| Q-Tel - Qatar Telecom earnings preview |
| February 29,2012 |
| Qatar Telecom's growth story remains on track, in our view, with solid performance across most of its key subsidiaries. We increase our estimates ahead of the 4QFY11 results and raise our target price by 4% to QR195.69 from QR187.58. Maintain Buy.
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| MENA Strategy - MENA consumer markets |
| February 23,2012 |
| We believe consumer markets in the Middle East & North Africa (MENA) region have some of the brightest prospects globally. Their populations are young and growing rapidly, GDP per capita levels are high in the Gulf Cooperation Council (GCC) and offer strong growth prospects elsewhere, and governments within the GCC are focusing on boosting non-oil sectors, including tourism at the high end of the market.
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| Sorouh Real Estate - 4Q11 results review (Hold) |
| February 16,2012 |
| Sorouh reported better-than-expected results on land swap transaction and seemingly higher-than-expected construction revenues. Although the company's liquidity position doesn't look stretched, demand generation for the upcoming investment and development properties appears difficult, in our view.
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| Emaar Properties - Solid 4Q11 results |
| February 15,2012 |
| Revenue was in line with our expectation, but net income was significantly higher than our forecast, by 22%, mainly on a better-than-expected gross margin. At its AGM, we expect Emaar Properties to announce a 10% cash dividend for the year, which translates to Dh0.10 per share, in line with the dividend announced for FY10.
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| Emirates NBD - Cash generation intact (Buy) |
| February 14,2012 |
| Emirates NBD continues to generate over Dh6 billion of operating earnings annually. Although these earnings are likely to be used for improving the balance sheet in the next two years, we believe the valuation of Dh16 billion is far too cheap considering ENBD's longterm cash generating capabilities.
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| MENA Strategy - Cross currents of opportunity |
| February 13,2012 |
| Improving appetite for risky off-benchmark markets, stabilisation in Egypt and the potential for direct access to the Saudi market for foreign investors could be catalysts for a market rally, higher trading volumes and valuations in 2012. We see attractive opportunities across the GCC and are cautiously optimistic about further outperformance in Egypt.
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| Q-Tel - Qatar Telecom's capital day (Buy) |
| January 31,2012 |
| Qatar Telecom held its capital day event on 26 January 2012. The company discussed its
new 'DRIVE' strategy for the forthcoming future and addressed some of its key financial issues. Our DCF-based sum-of-the-parts valuation for Qatar Telecom is QR187.58 and we maintain our Buy recommendation.
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| Vodafone Qatar - Key takeaways from Analyst Day (Hold) |
| January 30,2012 |
| Vodafone Qatar held its analyst presentation day on 26 January 2012 where it addressed its key strategy programmes for 2012 and reviewed its 3Q12 financial results. Our TP remains unchanged at QR7.70. We maintain our Hold recommendation.
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| SABIC - Look beyond 1H12 (Buy) |
| January 25,2012 |
| We expect a relatively weak start to 2012, but expect a recovery in petrochemical demand and margins in the second half of the year. SABIC has strong leverage to improving economic growth. We believe the stock is cheap at 5.3x 2012F EV/EBITDA, and we maintain our Buy recommendation.
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| STC releases preliminary 4Q11 (Buy) |
| January 19,2012 |
| STC's preliminary 4Q11 results were broadly in line with our estimates. Growth was driven by a record Hajj season, demand for fixed and wireless broadband services and revenue
from international operations. We maintain our target price at SR47.70 and our Buy recommendation.
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| Mobily releases preliminary 4Q11 (Buy) |
| January 19,2012 |
| Mobily has released its preliminary 4Q11 results, which were in line with our estimates. Revenue from data, both fixed and mobile, was the main growth driver. We maintain our
DCF-based target price for Mobily at SR79.78, which implies an upside of 48%. We reiterate our Buy recommendation.
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| Banks - Qatar preview (Still prefer CBQ) |
| January 18,2012 |
| In 9M11, virtually all new lending went to the public sector as the economy prepared for the
award of contracts. As these projects get under way in 2012, we expect broadbased growth. We believe CBQ will be a beneficiary of these trends, with the added attraction of being
available at a discounted price.
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| Vodafone Qatar - Pre-earnings 3Q12 review (Hold) |
| January 17,2012 |
| Vodafone Qatar, the second mobile entrant to the Qatari market, remains on track in terms
of market share performance, with a 28% subscriber market share at the end of September 2011. We revise our estimates ahead of 3QFY12 results and downgrade the company to a
Hold from a Buy.
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| Telecom Egypt - Persevering through (Buy) |
| January 16,2012 |
| In light of the continued economic and political turbulence, we revise our forecasts for Telecom Egypt. We raise our discount rate from 10.5% to 14.5% in view of the political risk in the country. Hence, we cut our target price for Telecom Egypt to E£16.7, maintaining our Buy recommendation.
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| Mobinil - Concerns remain (Hold) |
| January 11,2012 |
| Mobinil was the worst performer in the region on a 12-month basis (falling 56%) as the company faced more than just competitive and economic pressure during 2011. We have raised our cost of equity to reflect the political volatility and cut our target price to E£82. Hence, we move to a Hold recommendation from Buy.
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| EIIB acquires 35% stake in Rasmala, to invest $16m |
| January 07,2012 |
| European Islamic Investment Bank, or EIIB, is to invest $16 million over 12 months in Rasmala Holdings via a financing facility convertible into shares representing about 35 per cent of the group's enlarged capital.
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| Agility - G&A expense adjustment (Buy) |
| January 03,2012 |
| We adjust our forecasts to account for higher-than-expected G&A expenses in 3Q11. As a
result, we lower our EBITDA forecasts and target price. We value Agility using an SOTP methodology arriving at a fair value of KWD0.447, with the largest contribution coming from a DCF of Agility's core operations.
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| Orascom Construction Ind - Demerger should be the catalyst (Buy) |
| December 22,2011 |
| OCI announced a string of positive news flow, but the share price remains depressed, likely
the result of the uncertain political situation. Nevertheless, we believe patient investors
should benefit from solid fundamentals in construction and fertilisers and that the
announcement of the separation of the two businesses should be a major catalyst for the
share in early 2012. We maintain a Buy recommendation.
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| MENA Fertilisers - We remain positive for 2012 |
| December 22,2011 |
| Urea prices have fallen steeply over the past few weeks, as traders have bid aggressively to sell urea to India and new spot demand has been weak. Nevertheless, we expect an improvement in 2012, with buyers returning for the winter wheat season and the approach of the spring planting season. We maintain our 2012 forecast of US$375/tonne for urea.
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| STC - Potential acquisitions in 2012 (Buy) |
| December 19,2011 |
| We believe that news of an acquisition could be potentially positive for Saudi Telecom
Company's (STC's) share price, as the company's recent growth has been mainly driven by
its foreign operations. We revise our forecasts, and maintain our target price of SR47.70 and
our Buy recommendation.
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| MENA Strategy - No upgrade, not a big surprise, but bad for sentiment |
| December 15,2011 |
| MSCI has announced that its UAE and Qatar indices will remain under review for potential upgrade to EM status. The decision comes as no big surprise to us, but it has dashed any hope, however small, of a boost to sentiment and trading volumes.
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| Rasmala Organizes the 'Dynamism of Palestinian Economy' Event with the Palestinian Business Council |
| December 10,2011 |
| Rasmala Investment Bank Ltd. ("Rasmala") along with the Palestinian Business Council and Al Arabi investment Group Co. (AB Invest - Palestine) organised a high profile event and seminar on the 'The Dynamism of the Palestinian Economy'. The event, held at the Jumeirah Etihad Towers in Abu Dhabi, was organised to highlight the dynamic nature of the Palestinian economy.
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| MENA Fertilisers -
Yara confirms our positive view |
| December 08,2011 |
| Following Yara's very bullish view on the outlook for fertilisers, we remain positive on MENA fertilisers. We reiterate our Buy recommendations on OCI and
IQ, which should benefit through their imminent start-ups of new capacities.
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| NSCSA - Expansion plans sink dividend |
| December 08,2011 |
| As the VLCC segment faces weak freight rates and high bunker fuel costs, we expect chemical carrier and RoRo segments to provide earnings stability. We believe dividend payouts are unlikely, given upcoming capital commitments.
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| Agility -
Healthcare bid announcement |
| December 07,2011 |
| Agility announced that it has entered an auction to acquire a 26% stake in Kuwait Health Assurance Company (KHAC). A winning bid could have a favourable impact on the stock's performance in the near term.
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| MENA Strategy - What next for the Egyptian pound |
| December 01,2011 |
| We believe there has been an increase in the rate of decline in CBE reserves during November, which would put further pressure on the Egyptian pound. But, Tuesday's US$1.53bn sale of US$-denominated bills gives some relief. IMF loans or other bilateral facilities would also help, but time is of the essence.
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| Dana Gas - Bond takes gas out of Dana (Buy) |
| November 25,2011 |
| Aldar reported total revenue of Dh3,133m, beating our estimate of Dh858m and consensus estimate of Dh957m. The significant jump in revenue was due to recognition of Dh2,600m from land sale to the government. We expected the gain from land sale to be recognised
directly below gross profit as in the case of the gain from transfer of Ferrai world assets in
1H11. Revenue ex-land sales of Dh533m was 38% below our estimate of Dh858m as revenue from property sales of Dh247m missed our estimate by 55% and rental income missed our estimate by 6%. SG&A expenses and finance costs were in line with our estimates. Net income of Dh144m was 4% above our estimate of Dh138m as the gross profit miss on revenue ex-land sales was more than offset by a higher-than-expected gain from land sale to the government.
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| Dana Gas - Bond takes gas out of Dana (Buy) |
| November 17,2011 |
| Dana's current receivables stand at US$191m (Dh701m) in Kurdistan and US$207m (Dh760m) in Egypt. In 9M11, Dana Gas received US$80m (Dh294m) in Kurdistan and US$48m (Dh176m) in Egypt. By comparison, in 9M10, we estimate Dana Gas was paid US$11m (Dh42m) in Kurdistan and US$148m (Dh543m) in Egypt.
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| Drake & Scull - Continue to remain constructive (Buy) |
| November 17,2011 |
| DSI reported total revenue of Dh847m (up 15% qoq and 96% yoy), beating our estimate of Dh701m by 21% and consensus estimate of Dh668m by 27%. The revenue beat was mainly due to better-than-expected execution. The company's annualised backlog to revenue conversion rate of 45% was 700bp ahead of our estimate. Gross margin moved up 30bp qoq to 14.6% after falling from 18.6% in 2010 to 14.3% in 2Q11 and was 30bp ahead of our estimate. The EBIT margin of 6.5% was also better than our estimate of 6.1%. Overall net profit of Dh58m (up 12% qoq and 89% yoy) beat both our forecast and consensus estimate of Dh49m by 18%.
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| Orascom Construction Ind - 3Q11 results due 21 November (Buy) |
| November 16,2011 |
| OCI will report 3Q11 results on Monday, 21 November. We expect another strong quarter, with EBITDA of US$364m (+37% yoy) and net income of S$185m (+25% yoy) 2% and 1% above company compiled consensus, respectively.
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NSCSA - Fair Seas navigator (Hold) |
| March 11,2011 |
| A critical oversupply in VLCC tonnage accompanied by weak demand in OECD economies has resulted in trough conditions for VLCC shipping rates, which are cyclical in nature. Weak rates accompanied by high bunker fuels costs lead us initiate coverage with a Hold rating and a SR16.33 target price.
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Real Estate - Navigating the downturn; (Buy) Emaar & DSI, (Hold) Aldar, Sorouh & Arabtec (Hold) |
| March 10,2011 |
| The UAE property sector continues to undergo a price correction that began in late 2008. We believe while there is more downside risk to property prices, much of this is priced in to the stocks. Emaar and DSI offer up to 16% upside potential from current levels, while Aldar, Sorouh and Arabtec offer neutral risk-reward.
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Egypt – the challenge |
| February 21,2011 |
| We expect the market to be volatile once open – it is by no means cheap and there are still many challenges ahead. We believe more clarity on Egypt's economic direction beyond 2011 could restore investor confidence in a longer-term positive outlook.
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Rasmala-RBS Research: Nakilat – Where's the growth? |
| February 16,2011 |
| Nakilat, the world's largest LNG ship owner, offers investors exposure to Qatar's gas reserves. Given the structure of the time charters, we view the current market price as fair and initiate coverage with a Hold recommendation.
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Rasmala-RBS Research: MENA Strategy: Egypt – implications of the turmoil |
| February 01, 2011 |
| We expect the current social unrest to already have had negative implications for the Egyptian economy. A new government, irrespective of who the president is, will have to focus on getting the economy back on track. Expect stock market volatility until the economic outlook is clearer.
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Rasmala-RBS Research: Initiation of coverage Qatari banks, cheerful not cheap |
| January 28, 2011 |
| With Qatar's strong economy and a fiscally expansionary budget, the backdrop could hardly be better, in our view. Consequently, even though valuations are looking high for the region, we believe these can just about be justified by the high-teens growth rate and high-teens rate of return.
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Rasmala-RBS Research: Initiation of coverage Dana Gas – Energy with a twist (Buy) |
| January 20, 2011 |
| Dana Gas is the only listed oil & gas company in the MENA region with exploration concessions in Egypt and Iraq. It offers energy asset exposure to a region with some of the world's largest energy reserves and where natural gas demand exceeds supply. We initiate coverage with a Buy recommendation.
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Rasmala-RBS Research: Initiation of coverage Jordan Telecom – Maturity reached (Sell) |
| January 04, 2011 |
| We believe revenue growth at Jordan Telecom Group (JTG) has peaked, given the company operates in a country with a population of only 6.4m and a total of four operators in a saturated telecom market. We initiate coverage on JTG with a Sell recommendation and a target price of JOD4.43.
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