The MSM 30 index closed 0.30 per cent higher for the week ended March 7, to close at 5,993. The financial index declined 0.35 per cent, while services index gained 0.98 per cent and industry index gained 0.27 per cent.
Al Anwar Ceramic Tiles reported a 20.7 per cent year-on-year growth in revenues to OMR22.4 million in 2012 while net profit grew 13 per cent year-on-year at OMR6.5 million. The company operated its four production lines at full capacity in 2012 and is planning to set up a fifth production line having a capacity of 3.5 million square metres per annum. The board has proposed a cash dividend distribution of 15 baisas per share and stock dividend of 15 per cent. The stock trades at 13.3 times its 2012 EPS of 32 baisas and carries a cash dividend yield of 3.5 per cent at its last traded price.
Bank Sohar saw strong trading volume in the past two weeks pushing the stock to a 52- week high of 193 baisas. The stock saw some profit-booking with the price declining 4.66 per cent during the week to 181 baisas. OIFC has increased its stake in Bank Sohar to 15 per cent and any further increase needs an approval from the Central Bank of Oman.
Transgulf Investment Holding and Al Madina Financial & Investment Services have agreed to merge into one entity subject to the shareholders approval in their respective extraordinary general meetings. Transgulf currently holds around a 20 per cent stake in Al Madina Financial. Transgulf's investment portfolio comprises mainly real estate companies — Tilal Development and Al Madina Real Estate which may go public later this year. Transgulf has sold its holding in Bank Muscat completely.
Mixed trend in GCC
GCC markets closed the week on a mixed note with Kuwait, Bahrain and Oman ending in the green while the other markets closed lower, partly due to cash dividend adjustments in some index stocks.
Qatar National Bank gained nearly 3 per cent in the previous week on a high volume. The bank reported a net profit of 8.3 billion Qatari riyals in 2012, which is 11 per cent higher year-on-year. Loans and advances grew 29 per cent year-on-year to 250 billion riyals, while deposits rose 35 per cent quarter-on-quarter to 270 billion riyals. The stock trades at a P/BV multiple of 1.97x attributable to its high ROE of 19 per cent and strong market share in Qatar.
QNB is acquiring National Société Générale Bank in Egypt, which is expected to be accretive to earnings in 2013. We expect this stock to move up in near-term
Yanbu National Petrochemical (Yansab) reported a net profit of 2.4 billion Saudi riyals in 2012, a decline of 23 per cent year-on-year due to lower prices of most petrochemical products during the year. However, revenues during the year at 9.3 billion riyals declined only 3.7 per cent year-on-year as lower prices were offset by an increase in volumes sold. The company generates healthy free cash flows, recording 3.1 billion riyals in 2012 and implying FCF yield of 8.5 per cent. In the absence of any major capital expenditure outlays in the forseeable future, management may choose to start distributing surplus cash flows as dividends going forward.
Dubai Islamic Bank shareholders have approved its plan to acquire 100 per cent of Islamic housing finance provider Tamweel. The bank is already a majority shareholder in Tamweel with a 58.2 per cent stake and will now make a formal offer to acquire the remaining 41.8 per cent of shares it does not own. We have a bullish view on DIB.
Disclaimer: This column expresses only the views of the contributor and investing in stocks carries risk of financial loss for which the contributor is in no way liable.