Calm MSM trading ahead of results season

The last week saw sluggish trading (excluding the special deal on Dhofar Tourism). The investment activities were calm ahead of initial 1H 2018 results, which reflect investor caution. There was also selling pressure on a number of leading stocks.
The MSM30 closed the week down by 1.05 per cent at 4,523.79. All sub-indices went down lead by the Services Index (-1.65 per cent), then the Industrial Index (-1.24 per cent) and finally the Financial Index (-0.9 per cent). The MSM Shariah Index closed down by 2.21 per cent.
Galfar Engineering and Contracting Co disclosed the winning of arbitration award on construction contract of Al Ansab Sewage treatment plant. The defendant, which is Oman Wastewater Services Company SAOC / Haya Water in this case, is obligated to 1) refund RO 2.07m to the claimant, 2) pay the claimant an amount of RO 0.558m as bank interest at the rate of 6.5 per cent and 3) bear the cost and fee of arbitration proceedings. Thus, the total awarded amount will be RO 2.6m. Earlier this year, the company announced an arbitration award issuance in the second and third of the four arbitration proceedings between the company and Haya Water. The total awards of those were roughly RO 24.4m.
The Board of Directors of Al Jazeera Services decided to create a charge of RO 2,221,787 to the “profit and loss account” in the second quarter ending June 30, 2018 related to valuation report on its investment in Al Anwar Ceramic Tiles Co SAOG. The company said that the reason behind this valuation is linked to continuing decline of Al Anwar Ceramic Tiles profitability. Al Jazeera Services owns a stake of 36.99 per cent in Al Anwar Ceramic Tiles.
In the weekly technical analysis, as we mentioned last report the MSM30 index broken down the first support level at 4,560 points as we said that broken this level will allow the index to reach 4,520 points and this what happen. In the technical analysis, the MSM index is still moving in downtrend channel to reach 4,500 points.
Some special deals took place during the previous week with total value of RO 23.86m. That deal was done on Dhofar Tourism. Up till this year, the total value of special deals stood at RO 110.7m which is 353 per cent higher than the same period in 2017. The services sector witnessed the highest deals in terms of values as it formed 55.8 per cent of the total.
The number of small and medium enterprises (SMEs) registered by the Public Authority for Small and Medium Enterprises Development (Riyada) reached to 2,801 in the first five months of 2018, bringing the total number of these institutions to 34,636 compared to 31,835 at the end of 2017, according to preliminary data released by the NCSI. The new registrations of small and medium enterprises (SMEs) in Oman stood at 2,801 in the first five months of 2018, down from 4,328 new registrations for the same period of last year. Among various governorates, Muscat Governorate witnessed new registrations of 1,041 SME units in January-May period of 2018, constituting 36 per cent of total new registrations. The new registrations of SMEs in Al Batinah North stood at 421 during January-May period of 2018 (constituting 20 per cent of total registrations), followed by Al Dakhiliyah (315), Al Batinah South (215), Dhofar (186), Al Sharqiyah North (180), Al Sharqiyah South (171), Al Dhahirah (145), Al Buraimi (94), Al Wusta (17) and Musandam (16).
The electricity subsidy for the year 2017 was at RO 0.456bn, a 8.3 per cent decrease compared to 2016. Subsidy per customer dropped by 14 per cent from RO 463 in 2016 to RO 398 in 2017 and subsidy per unit dropped from RO 16.44 per MWh in 2016 to RO 14.09 per MWh in 2017. The reduction of subsidy per customer was largely attributable to introduction of Cost Reflective Tariff for certain categories of the customers. An estimated 10,000 government, commercial and industrial customers across the Sultanate, identified by electricity authorities as “large” power consumers, are currently subject to Cost Reflective Tariffs (CRT) that came into force on January 1, 2017.
Of the five distribution and supply subsidiaries that receive government subsidy, the biggest beneficiary was Mazoon Electricity Company (MZEC), which accounted for a 32 per cent, followed by Muscat Electricity Distribution Company (MEDC) at 22 per cent, Rural Areas Electricity Company (RAECO) at 20 per cent, Majan Electricity at 18 per cent and Dhofar Power Company at 8 per cent. Total electricity supplied by the group reached 32,277 GWh in 2017 a 7 per cent increase of which 45.8 per cent was consumed by residential customers, 14.6 per cent by commercial customers, 32.5 per cent by large power consumers under CRT, 5.6 per cent by government and others stood at 1.5 per cent.
Kuwait Stock Exchange topped the gainers up by 4.03 per cent within the GCC region while Saudi Stock Exchange was the worst as it went down by 1.6 per cent.
Saudi 1Q 2018 GDP at constant prices increased by 1.15 per cent YoY at SAR 647.8bn, preliminary data published by General Authority for Statistics showed.
This is the first increase on that basis since 4Q 2016 as all year 2017 saw annual drops in GDP due to Saudi commitment of reducing oil production as it abide by Opec agreement. Oil Sector contributed by 42.2 per cent while non-oil sector and import duties formed the balance. Oil Sector GDP stood at SAR 273.3bn, an annual increase of 0.62 per cent while non-oil sector GDP went up by 1.61 per cent. Data showed that private sector contribution to non-oil sector came at 69.1 per cent in 1Q 2018 compared with 69.4 per cent for the same period last year.
Qatar’s gross domestic product, adjusted for inflation, grew 1.4 per cent from a year earlier in the first quarter of 2018, the ministry of planning and statistics said in a statement. An expansion of about 5 per cent in the non-hydrocarbons sector mitigated the more than 2 per cent decline in hydrocarbons. [Courtesy: U Capital]