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					                                            market news and wrap-up
                                                                                                                           19 january 2009
                                            saudi arabia




                                          saudi arabia monday morning round-up
                                          SAMA cuts benchmark rates by 50 bps, decreases reverse repo to 0.75%
                                          Taiba Holding's preliminary net income plunges 59.2% Y-o-Y to SAR160 million
                                          Emaar the Economic City signs a SAR196 million contract with Hotta Company
                                          Thimar's 4Q2008 net loss widens to SAR5.2 million
                                          Kayan 4Q2008 losses reach SAR8.36 million
                                          QCC 4Q2008 profit rises 14%
                                          EPCC’s 4Q2008 net income plunges 32.9% Y-o-Y
                                          Chemanol 4Q2008 profit jumps 126%
                                          Maadaniyah’s 4Q2008 net loss jumps 418.9% Y-o-Y, FY2008 net profit surges 94.4% Y-o-Y
                                          Almarai's 4Q2008 net profit grows 13.5% Y-o-Y to SAR219 million



                                          agenda




                                            daily note
                                          TASI
                                           (SAR mn)
                                                                     Vol. (SAR mn)       SASI Low
                                            10,000                   SASI High           SASIClose                 5,500


                                             8,000                                                                 5,300


                                             6,000                                                                 5,100


                                             4,000                                                                 4,900


                                             2,000                                                                 4,700


                                                 0                                                                 4,500
                                                      12-Jan




                                                                13-Jan




                                                                                14-Jan




                                                                                                 17-Jan




                                                                                                          18-Jan




Saudi Arabia Research Team
+9661 211 0046
efgresearch@efg-hermes..com

              kindly refer to the
01            important disclosures and
              disclaimers on back page
market news and wrap-up                                                    19 january 2009
saudi arabia daily note


saudi market commentary
market loses more ground
Large cap stocks pulled the market down for a fifth session, with the TASI tumbling 1.1% to 4,649.7. Weak
4Q2008 results were also a key driver of the market’s negative performance. Five sectors advanced, while
nine declined and power and utilities didn’t change. Hotels and tourism surged 5.2%, insurance added 1.2%
and telecom and IT 1.0%. Media and publication plunged 4.7%, agriculture and food 4.3% and petrochemical
industries 2.3%. Liquidity declined by 3% to 208.0 million shares worth SAR3.8 billion.

Savola Group (2050.SE), which plunged 10% to SAR25.30, reported a 4Q2008 net loss of SAR464 million
today. Some 67 stocks advanced, 50 fell and eight were unchanged. Three stocks surged with maximum 10%,
with United Cooperative Assurance (8190.SE) closing at SAR25.30, Tourism Enterprise Company (4170.SE) at
SAR24.25 and Al Ahli Takaful (8130.SE) at SAR47.5. Saudi Basic Industries Corporation (2010.SE) was the
most liquid stock for a second day, trading shares worth SAR707.1 million. The stock dropped 6.2% to
SAR44.20. Saudi United Cooperative Insurance (8060.SE) fell by 9.9% to SAR20.55, Malath Cooperative
Insurance and Reinsurance by 9.8% to SAR29.30 and Asharaqiyah Agriculture Development (6060.SE) by
9.7% to SAR16.80. (By Ahmed Sarhan)
market news and wrap-up   19 january 2009
saudi arabia daily note


market statistics
market news and wrap-up                                                       19 january 2009
saudi arabia daily note


news

economic news
SAMA cuts benchmark rates by 50 bps, decreases reverse repo to 0.75%
The Saudi Arabian central bank, SAMA, cut its benchmark interest rates today. SAMA cut the benchmark
lending rate (repo rate) by 50 basis points (bps) to 2.0% and the reverse repo (deposit rate) to 0.75% from
1.5%.

We believe the bias will continue to focus on monetary loosening going forward, with the emphasis still on
reducing the benchmark lending rate. SAMA has tended to keep the official repo rate at a premium of about
25 bps over the FFTR, although the differential has varied according to domestic economic conditions and
the oil cycle. The difference between the US rate and the repo rate widened as the benchmark lending rate
was kept on hold in 2007 and in early 2008. We expect another 25 bps reduction in the lending rate in
1Q2009 before they are kept on hold, as well as possible further reductions in the CRR depending on liquidity
requirements. Fiscal policy will also remain expansionary and we forecast government spending will increase
by 11.5% from estimated 2008 spending levels.

Inflation is becoming less of an issue and is expected to have peaked in 3Q2008. Preliminary data for
December indicate the inflation rate moderated to 9.0% Y-o-Y from 9.5% in November. SAMA has reduced
the repo rate by 350 bps since the end of September. Reducing the lending rate is aimed at cutting the cost
of borrowing by commercial banks. SAMA twice reduced the cash reserve requirement (CRR) local banks have
to make on demand deposits to 7% from 13%, at the end of 2008.

The liquidity position in Saudi Arabia has improved and the three-month SIBOR has fallen to 1.8%, from 2.5%
in end-December. There are indications that there is sufficient liquidity in the banking sector to meet
commercial needs. Along with monetary loosening, liquidity in the market has improved with higher deposits,
especially net government deposit in the banking system. There are also indications that loan growth slowed
in 4Q2008 as banks become more cautious in terms of lending.

SAMA moved independently of any US rate moves as of November. SAMA moved ahead of the FOMC rate
decision in December. This is not unusual or a surprise as SAMA has moved independently in the past,
choosing to focus on domestic developments. The latest cut is a sign that SAMA will continue to ensure
liquidity is available and focus on growth boosting measures at a time of falling oil prices.
(By Monica Malik)


company news
Taiba Holding's preliminary net income plunges 59.2% Y-o-Y to SAR160 million
Taiba Holding Company preliminary consolidated net income plunged 59.2% Y-o-Y to SAR160 million for
FY2008, which ended in December, the company reported to the Saudi Stock exchange. Gross profit tumbled
55.6% Y-o-Y to SAR182.9 million while net operating income declined 62.9% Y-o-Y to SAR143.2 million. The
company's 4Q2008 net income increased 13.7% Y-o-Y and 11.6 % Q-o-Q to SAR32.8 million. Gross profit
grew 27.8% Y-o-Y to SAR43.5 million in 4Q2008 while net operating income rose 17.7% Y-o-Y to SAR31
million (Tadawul)

Emaar the Economic City signs a SAR196 million contract with Huta Company
Emaar the Economic City signed a SAR196 million contract with Huta Marine Works Company to carry out
the construction of a water desalination plant within King Abdullah Economic City, the company reported in
a disclosure to the Saudi Stock exchange. The desalination plant will have a daily capacity of 10,000 cubic
meters. (Tadawul)
market news and wrap-up                                                       19 january 2009
saudi arabia daily note


Thimar's 4Q2008 net loss widens to SAR5.2 million
National Agriculture Marketing Company’s (Thimar) net loss expanded 42% Q-o-Q to SAR5.2 million for
4Q2008, from SAR3.7 million in the previous quarter. Net profit in 4Q2007 was SAR5.5 million. Gross profit
increased 7.5% Y-o-Y to SAR6.3 million. Thimar reported an operating loss of SAR1.0 million, from an
operating profit of SAR0.5 million in 4Q2007. Gross profit in FY2008 reached SAR26.9 million, up 15% Y-o-
Y from SAR23.4 million. Thimar's operating loss narrowed 35% Y-o-Y to SAR0.9 million, from SAR1.5 million
in FY2007, due to cost rationalization, the company explained. Thimar reported a net loss of SAR7.7 million,
from a net profit of SAR2.6 million, because of investment losses, the company added. (Tadawul)

Kayan 4Q2008 losses reach SAR8.36 million
Kayan’s 4Q2008 losses reached SAR8.36 million, from SAR24.61 in 3Q2008. Net profit for the nineteen
months reached SAR494.1million. The company’s plants have not started operating yet, but an average
63.3% of construction has been completed. (Tadawul)

QCC 4Q2008 profit rises 14%
Qassim Cement Company’s 4Q2008 profit rose 44.9% Y-o-Y, and declined 27.9% Q-o-Q, to SAR81.8 million.
Operating profit dropped 42.5% Y-o-Y to SAR88.7 million. Net profit for FY2008 declined 6.6% Y-o-Y to
SAR507.4 million, and operating profit dropped 6.6% to SAR502.1 million. The Y-o-Y decline was due to the
company halting in June 2008 and to expenses related to QCC’s subsidiary, Cement Industries, which started
operation in 2009, according to Qassim. (Tadawul)

EPCC’s 4Q2008 net income plunges 32.9% Y-o-Y
Eastern Province Cement Company’s (EPCC) 4Q2008 net income plunged 68.3% Y-o-Y to SAR14.5 million,
but this was up 19.3% Q-o-Q. Operating profit for 4Q2008 dropped 28.5% Y-o-Y to SAR81.7 million. Net
income for FY2008 fell 19.8% Y-o-Y to SAR434.2 million and operating profit fell 20.1% Y-o-Y to SAR422.1
million. The decrease in sales volumes is mainly attributable to the continued export ban on cement, which
coincided with lower local sales in 3Q2008 and 4Q2008, the company said to the Saudi stock exchange.
(Tadawul)

Chemanol 4Q2008 profit jumps 126%
Chemanol’s 4Q2008 profit jumped 126% Y-o-Y, but declined 28% Q-o-Q, to SAR9.5 million. Operating
profit rose 13% Y-o-Y to SAR7.8 million. Net profit in FY2008 surged 54% Y-o-Y to SAR38 million, and
operating profit increased 29% to SAR45.9 million. The Y-o-Y growth was mainly due to the increase in sales,
and the Q-o-Q decline was due to the drop in sales during December because of the Muslim Eid al-Adha
holiday and the Christmas holiday, the company announced. (Tadawul)

Maadaniyah’s 4Q2008 net loss jumps 418.9% Y-o-Y, FY2008 net profit surges 94.4% Y-o-Y
National Metal Manufacturing and Casting Company’s (Maadaniyah) net loss for 4Q2008 skyrocketed
418.9% Y-o-Y and 13.5% Q-o-Q to SAR27 million. Operating loss for 4Q2008 increased 154% Y-o-Y to
SAR28.6 million. Net profit for FY2008 surged 94.4% Y-o-Y to SAR40.2 million and operating profit increased
16.3% Y-o-Y to SAR49.3 million. Maadaniyah attributed the jump in losses in the fourth quarter to an
inventory write-down, falling selling prices and decreasing sales by SAR29.5 million for discounts. (Tadawul)

Almarai's 4Q2008 net profit grows 13.5% Y-o-Y to SAR219 million
Almarai reported earnings growth of 13.5% Y-o-Y to SAR219.2 million for 4Q2008, from SAR193.1 million
in the same quarter last year. This implies a 25.4% Q-o-Q decline from SAR293.7 million in 3Q2008. Revenue
increased 22% Y-o-Y to SAR1.3 billion from SAR1.0 billion because of a shift in the seasonality of
consumption patterns due to the change in the timing of Ramadan and Eid. The Muslim holidays fell in the
third quarter in 2008, while they were in the fourth quarter in 2007. Gross profit for 4Q2008 surged 25.7%
Y-o-Y SAR494.4 million, up from 394 million. Operating profit was SAR264.8 million, up 19% Y-o-Y from
SAR222.5 million. Revenue for FY2008 increased 33.4% Y-o-Y to SAR5.0 billion, from SAR3.8 billion last year.
The company also reported an increase of 33.9% Y-o-Y in gross profit to SAR2.0 billion, from SAR1.5 billion
in FY2007. Operating profit rose 35.9% Y-o-Y to SAR1.0 billion from SAR780.7 million. Net profit also
showed strong growth at SAR910.3 million, up 36.4% Y-o-Y from SAR667.3. Almarai attributes these results
to its five-year plan, which includes meeting growing demand while maintaining quality and diversity and
expanding the company's distribution network.
Almarai's board of directors will propose to its shareholders in its next annual general meeting, which is
expected to be held in March, a cash dividend of SAR3.5 per share. This implies a total cash dividend
distribution of SAR381.5 million for the year. (Almarai press release, Tadawul)


[Note – EFG-Hermes is not responsible for the accuracy of news items taken from other media.]
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disclaimer
Our investment recommendations take into account both risk and expected return. We base our long-term fair value estimate on a fundamental analysis of the
company's future prospects, after having taken perceived risk into consideration. We have conducted extensive research to arrive at our investment
recommendations and fair value estimates for the company or companies mentioned in this report. Although the information in this report has been obtained from
sources that EFG-Hermes believes to be reliable, we do not guarantee its accuracy, and such information may be condensed or incomplete. Readers should
understand that financial projections, fair value estimates and statements regarding future prospects may not be realized. All opinions and estimates included in this
report constitute our judgment as of this date and are subject to change without notice. This research report is prepared for general circulation and is intended for
general information purposes only. It is not intended as an offer or solicitation with respect to the purchase or sale of any security. It is not tailored to the specific
investment objectives, financial situation or needs of any specific person that may receive this report. We strongly advise potential investors to seek financial
guidance when determining whether an investment is appropriate to their needs. No part of this document may be reproduced without the written permission of
EFG-Hermes.

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