne-per-year ethylene complex that produces plastics and chemical fibre. (Source: Reuters)
Kuwait has lowered the official selling price (OSP) for its crude oil sales to Asian buyers for September by US$1.50 a barrel to US$1.50 a barrel below the average of Oman/Dubai quotes, a trader said. Kuwait set its OSP at parity to the Oman/Dubai average for August loading, and the September price was as expected.
Authority for Housing Welfare (PAHW) was currently studying a proposal to establish private companies that will make study plans and execute housing projects in Kuwait.
The proposal will suggest the establishment of more than one company, and each will be responsible for planning the construction of a whole residential area. The plan is similar to a previous law which established companies to construct low-cost housing developments.
The government has no intention to further delay the enactment of the new private sector labor law, since it has approved the law, in principle, said Minister of Social Affairs and Labor Dr Mohammad Al-Afasi. The recent announcement of the Minister has generated positive reactions from political figures and the public, in general. A US court has extended a temporary freeze on the assets of a Kuwaiti businessman, Hazem Khalid Al Braikan, after being accused of planting false stories about takeovers of US companies. Also named in the asset freeze order were KIPCO Asset Management, United Gulf Bank; and Al Raya Investment. The rate of national employment at the Oil Sector Services Company (OSSC), an affiliate of Kuwait Petroleum Corporation (KPC), is at 98 percent, the highest rate in the oil sector. The company denied news in the media that the company had recently fired 140 Kuwaiti security men who were working as part of the shore security unit.
The Civil Aviation Authority said that the number of flights from and to Kuwait International Airport during July increased to 9,288 flights, a 25 percent jump when compared to the same month of last year. Commercial flights also jumped to 7,723 flights, a 39 percent increase, and passengers' traffic reached 26 percent, along with air shipping, 7 percent, while non-commercial flights declined 17 percent. In addition, the number of passengers, during the last month, reached 901,812 passengers when comparedto the same period last year of 718, 093 passengers.
In continuation of Global Investment House coverage on the MENA region we have come out during the week with the following reports: In United Arab Emirates - An Investment Update report on Arabtec Holding. Arabtec Holding had performed well over the past few years and has grown at a rapid pace. However, with significant slowdown in the real estate and construction sector, we expect the growth rate to slow down considerably from 2009 onwards. We estimate the top line of Arabtec to decline in 2009 and post a modest growth rate from 2010 onwards.
Dubai, which is the main market Arabtec, has witnessed a slew of project cancellations and delays. Even though Arabtec has started to increase its reliance on other markets like Saudi Arabia, Qatar, Abu Dhabi and also outside of GCC, it will be difficult for the company to compensate for the project cancellations in Dubai. Arabtec has estimated that more than 50 per cent of its revenues will come from outside Dubai over the next three years.
The company's management has reported the total order backlog of AED28bn at the end of 1H-2009. This however includes Okhta Centre project in Saint Petersburg, Russia worth AED10bn, which has not witnessed any significant progress. Excluding Okhta Centre project, the biggest project currently executed by Arabtec is Al Wa'ab city project in Qatar. Over the past months, Arabtec has won projects like National Towers project in Abu Dhabi and Princess Noora University project and Lamar Towers in Saudi Arabia.
It is becoming apparent that Arabtec is increasingly focusing on markets outside Dubai to counter the slowdown in its home turf. The value of Arabtec's shares derived from the weighted average of the DCF and peer comparison methods is AED4.15 per share. The stock currently trades at AED2.91 (as on 5th Aug 2009), which implies that the weighted average value of Arabtec's shares is at a premium of 42.6% to the share's current market price. We, therefore, recommend a 'BUY' on the Arabtec stock, at its prevailing price levels.
In United Arab Emirates - Abu Dhabi National Energy Company (TAQA) reported a total revenue of AED8.6bn in H1-2009 which was almost at the same level in H1-2008. This has been achieved despite the lower relative pricing environment and currency effects. Revenue from the electricity and water business, excluding supplemental fuel, increased by 14.4% to AED2.9bn. Supplemental fuel revenues were AED2.0bn in H1-2009, compared with AED1.4bn in H1-2008. Revenue from oil and gas activities (including gas storage and other revenue) declined by 21.9% to AED3.6bn, compared with AED4.6bn for the same period in 2008, as a result of lower net realized oil and gas prices and devaluation of CAD and EUR against AED, partly offset by revenue from Northern North Sea assets acquired in December 2008. Gross Profit was AED2.3bn for H1-2009 as compared to gross profit of AED3.8bn in the same period in 2008. For the first-half, finance costs were remained almost flat, on y-o-y basis, at AED1.9bn. Net profit, after minority interests, was AED176mn in H1-2009 compared with AED869mn in the same period of 2008.
In Qatar - An initial coverage report on Qatar General Insurance & Reinsurance Company. Qatar General Insurance and Reinsurance Company has reported two year CAGR (2006-2008) of 9%, 31% and 94% in Gross Written Premiums, Net underwriting revenue and net income respectively. The company has impressed on the GWP growth considering the market dynamics of the country.
At the CMP of QR54 the stock trades at 10.1x and 1.1x FY09E P/E and P/BV and 8.0x and 1.0x FY10E P/E and P/BV. Using the Embedded Value Method and Price to book method we arrive at a price target of QR64.3 indicating a premium of 19.0% to the current market price. We recommend a "BUY" on the stock.
In Egypt - A Result Update on Egyptian Gulf Bank. The Egyptian Gulf Bank showed in its H1 2009 results a slight increase of 1.9% in its deposits balances, reaching LE4.34bn, compared to LE4.26bn in FY 2008. The world financial crisis and the resulting slow down in economy influenced the Bank's lending activity, as the loan books declined from LE3.29bn in December 2008 to LE3.19bn in June 2009, a 2.9% decrease.
EGBE reported a net profit of LE50.7mn in June 2009, implying a 27.5% Y-o-Y slump. It is worth mentioning that the net profit of Q2 2009 declined by 10.3% compared to the first quarter of 2009. The acceleration witnessed in the fertilizers prices during the first half of 2008 has reversed its upward trend in the first half of 2009 to settle down at very low prices, on the back of the world's financial crisis, where the average phosphate fertilizers price plummeted by around 66% since the beginning of 2009.
Moreover, the waning demand on phosphate fertilizers, in both the local and export markets, has negatively impacted the sales volume during the first half of 2009. Consequently, the Egyptian Financial and Industrial Company's (EFIC) consolidated sales value dropped by 51.6% in H1 2009, reaching LE256.3mn, compared to LE529.3mn in H1 2008.
The world financial crisis and the resulting slow down in economy influenced the Bank's lending activity, as the loan books declined from LE3.29bn in December 2008 to LE3.19bn in June 2009, a 2.9% decrease. EFIC's consolidated net profit plunged by 78.2% in H1 2009, reaching LE43.1mn compared to LE198.2mn in H1 2008. This came on the back of the drop in the sales value, the increase in the COGS/Sales ratio, along with a 132.3% surge in the interest expense.
Harshly influenced by the world financial crisis, the net income of Sidi Kerir Petrochemicals Company SIDPEC) in H1 2009 plunged by 47.7%, reaching LE310.4mn, compared to LE593.5mn in H1 2008. However, on a Q-o-Q basis, the Company was able to realize a 21.7% incline in its net profit in Q2 2009, where it amounted to LE170.4mn, as opposed to LE140.0mn in the previous quarter.
The Company's sales volumes of ethylene are considered somehow stable, as they declined slightly by 0.1% in H1 2009, compared to H1 2008. Also, Q2 2009 ethylene sales had a minimal decrease of 0.3%, as opposed to Q1 2009. As for the local sales of polyethylene, in terms of volumes, they inclined by 20.2% Y-o-Y in H1 2009 and by 8.6% Q-o-Q in Q2 2009. On the other hand, the exported tons of polyethylene dropped by 29.2% in H1 2009 on a yearly basis and by 18.4% in Q2 2009 on a quarterly basis.
Revenues accelerated by 14.0% in the second quarter of 2009, reaching LE400.4mn, compared to LE351.3mn in Q1 2009. This is mainly attributed to the rise of the ethylene and polyethylene prices. The performance of GCC markets were mixed during July-09. Two of the markets - Kuwait and Bahrain ended the month on a negative note whereas rest of the four markets witnessed gains during the July-09. In fact most of the markets declined during the first half of July-09; however performance turned positive during the second half of the month.
Improvement in investors' sentiment in international markets on the back of better-than expected 2Q-2009 results had a positive impact on the regional markets as well. Most of the international companies in banking and financial services sector beat the analysts' estimates in terms of 2Q-2009 results.
The report includes all seven GCC Stock Market Indices, Levant, North Africa, NYMEX Crude Oil, and major International Indices with a brief technical overview up till the month ending in July 2009. The report highlights: Trend Status, Resistance, Support, Highest and Lowest level expected for the coming month for each Index & Product.
Kuwait Stock Exchange
Agility has announced the launch of its new Container Freight Station (CFS), a major new consolidation and redistribution service, from its hub in Dubai. This new service will be offered to all shippers and consignees who have shipment of less than a container load (LCL). By creating this hub, it can now consolidate the cargoes originating from various world ports and redistribute them throughout the Gulf and Africa. Al-Ahli Bank of Kuwait it has obtained an approval from the central bank to increase its c
apital by 25 percent.
The Kuwaiti lender will hike its capital by issuing new shares at KD0.100 each plus a premium of KD0.250. Zain said it was not aware of talks between shareholders and an Asian group after a newspaper reported stake sale negotiations. The newspaper's report said that the biggest shareholders in Zain were in discussions with an Asian telecoms firm to sell a more than 40 percent stake in the firm.
Investment firm Kuwait Projects Company said it has completed a merger between its pay-TV channel unit Showtime Arabia and the Orbit Group, and is effective from 31 July. The firm announced the merger deal in July without giving its value.
Kuwait has prohibited imports of milk from China and has lifted importation of beef from Ethiopia. The Recommendations includes the enforcement of a ban on imports and trade in Chinese milk and dairy. The Committee of Kuwait Municipality lifted a ban on the imports of beef from Ethiopia and recommended extension of a previous grace period, that had expired on July 21, for dealers in live chicken for another year to adhere to the authorities' health and technical standards.
In Global Investment House "Global's" technical analysis on Kuwait Stock Exchange Price Index, has corrected from the high reached at 8,438.60 point on June 06, recording 7,343.40 point on July 13, slightly below the 7,400 point (50% level of the Fibonacci retracement from 8,438.60 point-6,367.60 point). Since then, the Index has been moving sideways, trying to break the medium-term (11 weeks) moving average, which is located at 7,780 point. However, the Index's price managed to cross over the aforementioned resistance level and ended its last trading session at 7,920.80 point.
From the graph beneath, we can see that the Index's price is still moving in a bullish trend, and only below the 7,343.40 point will change the picture and the 7,000 point-6,700 point range will be the next target. However, crossing over the 8,100 point level will lead to a break above the 8,438.60 point resistance level and then to the 8,562 point (23.6% level of the Fibonacci retracement from 15,667.80 point-6,367.60 point) before heading to the psychological level at 9,000 point. In addition, long-term investors (50 weeks) can enter the market when the price closes above the 8,750 point. "RSI" indicator and "MACD" are giving bullish signals. Regarding the nearby supports, the first one occurs, as we have mentioned above, at 7,780 point, whereas the second one comes at 7,580 point.
© Kuwait Times 2009
