MSM30 end positively up on good dividends

Following drops in its performance in weeks before, the MSM30 managed to end positively up by 0.55 per cent at 5,035.23 supported mainly by good announced distributions by companies, funds movements, speculative activities and analyst meetings held by companies. We previously insisted on the importance of such meetings and this step was also urged by the MSM administration. All sub-indices closed up led by the Financial Index (+1.61 per cent at 7,495.92) followed by the Services Index (+0.97 per cent) then the Industrial Index (+0.8 per cent). The MSM Shariah Index closed up by 0.11 per cent.
In the weekly technical analysis, we will keep our last recommendation as we said that if the index breaking the level of 5,000 points, which is achieved. The index will move towards the second support level at 4,960 points. If this level breaks, the MSM 30 index will touch the level of 4,930 points. The MSM30 ended the first month of 2018 down by 1.95 per cent at 4,999.96. This happened despite the announcement of the expanding and encouraging general budget statement as the cautious sentiments and weak annual results for many companies especially in the Industrial and Service sector dominated the investors’ stern reactions. Both average daily turnover and volume in January dropped on annual basis by 31.7 per cent and 16.1 per cent to RO 2.3 million and 13.3 million shares respectively.
Till date, 18 companies have announced cash dividends for 2017. The total amount so far stands at RO 203.8 million, up by 6.9 per cent on annual basis despite pressures on earnings. The dividend payout came at 50.3 per cent compared to 44 per cent for the same companies in the previous year. MSM and U Capital data shows that 8 companies have announced stock dividends with total value of RO 66 million up by 25.8 per cent on annual basis taking into account that only 6 companies announced stock dividends in the previous year with value of RO 52.47 million.
Locally, CBO’s Nov’17 data indicates that the total Islamic deposits of Islamic banks and Islamic windows combined have grown by 36.4 per cent YoY and 1.5 per cent MoM to reach RO 2.92 billion, whereas total Islamic customer financing has increased by 26.4 per cent YoY and 2.0 per cent MoM to reach RO 3.0 billion, bringing the loan-to-deposit ratio down from 111 per cent in Nov’16 to 102 per cent in Nov’17. Conventional deposits rose by 2.4 per cent YoY (remained flat on MoM basis) to reach RO 18.63 billion and conventional credit rose by 4.9 per cent YoY and 1.1 per cent MoM to reach RO 20.55 billion.
Conventional banking Loan-to-Deposit Ratio (LDR) stands at 110.3 per cent at the end of Nov’17, up from 107.7 per cent a year ago. Total banking sector deposits grew by 6.0 per cent YoY and 0.2 per cent MoM to reach RO 21.55 billion. Total banking sector credit reached RO 23.55 billion, up by 7.3 per cent YoY and 1.2 per cent MoM. Total banking Loan-to-Deposit Ratio (LDR) stands at 109.3 per cent at the end of Nov’17, up from 108.0 per cent a year ago.
Recent data about telecom subscribers revealed that total mobile subscribers stood at 6.94 million in 2017, up by 1.1 per cent compared to 2016 mainly supported by growth in Pre-paid mobile operators’ subscribers’ base. Pre-paid mobile subscribers formed 90.6 per cent of the total mobile subscribers. The growth in active mobile broadband subscribers continued to be strong as it registered 10.5 per cent during the same period to 4.35 million representing an absolute increase of 413.7k. Strong growth was also seen in the total Internet subscribers as they increased by 81.7k subscribers, i.e. 30.3 per cent in 2017.
Saudi Stock Exchange topped the GCC financial markets gainers closing up by 1.79 per cent on weekly basis while the Qatar Exchange declined the most during the week by 2.67 per cent.
Kuwait last week announced the state budget for the year ending on March 31, 2019. The budget projects spending at KWD 20bn and revenues at KWD 15bn. Oil revenues are expected to reach KWD 13.3 billion, up from KWD 11.7 billion a year ago. Non-oil income is projected to remain almost flat at KWD 1.6 billion. As per Kuwait’s Finance Minister the budget is based on an average oil price of $50/bbl. and that the deficit would be financed by borrowing and using reserves. The KWD 5 billion deficit would be before the transfer of 10 per cent of revenues to Kuwait’s sovereign wealth fund. The budget deficit for the current fiscal year, which ends on March 31, 2018, was estimated at KWD 6.5 billion before the 10 per cent deposit into the sovereign wealth fund.
Globally, US FOMC’s December statistics indicated that the US labour market had continued to strengthen and that the economic activity has been rising at a solid rate. Gains in employment, household spending and business fixed investment have been solid, and the unemployment rate has stayed low.
On a 12-month basis, both overall inflation and inflation for items other than food and energy have continued to run below 2 per cent. In view of the realised and expected labour market conditions and inflation, the Committee decided to maintain the target range for the federal funds rate at 1.25 per cent to 1.5 per cent. 
— Courtesy: U-Capital