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Daily Report
1
Major Economic News
• Saudi insurance companies reported an increase of 28.0% Y/Y in the auto insurance sector’s gross written premiums (GWPs) to SAR 2.2bn in the Q2- 22 compared to SAR 1.7bn in Q2-21. (Source: Argaam)
• Saudi Arabia’s holdings of US Treasuries increased by USD 2.4bn M/M to USD 121.6bn in July. (Source: Argaam)
Major Corporate News
• Al Rajhi Bank received SAMA’s approval to increase its ownership in Al Rajhi Company for Cooperative Insurance (Al Rajhi Takaful) to 35.0% from 22.5% earlier which was equivalent to 9.0mn shares. (Source: Argaam)
• Arabian Drilling Co. plans to proceed with the initial public offering to list its ordinary shares on Tadawul. The offering includes selling 19.9% of the company’s existing shares and issuing new shares at 10.1% of the post- listing capital. The final offer price will be decided after the book-building process which will run from September 28 to October 5. (Source: Argaam)
• Shareholders of Walaa Cooperative Insurance Co. and SABB Takaful Co.
approved the proposed merger by issuing 0.6 share in Walaa for every one share in SABB Takaful, consequently, SABB Takaful will be dissolved.
Walaa’s capital will increase from SAR 646.4mn to SAR 850.6mn according to the merger agreement terms. (Source: Argaam)
• Arabian Contracting Services Co. announced that MBC Group Holdings Ltd., a major shareholder, exercised its purchase option to 15.0% of the company’s capital from another substantial holder, Engineer Holding Group.
MBC’s ownership in Al Arabia will increase to 20.0%, while EHG’s stake will decline from 65.0% to 50.0%. (Source: Argaam)
Market Analysis
• The Saudi Stock Exchange decreased 2.2% to 11,572.2 on Sunday. The value traded stood at SAR 5.0bn (down 28.8% over previous day), while the advance-decline ratio stood at 19/193. The parallel market index decreased 1.6% to 20,585.8 points. The value traded stood at SAR 26.1mn (up 2.3%
over previous day). Most sectors in the main market ended in the red.
Retailing (up 0.2%) was the only gainer; Utilities and Diversified Financials (down 5.7% and 5.6%, respectively) led the laggards.
Top Gainers
Company Price Change%
Top Losers
Company Price Change%
Saudi Stock Exchange
Index Closing High Low Daily
Change% YTD % TASI
NomuC
11,572 11,815 11,555 -2.2 2.6
20,586 21,063 20,483 -1.6 -20.8
TASI Ratios P/E* (x)
Price-to-Book (x) Dividend Yield (%) Return on Equity (%)
TASI (LHS) Volume Mn (RHS)
Millons
10:00 AM 11:00 AM 12:00 PM 1:00 PM 2:00 PM 3:00 PM0.0 1.0 2.0 3.0
11,550 11,625 11,700 11,775 11,850
*Source: Argaam (Excluding Aramco)
TASI movement during session
18.7 2.4 2.3 27.2
Index Close Daily
Change% YTD % PE (TTM) Energy
Materials Capital Goods Commercial Service Transportation Consumer Durables Consumer Services Media
Retailing Food & Staples Food & Beverages Healthcare Pharma & Bio Tech Banks
Diversified Financial Insurance Telecom Utilities REITs Real Estate Software & Services Average Index Value
Average
days 5 Average
days 10 Average
days 20 Average value traded for the month (bn)
11,880 11,913 12,164 5.37
Market Statistics
Value Traded
(SAR bn) Volumes
(mn shares) No. of Trades (‘000) Current Week
Previous week
5 137.9 351.6
26.8 654.6 1,434.80
Top Weighted Companies
Company Price Change%
WALAA 15.26 9.8
SPM 47.95 3.1
NCLE 61.80 3.0
DAR ALARKAN 14.98 2.7
CITY CEMENT 24.08 2.6
ACWA POWER 147.40 -7.3
SHAKER 18.20 -7.1
SALAMA 18.50 -7.0
ALRAJHI TAKAFUL 93.10 -6.8
TADAWUL GROUP 205.00 -6.7
Saudi Aramco 36.25 -0.7
Al Rajhi 85.70 -2.2
SNB 63.70 -2.5
SABIC 91.60 -2.2
STC 39.30 -0.9
6,113 -0.7 10.8 14.1
6,771 -2.8 -7.8 12.1
6,271 -3.4 -16.9 21
3,666 -2.8 -17.5 43.8
4,859 -1.4 -7.2 High
4,535 -4.1 -28.6 Neg
3,986 -2.9 -14.1 High
23,104 -5.1 -0.6 26.7
8,174 0.2 -17.0 22.7
10,016 -2.6 9.8 28.3
4,833 -1.7 -0.1 44.7
8,809 -2.7 20.4 41.6
3,437 -1.3 -33.8 Neg
13,083 -2.2 7.1 19.3
7,527 -5.6 10.2 8.4
5,363 -2.5 -10.5 Neg
6,857 -0.9 -5.8 18.1
7,174 -5.7 20.9 14.5
4,274 -1.2 -7.3 23.6
2,998 -1.2 -5.5 High
35,709 -4.5 24.6 34.4
© All rights reserved
19 September 2022
Daily Report
2
Regional and International Markets
• Among other regional markets, Dubai and Abu Dhabi remained closed.
Egypt, Qatar, Oman, and Kuwait declined 3.1%, 1.2%, 0.3% and 0.2%, respectively. Meanwhile, Bahrain closed flat.
• US industrial production dropped by 0.2% M/M in August (consensus: edge up by 0.2% M/M) after increasing by revised 0.5% M/M in July. Capacity utilization in the industrial sector dropped to 80.0% in August from a revised 80.2% in July. (Source: RTT news)
• US import prices increased 7.8% Y/Y in August, while export prices increased 10.8% Y/Y in August versus 13.1% Y/Y in July. On M/M basis, import prices declined 1.0% after falling by a revised 1.5% in July while export prices fell 1.6% M/M after plunging 3.7% M/M in July. (Source: RTT news).
• US business inventories rose by 0.6% M/M in July (consensus: 0.8% M/M) after surging 1.4% M/M in June. Retail inventories jumped by 1.2% M/M, while wholesale inventories rose 0.6%, meanwhile manufacturing inventories edged up 0.1% M/M. (Source: RTT news)
• UK retail sales volume declined 5.4% Y/Y in August (consensus: 4.2% Y/Y) after fall of 3.2% Y/Y in July. (Source: RTT news).
Forex / Currency
Currency Close Daily
Change% MTD % YTD % Dollar Index
Euro
Japanese Yen Sterling Pound Chinese Yuan Indian Rupee UAE Dirham Qatari Rial Kuwaiti Dinar Omani Rial Bahraini Dinar Egyptian Pound
Data Sources: Tadawul, Bloomberg, Reuters
* Three-month Interbank rate **NA: Not Available Closes as of September 18 2022
*EGM: Extra Ordinary Meeting
*OGM: Ordinary General Meeting
Regional Markets
Market Close Daily
Change% MTD % YTD % P/E Dubai (DFM)
Abu Dhabi (ADX) Kuwait (KSE) Qatar (QE) Oman (MSM) Bahrain (BSE) Egypt (EGX30)
Interbank Rates
Region Rate* Daily
Change(bps) MTD (bps) YTD (bps) USD LIBOR
Saudi Arabia (SAIBOR) UAE (EIBOR) Kuwait (KSE) Bahrain (BHIBOR)
International Markets
Index Close Daily
Change% MTD % YTD % P/E Dow Jones
Nasdaq S&P 500 FTSE 100 Germany DAX 30 France CAC 40 Japan Nikkei 225 Russia MOEX Hong Kong Hang Seng South Korea KOSPI China Shanghai Composite Australia ASX 200 India Sensex MSCI EM MSCI World
Commodity Markets
Commodity Price Daily
Change% MTD % YTD % Arab Light Crude ($/bbl)
Brent Crude ($/bbl) Texas crude ($/bbl) Natural Gas ($/mmbtu) Gold ($/oz)
Silver ($/oz) Steel ($/ton) Iron Ore (CNY/MT) Wheat ($/bu) Corn ($/bu) Sugar ($/lb) SMP* (EUR/MT)
*SMP: Skimmed Milk Powder
3,489 0.0 1.3 9.2 10.7
10,202 0.0 3.3 20.2 20.4
5,772 -0.2 -1.6 -1.9 9.2
13,079 -1.2 -2.6 12.5 14.6
4,466 -0.3 -2.6 8.1 12.2
1,938 0.0 1 7.8 7.1
9,763 -3.1 -2.4 -18.3 5.2
30,822 0.0 -2.2 -15.2 17.0 11,861 0.0 -3.3 -27.3 24.3 3,873 0.0 -2.1 -18.7 18.9 7,237 0.0 -0.7 -2.0 14.0 12,741 0.0 -0.7 -19.8 12.3 6,077 0.0 -0.8 -15.0 12.7 27,568 0.0 -1.9 -4.3 27.8
2,435 0.0 1.5 -35.7 3.9
18,762 0.0 -6.0 -19.8 6.9 2,383 0.0 -3.6 -20.0 10.0 3,126 0.0 -2.4 -14.1 13.6 6,739 0.0 -3.5 -9.5 14.1
58,841 0.0 -1.2 1.0 22.8
944 0.0 -5.0 -23.4 10.6
2,569 0.0 -2.2 -20.5 16.6
100.64 0.0 -4.3 27.1
91.35 0.0 -5.3 15.2
85.11 0.0 -5.0 10.5
7.76 0.0 -14.9 116.7
1,675.06 0.0 -2.1 -7.7
19.59 0.0 8.9 -15.0
789.00 0.0 1.2 -44.7
784.50 0.0 2.1 14.4
859.75 0.0 3.4 10.4
677.25 0.0 1.0 24.1
17.56 0.0 -1.2 -3.6
3,780.00 0.0 3.6 12.3
103.76 0.0 1.0 14.7
1.00 0.0 -0.4 -11.9
142.92 0.0 2.8 24.2
1.14 0.0 -1.7 -15.6
7.00 0.0 1.3 10.1
79.75 0.0 0.4 7.3
3.67 0.0 0.0 0.0
3.68 0.0 -0.1 0.1
0.31 0.0 0.3 2.2
0.39 0.0 0.0 0.0
0.38 0.0 0.0 0.0
19.42 0.0 1.1 23.6
3.57 3.8 46.6 335.6
3.47 2.8 35.5 256.7
3.29 14.6 38.7 292.5
2.63 0.0 0.0 112.5
4.25 3.3 11.8 273.6
Corporate Calendar
Date Company Event
19th Sep OBEIKAN GLASS Cash Dividend Distribution
19th Sep NAHDI EGM
20th Sep ALDAWAA Cash Dividend Distribution 20th Sep Theeb Cash Dividend Distribution 20th Sep Alamar Cash Dividend Distribution 21st Sep SASCO Cash Dividend Distribution
Daily Technical Outlook
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3
Technical observations
Index TASI
Ticker SASEIDX Index
Last Close 11,572
Short-term view Cautious
52 weeks high/low 13,949 – 10,600
Key price levels
S3 S2 S1 Pivot R1 R2 R3
11,209 11,352 11,446 11,718 12,784 11,849 11,914
Market data
Market Cap. (SARbn) 10,940.6
Value (SARmn) 5,019.5
Volume (mn) 137.9
Number of Transactions 351,631
Market Breadth 19 : 193
Key statistics
1D return % -2.18%
WTD return % -2.18%
QTD return -11.60%
YTD return 2.57%
ADT vol. 3M* (mn) 163.3
ADT val. 3M (SARmn) 6,169.7
TASI market commentary
• The TASI declined on Sunday weighed down by selling in index heavyweights like Materials (-2.78% D/D) and Banks (-2.19% D/D) stocks, and also due to weakness in global markets over the weekend. At close, the Saudi market ended the day with a loss of -2.18% at 11,572. In terms of activity, total volumes and value traded were ~138mn and ~SAR 5.0bn respectively. The advance- decline ratio came in at 19/193.
Technical outlook
• The TASI fell more than 255 points to close the trading session near the 11,550 mark. The index opened gap down and moved lower throughout the day on the back of profit-booking. Moreover, the index breached below its strong support of its previous peak near 11,780, and developed a big red candle yesterday after a bearish engulfing candle on Thursday, as bears dominated the bulls. Furthermore, the RSI line is moving lower into the negative territory, indicating a possibility of further profit-booking. Meanwhile, the index has immediate support near its Fibonacci 78.6% level of 11,450, below which the index can drag down further to test the 11,350 level. On the flip side, the index has resistance near 11,720, any penetration above it can test its previous peak near the 11,780 level.
Source: Tradingview, Tadawul, AlJazira Capital Source: Bloomberg, Argaam
TASI daily chart
Our view
Unchanged Up Down
19
193 2 NEUTRAL
CAUTIOUS
PROFIT Booking BEARISH HOLD ACCUMUL
CAUTIOUS BUY
BUY
Market depth
ADT stands for Average Daily Traded *
Market cap SAR10,941bn
(%) D/Y 2.30%
P/B 2.36x
ROE 27.2%
TTM P/E 18.7x
19 September 2022
Daily Technical Outlook
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4
Source: Tradingview, AlJazira Capital
Dar Alarkan Real Estate Development Co. (DAR ALARKAN) Technical observations
CHARTS OF THE WEEK
DAR ALARKAN breached its horizontal trendline yesterday, indicating a bullish sign.
Moreover, it is trading above both the 10-day and 20-day moving averages, showing strength.
Furthermore, the RSI line is moving up and is in the buy zone. We recommend buying the stock in a range of SAR 14.80 – 14.98, for a target of SAR 15.20 followed by SAR 15.45, with a strict stop loss of SAR 14.75 on a closing basis.
* As of 18th September 2022 *Note – Stop loss is based on a closing basis and not on a intraday basis
Code Company Close* Buy range Target 1 Target 2 Stop loss
4300 Dar Alarkan Real Estate
Development Co. 14.98 14.80-14.98 15.20 15.45 14.75
SAUDI MARKET - TOP PICKS FOR THE WEEK
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Disclaimer
AlJazira Capital, the investment arm of Bank AlJazira, is a Shariaa Compliant Saudi Closed Joint Stock company and operating under the regulatory supervision of the Capital Market Authority. AlJazira Capital is licensed to conduct securities business in all securities business as authorized by CMA, including dealing, managing, arranging, advisory, and custody. AlJazira Capital is the continuation of a long success story in the Saudi Tadawul market, having occupied the market leadership position for several years. With an objective to maintain its market leadership position, AlJazira Capital is expanding its brokerage capabilities to offer further value-added services, brokerage across MENA and International markets, as well as offering a full suite of securities business.
1. Overweight: This rating implies that the stock is currently trading at a discount to its 12 months price target.
Stocks rated “Overweight” will typically provide an upside potential of over 10% from the current price levels over next twelve months.
2. Underweight: This rating implies that the stock is currently trading at a premium to its 12 months price target.
Stocks rated “Underweight” would typically decline by over 10% from the current price levels over next twelve months.
3. Neutral: The rating implies that the stock is trading in the proximate range of its 12 months price target. Stocks rated “Neutral” is expected to stagnate within +/- 10% range from the current price levels over next twelve months.
4. Suspension of rating or rating on hold (SR/RH): This basically implies suspension of a rating pending further analysis of a material change in the fundamentals of the company.
The purpose of producing this report is to present a general view on the company/economic sector/economic subject under research, and not to recommend a buy/sell/hold for any security or any other assets. Based on that, this report does not take into consideration the specific financial position of every investor and/or his/her risk appetite in relation to investing in the security or any other assets, and hence, may not be suitable for all clients depending on their financial position and their ability and willingness to undertake risks. It is advised that every potential investor seek professional advice from several sources concerning investment decision and should study the impact of such decisions on his/her financial/legal/tax position and other concerns before getting into such investments or liquidate them partially or fully. The market of stocks, bonds, macroeconomic or microeconomic variables are of a volatile nature and could witness sudden changes without any prior warning, therefore, the investor in securities or other assets might face some unexpected risks and fluctuations. All the information, views and expectations and fair values or target prices contained in this report have been compiled or arrived at by Al- Jazira Capital from sources believed to be reliable, but Al-Jazira Capital has not independently verified the contents obtained from these sources and such information may be condensed or incomplete. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on the fairness, accuracy, completeness or correctness of the information and opinions contained in this report. Al-Jazira Capital shall not be liable for any loss as that may arise from the use of this report or its contents or otherwise arising in connection therewith. The past performance of any investment is not an indicator of future performance. Any financial projections, fair value estimates or price targets and statements regarding future prospects contained in this document may not be realized. The value of the security or any other assets or the return from them might increase or decrease. Any change in currency rates may have a positive or negative impact on the value/return on the stock or securities mentioned in the report. The investor might get an amount less than the amount invested in some cases. Some stocks or securities maybe, by nature, of low volume/trades or may become like that unexpectedly in special circumstances and this might increase the risk on the investor. Some fees might be levied on some investments in securities. This report has been written by professional employees in Al-Jazira Capital, and they undertake that neither them, nor their wives or children hold positions directly in any listed shares or securities contained in this report during the time of publication of this report, however, The authors and/or their wives/children of this document may own securities in funds open to the public that invest in the securities mentioned in this document as part of a diversified portfolio over which they have no discretion. This report has been produced independently and separately by the Research Division at Al-Jazira Capital and no party (in-house or outside) who might have interest whether direct or indirect have seen the contents of this report before its publishing, except for those whom corporate positions allow them to do so, and/or third-party persons/institutions who signed a non-disclosure agreement with Al-Jazira Capital. Funds managed by Al-Jazira Capital and its subsidiaries for third parties may own the securities that are the subject of this document. Al-Jazira Capital or its subsidiaries may own securities in one or more of the aforementioned companies, and/or indirectly through funds managed by third parties. The Investment Banking division of Al-Jazira Capital maybe in the process of soliciting or executing fee earning mandates for companies that is either the subject of this document or is mentioned in this document. One or more of Al-Jazira Capital board members or executive managers could be also a board member or member of the executive management at the company or companies mentioned in this report, or their associated companies. No part of this report may be reproduced whether inside or outside the Kingdom of Saudi Arabia without the written permission of Al-Jazira Capital. Persons who receive this report should make themselves aware, of and adhere to, any such restrictions. By accepting this report, the recipient agrees to be bound by the foregoing limitations.
