UAE morning meeting notes
UAE morning meeting notes
26th May 2009
Market Statistics
DFM top 5 traded by value on:
Equity investment analysis
On the U.A.E. stock markets
MAC CAPITAL ADVISORS CONTACTS
RESEARCH
Head: Research
Ian Munro
Email: ian@maccapitaladvisors.com
Tel: +971 4 409 7140
Head: Sales
Nour Al Zoubi
Email: nour@mac-sharaf.com
Tel: +971 4 4097110
Head: Institutional Sales
Ron Garcha
Email: ron@mac-sharaf.com
Tel: +971 4 4097121
Senior Equity Sales
Amjad Bakir
Email: amjad@mac-sharaf.com
Tel: +971 4 4097117
Senior Equity Sales
Samer M. Hammad
Email: samer@mac-sharaf.com
Tel: +971 4 409 7119
•
•
25-May-09
Value
Close
Prior
Ch
(mln)
(AED)
(AED)
Mkt Cap
EMAAR
333.7
2.88
2.95
-2.37
ARTC
181.6
2.60
2.68
-2.99
847
DFM
99.0
1.37
1.42
-3.52
2,984
DIC
41.6
1.19
1.20
-0.83
1,187
AIRARABIA
30.0
0.98
0.97
1.03
1,245
(%)
(US$ mln)
4,777
Source: DFM, Bloomberg
ADX top 5 traded by value on:
Equity Investment Analyst – Technical
Shiv Prakash
Email: sp@maccapitaladvisors.com
Tel: +971 4 409 7141
SALES
Stock
Stock
25-May-09
Value
Close
Prior
(mln)
(AED)
(AED)
Ch
Mkt Cap
(%)
(US$ mln)
DANA
56.4
1.07
1.09
-1.84
1,748
ALDAR
39.0
3.90
3.93
-0.76
2,738
SOROUH
21.0
2.86
2.85
0.35
1,947
TAQA
14.8
1.79
1.83
-2.19
3,034
RAKPROP
14.0
0.63
0.64
-1.56
343
Source: ADX, Bloomberg
NASDAQ Dubai top traded by value on:
Stock
DPW
25-May-09
Value
Close
Prior
('000)
(AED)
(AED)
1850.2
0.360
0.390
Ch
(%)
-7.69
Mkt Cap
(US$ mln)
5,976
Source: Bloomberg
Inside this issue:
•
•
UAE Market Update
Corporate News
•
Directors’ Dealings
•
Regional Market Update
MAC Daily Trading Ideas
Buy DFM stock- Volumes traded on the DFM have improved in recent days, driven in part by foreign
investors changing their stance to overweight DFM listed company’s. DFM stock trades at a 32% P/E
discount to its 4 year average. The exchange generates high levels of free cash flow, has a 30% share
of GCC stock volumes traded and is likely to grow earnings exponentially as long term oil prices and
GCC economic growth improves. Look to accumulate on market weakness today for short term traders,
long term investors can accumulate on any prevailing market weakness during the traditionally lower
volume Summer months. 12 month price target AED 1.83.
Buy Qatar X Pert Certificates (NASDAQ Dubai)- Qatar has strong macroeconomic fundamentals,
driven by significant gas reserves, foreign assets and a large pipeline of property investments. The
country aims to supply 30% of the world’s LNG needs by 2012. We believe this scenario would be a
large driver of fiscal/corporate earnings in Qatar, with surplus funds flowing into property,
infrastructure and overseas investments. Investors can buy DBXQA certificates on the NASDAQ Dubai,
which represent a weighted portfolio of 12 Qatar listed companies. Trading at 14%< price issue.
May 26, 2009
-1-
UAE morning meeting notes
UAE Market Update
AE Market Update
The DFMGI declined 25 points to close at 1,709. The total traded value decreased 13.0% to AED 790 mln.
AED mln
Index
DFM traded values (column) v DFMGI (line) 2009
1400
1,700
1200
1000
800
1,600
600
400
200
0
26-Apr-09
1,500
03-May-09
10-May-09
17-May-09
22-May-09
The ADI declined 3 points to close at 2,622. The total traded value decreased 48.6% to AED 211 mln.
AED mln
ADX traded values (column) v ADI (line) 2009
800
Index
2,700
600
2,600
400
2,500
200
0
26-Apr-09
2,400
03-May-09
10-May-09
17-May-09
22-May-09
Total value traded on the NASDAQ Dubai exchange was 1.91m USD. DP World is the largest company on
the NASDAQ Dubai and comprises the majority of volumes traded.
May 26, 2009
-2-
UAE morning meeting notes
Corporate News
Abu Dhabi Finance offers mortgages for Sorouh's projects
Abu Dhabi Finance and Sorouh Real Estate have announced an exclusive new mortgage product for
customers at four of the developer's projects. For a limited period, property owners at Sky Tower, Sun
Tower, Tala Tower and Golf Gardens will be able to apply for a specially-developed mortgage which includes
discounted interest rates starting at 7.24% along with no application or processing fees.
NBAD inaugurates Abu Dhabi National Islamic Finance (ADNIF)
H.E. Nasser Ahmed Khalifa AlSowaidi, Chairman of National Bank of Abu Dhabi (NBAD), officially
inaugurated Abu Dhabi National Islamic Finance (ADNIF) which would be the Islamic finance and banking
arm of NBAD. Islamic Banking and financial services would be provided through the Islamic Banking division
of NBAD and Abu Dhabi National Islamic Finance (ADNIF) complementing each other under brand ADNIF.
ADNIF has projected its investment portfolio to grow to AED 3.2b by the year-end.
Aldar sees under supply in affordable housing
John Bullough, chief executive of Aldar Properties said that there's an over supply in high-end real estate
segment and an under supply in the affordable housing segment. He added that Aldar is focusing on
working with the government on projects and is reviewing a number of their existing projects to create
more affordable housing and move away from the high-end (property) focus.
flydubai gets green light for take off
A new era for budget air travel within the region took a big step closer to realization when flydubai, received
its Air Operators Certificate (AOC) from the General Civil Aviation Authority (GCAA). flydubai is Dubai's first
low-cost airline. Ghaith Al Ghaith, CEO of flydubai said that the award of the operator's certificate is the
green light for flydubai to start its commercial operations.
Adnoc invites bids for 4 Shah sour gas packages
Abu Dhabi National Oil Co. (Adnoc) and ConocoPhillips (COP) have invited bids for four contracts on the
estimated US$ 10b Shah sour gas field development, which is set to help Abu Dhabi meet rising gas
demand. Adnoc's chief executive said that the contracts are part of plans to award energy deals worth
between US$ 35b-50b in 2009 and 2010.
Taqa buys back another 5.17m shares
Abu Dhabi National Energy Co. (Taqa) bought back 5,175,023 shares. The latest buyback brings the total to
121,893,587 shares that Taqa has bought back since it received the approval of the Securities and
Commodities Authority in February 2009.
Taqa to expand power plant in Morocco
The Office National de L’Electricite (ONE) of Morocco and Taqa has signed a strategic partnership to extend
the capacity of the Jorf Lasfar Energy Company (JLEC) by two new units of at least 350 MW each. JLEC will
build, own, and operate the new units 5 and 6 under a 30-year power purchase agreement.
Salwan leases 5,600 Al Khail Gate units
Salwan LLC, a subsidiary of Dubai Properties Group (DPG), announced that it has commenced leasing of
5,600 units at phase-II of the Al Khail Gate community. Saeed Bushalat, CEO of Salwan, said that within a
May 26, 2009
-3-
UAE morning meeting notes
year, their portfolio has grown to 18,000 units and they are planning to bring an additional 8,000 properties
for leasing by this year-end.
Global takes NBQ to court for US$ 250m
Global Investment House has moved court against National Bank of Umm Al Quwain (NBQ) seeking
recovery of a deposit the former placed with NBQ. Global stated in a document that NBQ has failed to
refund a deposit worth US$ 250m (AED 917m), which it says it placed with the bank as an advance on a
transaction between the two.
UAE TRA chief outlines strategy for future revenue streams
Mohammed Al Ghanim, Director General of the UAE Telecommunications Regulatory Authority (TRA), said
that if additional revenue streams are to be opened up with mobile phone penetration approaching
saturation levels, regional operators should further develop multimedia, mobile commerce and capitalize on
advertising revenue. TV broadcasts to mobile handsets and fixed line services such as video on demand
were potential development areas. Al Ghanim added that fixed and mobile voice and data services maybe
major revenue segments, but the key to future growth is next generation of broadband as well as
integrating the parallel stream of wire-line and wireless technologies.
Plan for 100% ownership
Abu Dhabi is considering allowing 100% foreign ownership of some projects in the emirate. Nasser Ahmed
Al Suwaidi, the chairman of the Department of Economic Development, said that they are strongly inclined
to grant 100% ownership to foreigners in new and old industries as well as other projects. The percentage
might be less in other sectors according to the emirate's needs. Ownership covers projects and not land.
However, no final decision to this effect had been made in Abu Dhabi and the new company law was being
reconsidered.
Abu Dhabi aims to attract 2.3m hotel guests by 2012
The Abu Dhabi government aims to attract 2.3m hotel guests by 2012 as the emirate aims to build up its
tourism sector in a bid to diversify its economy. Sultan bin Tahnoon al Nahyan said that they plan to sustain
last year's performance when Abu Dhabi received 1.5m hotel guests. He added that for 2010 Abu Dhabi
aims to achieve a 10% rise in hotel guests and a 15% increase in both 2011 and 2012.
Islamic Bonds worth US$ 27.5b to be issued in 2009, says Ernst & Young
Although Islamic investment funds face bigger risks this year due to the global economic crisis, new issues
of Islamic bonds, or sukuks, are likely to rise by 56% from last year, according to financial services firm
Ernst & Young. Worldwide sukuk issuance slowed last year as spreads widened, with issuances of US$ 15.5b
in 2008 down sharply from the US$ 47.1b in sukuks issued in 2007. Shariah-compliant investment assets
grew nearly three-fold to US$ 736b in 2008 from US$ 267b in the previous year. The average Islamic fixedincome fund return dropped from 3% in 2007 to 1% in 2008 and in the first quarter this year.
May 26, 2009
-4-
UAE morning meeting notes
Directors’ Dealings
There are many reasons why a director will sell shares (eg. to buy a new car, a new house, etc.).
However, a director who buys shares is doing so because he believes in the company and that
the share price is cheap
Directors’ dealings:
DFM directors’ dealings yesterday
There were no directors’ dealings on DFM yesterday
ADX directors’ dealings yesterday
Insider sold METHAQ (Methaq Takaful Insurance) 240,173 shares at price of 5.17,
estimated average value AED 1,241,694.
Insider bought DANA (Dana Gas) 600,000 shares at price of 1.06-1.07, estimated
average value AED 639,000.
NASDAQ Dubai directors’ dealings yesterday
There were no directors’ dealings on NASDAQ Dubai yesterday
Company Share buy-backs:
DFM Company Share buy-backs yesterday
There were no share buy-backs on DFM yesterday
ADX Company Share buy-backs yesterday
Bought TAQA (AD National Energy) 4,000,000 shares at price of 1.77-1.80, estimated
average value AED 7,140,000.
NASDAQ Dubai Company Share buy-backs yesterday
There were no share buy-backs on NASDAQ Dubai yesterday
Outstanding Company Share buy-backs:
DFM outstanding Company Share buy-backs
Aramex (ARMX)
Gulf Navigations Holdings (GULFNAV)
ADX outstanding Company Share buy-backs
First Gulf Bank (FGB)
AD National Energy (TAQA)
NASDAQ Dubai outstanding Company Share buy-backs
Depa Limited (DEPA)
May 26, 2009
-5-
UAE morning meeting notes
Regional Market Update
GCC - MARKET SNAPSHOT
MAJOR GAINERS AND LOSERS
Source: Bloomberg, Gulfbase
Index
DFM
ADX
NDI
TASI
BSE
KSE
MSM
DSM
Close
1709.8
2622.5
1437.9
5914.2
1630.0
7884.7
5551.6
6743.0
Daily
-1.4%
-0.1%
0.1%
-2.3%
-0.1%
0.3%
0.1%
-0.6%
WTD
6.5%
3.8%
11.1%
5.1%
2.1%
4.3%
8.2%
20.3%
MTD
6.5%
3.8%
11.1%
5.1%
2.1%
4.3%
8.2%
20.3%
YTD
4.5%
9.7%
15.2%
23.1%
-9.7%
1.3%
2.0%
-2.1%
Kuwait Stock Exchange
Stock
NCCI.KSE
ALAMAN
PCEM
SANAM
COAST
Close
Ch
(KWD)
(%)
110.00
10.00
114.00
9.61
570.00
9.61
146.00
7.35
104.00
7.21
Stock
TIJARA
JAZEERA
ABRAJ
GLOBAL
IKARUS
Close
Ch
(KWD)
(%)
70.00
-6.66
300.00
-6.25
80.00
-5.88
128.00
-5.88
108.00
-5.26
Bahrain Stock Exchange
30%
Y T D P e rf o rm a nc e o f G C C m a rk e t s
Stock
22%
ITHMR*
ABC*
DUTYF
14%
6%
Close
Ch
(QAR)
(%)
0.26
4.08
0.60
1.69
0.85
1.19
Stock
GFH*
CINEMA
ESTERAD
Close
Ch
(QAR)
(%)
1.04
-3.70
0.86
-3.37
0.35
-1.42
Close
Ch
(QAR)
(%)
1.10
-12.00
0.44
-2.00
0.62
-1.28
0.65
-1.22
Close
Ch
(QAR)
(%)
31.20
-4.87
17.00
-3.95
10.50
-3.66
27.90
-3.12
35.00
-3.04
Close
Ch
* Prices in US$
-2%
DFM ADX NDI TASI BSE KSE MSM DSM
-10%
-18%
Muscat Stock Exchange
Stock
OMPS
MTMI
NAPI
OIFC
NSCI
Close
Ch
(QAR)
(%)
0.99
11.42
0.15
10.37
0.28
8.26
0.25
7.82
0.10
7.77
Stock
OSCI
VOES
GECS
RNSS
Doha Stock Exchange
Stock
QISI
ZHCD
QIMD
AKHI
QATI
Close
Ch
(QAR)
(%)
32.50
7.26
46.50
3.33
40.30
3.33
32.50
1.88
54.00
1.50
Stock
QSHS
DBIS
QGMD
AHCS
UDCD
Tadawul Stock Exchange
Stock
May 26, 2009
Close
Ch
(SAR)
(%)
SFICO
TAACO
DARALARKAN
SRMG
59.00
9.76
29.60
3.13
26.80
3.07
32.90
2.49
SAGRINSURANCE
51.00
2.20
-6-
Stock
SALAMA
GUCIC
TRADEUNION
SIIC
AL-AHLIA
(SAR)
(%)
63.00
-10.00
26.10
-10.00
23.50
-9.96
52.00
-9.95
52.25
-9.91
UAE morning meeting notes
8.77
MAC CAPITAL ADVISORS LIMITED- DISCLAIMER
Potential Conflicts
1. MAC Capital Advisors Limited (“MAC”) and/or its affiliate(s) hold or own or control 1% or more of the issued share capital of this company. 2. The issuer holds or owns or
controls a material amount of the issued share capital of MAC. 3. MAC and/or its affiliate(s) are or may regularly be doing proprietary trading in equity securities of this company.
4. MAC and/or its affiliate(s) have been lead manager or co-lead manager in a public offering of the issuer’s financial instruments during the last twelve months. 5. MAC and/or its
affiliate(s) are a market maker in the issuer’s financial instruments. 6. MAC and/or its affiliate(s) are a liquidity provider for the issuer to provide liquidity in such instruments. 7.
MAC and/or its affiliate(s) act as a corporate broker or as a sponsor or a sponsor specialist (in accordance with the local regulations) to this company. 8. MAC and/or its
affiliate(s) and the issuer have agreed that MAC will produce and disseminate investment research on the said issuer as a service to the issuer. 9. MAC and/or its affiliate(s) have
received compensation from this company for the provision of investment banking or financial advisory services within the previous twelve months. 10. MAC and/or its affiliate(s)
may expect to receive or intend to seek compensation for investment banking services from this company in the next three months. 11. The author of or an individual who
assisted in the preparation of this report (or a close relative), or a person who although not involved in the preparation of the report had or could reasonably be expected to have
access to the substance of the report prior to its dissemination has a direct ownership position in securities issued by this company. 12. An employee of MAC and/or its affiliate(s)
serves on the board of directors of this company.
Rating Ratio MAC Q2 2009
Rating breakdown
Overweight
Equalweight
Underweight
Not Rated/Under Review/Accept Offer
Total
A
B
C
75%
0%
25%
0%
100%
0%
0%
0%
100%
100%
0%
0%
0%
100%
100%
Source: MAC
A: % of all research recommendations
B: % of research recommendations for this sector
C: % of issuers to which Investment Banking Services are supplied
Recommendation Structure:
All stock prices are stated as of the market close on the previous day. Our recommendations are based on absolute upside (if positive) or downside (if negative) potential, which
we define as being equal to Fair Value minus Current Price. Unless otherwise specified, our recommendations are set with a 12-month horizon. Initial investment research is
from January 2008. MAC’s rating system consists of three recommendations: OVERWEIGHT, EQUALWEIGHT and UNDERWEIGHT. For an OVERWEIGHT rating, the
minimum expected upside is 10% over 12 months. For an EQUALWEIGHT rating the expected upside is less than 10%. An UNDERWEIGHT rating is applied when there is
expected downside on the stock.
Analyst Certification
Any opinions, projections, forecasts or estimates in this report are those of the author only, who has acted with a high degree of expertise. They reflect only current views of the
author and are subject to change without notice. MAC has no obligation to update, modify or amend this publication or to otherwise notify a reader or recipient of this publication
in the event that any matter, opinion, projection, forecast or estimate contained herein, changes or subsequently becomes inaccurate, or if research on the subject company is
withdrawn. The analysis, opinions, projections, forecasts and estimates expressed in this report were in no way affected or influenced by the issuer. The author of this publication
benefits financially from the overall success of MAC and not from the specific recommendations or views that have been expressed in this research report. The analyst has
distinguished between opinion and fact where necessary.
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MAC is an independent research company registered in St. Lucia. It has two affiliates in UAE, MAC Capital Limited which is regulated by the Dubai Financial Services Authority,
and MAC Sharaf Securities (UAE) LLC which is regulated by the Securities and Commodities Authority.
For further information relating to research recommendation and conflict of interest management please refer to www.maccapitaladvisors.com
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The information contained in this publication was obtained from various sources believed to be reliable, but has not been independently verified by MAC.
The investments referred to in this publication may not be suitable for all recipients. Recipients are urged to base their investment decisions upon their own appropriate
investigations that they deem necessary. Any loss or other consequence arising from the use of the material contained in this publication shall be the sole and exclusive
responsibility of the investor and MAC accepts no liability for any such loss or consequence. In the event of any doubt about any investment, recipients should contact their own
investment, legal and/or tax advisers to seek advice regarding the appropriateness of investing. Some of the investments mentioned in this publication may not be readily liquid
investments. Consequently it may be difficult to sell or realize such investments. The past is not necessarily a guide to future performance of an investment. The value of
investments and the income derived from them may fall as well as rise and investors may not get back the amount invested. Some investments discussed in this publication may
have a high level of volatility. High volatility investments may experience sudden and large falls in their value which may cause losses. International investing includes risks
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To the extent permitted by applicable law, no liability whatsoever is accepted for any direct or consequential loss, damages, costs, prejudices arising from the use of this
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May 26, 2009
-7-