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Satyendra Pathak
Doha
Stocks listed on Qatar Stock Exchange (QSE) are expected to post an annual average earnings growth of 18.3 percent for 2018, QNB Financial Services (QNBFS) has said in a report released on Tuesday.
“We expect Qatari stocks under coverage to maintain their earnings growth momentum in the fourth quarter of 2018 with an 18.3 percent year-on-year increase,” QNBFS said in the report.
“We estimate banks under coverage (ex-QNB) to experience a year-on-year increase of 17.5 percent largely due to a base effect stemming from Doha Bank as the bank is expected to contribute positively to the year-on-year profitability performance based on our figures. We expect Doha Bank bottom-line to surge in the fourth quarter due to halving of its provisions as the bank booked large
provisions.
“Moreover, we expect Commercial Bank (CB) to continue its positive performance as the bank has made a successful turnaround and significantly lowered provisions while trimming opex. We pencil in a net income of QR408.9 million against QR344.7 million in the fourth quarter of 2017 and QR404.6 million in the third quarter of 2018, driven by lower provisions as CBQ has already provisioned for legacy NPLs,” the report said.
The report estimates year-on-year jump of 19.2 percent in the bottom-line of diversified non-financials under coverage, while forecasting a marginal decline of 1.8 percent on the quarterly basis.
“Based on our assumptions, Industries Qatar (IQ) leads the significant growth in net income on year-on-year basis followed by Vodafone Qatar. Strength in urea prices should boost IQ’s results in the fourth quarter of 2018. Dividend per share (DPS) by IQ is expected to jump from QR5 in 2017 to QR7 with upside possible,” the report said.
As far as Vodafone Qatar is concerned, the report said, the company should continue its trend of positive earnings in the fourth quarter of 2018.
“Our forecasts are in-line with management’s 2018 guidance. Revenue should grow 1 percent year-on-year and 12 percent quarterly basis with sequential boost driven by seasonality and handset sales. Profitability of the company continues to benefit from favourable license amortisation costs comparison with Vodafone Qatar’s licence extension for an additional 40 years (until 2068) helping reduce annual license amortisation costs from QR403 million to QR84 million,” the report said.
On an overall basis, the report said, the QSE main index made a strong comeback in 2018 rising 36 percent and 43 percent on a total return (TR) basis from its lows reached on November 30, 2017.
It also surpassed modestly its pre-embargo level on a price basis while gaining 11.2 percent in TR terms, the report said.
Increased foreign ownership limits (FOLs) and the resultant foreign flows led by QNB and QIB and higher average oil prices have been the primary catalysts driving the index to be the top GCC performer in 2018, the report said.
“Going forward, we think Qatari stocks may need positive earnings and dividends surprises to carry the rally into 2019 in the short-term. Longer-term, we remain bullish on the Qatari stock market given attractive fundamental drivers and a significant spending program that should provide tailwinds for growth,” QNBFS said in the report.
Doha
Stocks listed on Qatar Stock Exchange (QSE) are expected to post an annual average earnings growth of 18.3 percent for 2018, QNB Financial Services (QNBFS) has said in a report released on Tuesday.
“We expect Qatari stocks under coverage to maintain their earnings growth momentum in the fourth quarter of 2018 with an 18.3 percent year-on-year increase,” QNBFS said in the report.
“We estimate banks under coverage (ex-QNB) to experience a year-on-year increase of 17.5 percent largely due to a base effect stemming from Doha Bank as the bank is expected to contribute positively to the year-on-year profitability performance based on our figures. We expect Doha Bank bottom-line to surge in the fourth quarter due to halving of its provisions as the bank booked large
provisions.
“Moreover, we expect Commercial Bank (CB) to continue its positive performance as the bank has made a successful turnaround and significantly lowered provisions while trimming opex. We pencil in a net income of QR408.9 million against QR344.7 million in the fourth quarter of 2017 and QR404.6 million in the third quarter of 2018, driven by lower provisions as CBQ has already provisioned for legacy NPLs,” the report said.
The report estimates year-on-year jump of 19.2 percent in the bottom-line of diversified non-financials under coverage, while forecasting a marginal decline of 1.8 percent on the quarterly basis.
“Based on our assumptions, Industries Qatar (IQ) leads the significant growth in net income on year-on-year basis followed by Vodafone Qatar. Strength in urea prices should boost IQ’s results in the fourth quarter of 2018. Dividend per share (DPS) by IQ is expected to jump from QR5 in 2017 to QR7 with upside possible,” the report said.
As far as Vodafone Qatar is concerned, the report said, the company should continue its trend of positive earnings in the fourth quarter of 2018.
“Our forecasts are in-line with management’s 2018 guidance. Revenue should grow 1 percent year-on-year and 12 percent quarterly basis with sequential boost driven by seasonality and handset sales. Profitability of the company continues to benefit from favourable license amortisation costs comparison with Vodafone Qatar’s licence extension for an additional 40 years (until 2068) helping reduce annual license amortisation costs from QR403 million to QR84 million,” the report said.
On an overall basis, the report said, the QSE main index made a strong comeback in 2018 rising 36 percent and 43 percent on a total return (TR) basis from its lows reached on November 30, 2017.
It also surpassed modestly its pre-embargo level on a price basis while gaining 11.2 percent in TR terms, the report said.
Increased foreign ownership limits (FOLs) and the resultant foreign flows led by QNB and QIB and higher average oil prices have been the primary catalysts driving the index to be the top GCC performer in 2018, the report said.
“Going forward, we think Qatari stocks may need positive earnings and dividends surprises to carry the rally into 2019 in the short-term. Longer-term, we remain bullish on the Qatari stock market given attractive fundamental drivers and a significant spending program that should provide tailwinds for growth,” QNBFS said in the report.
