2
© All rights reservedTASI Movement in July
traded of SAR 5.6bn, the total value traded aggregated to SAR 95.6bn, representing another consecutive decline on a M/M basis at 33.5% less from June’s SAR 143.9bn in total value traded. Banking and Materials sectors accounted for 39.6% of the total value traded during the month. The M/M price change performances varied for all sectors for the month of July with only the Capital Goods, and Food and Beverages sectors ending the month in a negative M/M change. As of July, the Capital Goods sector continues to be the most to lag the market for a second consecutive month at a 0.3% M/M decline. Food and Beverages lead the lagging sector modestly at a relatively flat 0.1% decline on a M/M basis. Software Services and Diversified Financials however, underwent double digit growths to lead the market at a 16.7% and 12.0% change from June’s close, respectively.
In July, Dar AlArkan was the best performing stock, recording a 24.0% M/M increase. On the other hand, despite a majorly positive months end for most sectors- individual stocks such as United Cooperative Insurance and Arabia Insurance Cooperative Company ended the month of July with notable drawdowns of 60.8% and 38.7% respectively. Chemanol recorded the lowest P/E, for another consecutive month, at a lower 6.7x in July, compared to TASI’s P/E of 20.42x. The free-float ownership from qualified foreign investors (QFIs) in the Kingdom made up 12.66% of the total free-float ownership in the market for the month of June. Down from this year’s high of 15.29% ownership in February.
TASI started the month at 11,464.98 points and closed at 12,199.08 with an average daily value traded of SAR 5.6bn compared to SAR 6.5bn in June. The 28th of July alone accounted for roughly 12.4% of the month’s value traded
TASI is up 917.4 points on a YTD basis, recording a 8.1% change from the start of the year, and up 5.9%
from June. The Capital Goods sector posted another bottom table results for another month, yet at a more flat 0.3%M/M decline as of July. Food and Beverages lagged at a more flat percentage change at 0.1%M/M decline. Leading the leaderboard was the Software &
Services and Diversified Financials sectors. Both at double digit M/M price changes of 16.7% and 12.0%
respectively. The leaderboards vary on a YTD basis however- with the spread among the most leading and lagging sectors being 61.3% points in absolute terms.
Utilities maintained its leading YTD performance for another month at 33.4%YTD till the end of July.
Healthcare lagged closely at a 30.0% increase from the start of the year. At the other end of the YTD leaderboard- Pharmaceuticals & Biotechnology and Consumer Durables continue to bottom the YTD leaderboards as the worst performing sectors since the start of the year at 27.7% and 27.9% declines respectively. The Pharmaceuticals & Biotechnology sector, however, clawed back some of its yearly losses after ending July at a 9.4% increase from the previous month- making it now the second most laggard on a YTD basis by July’s end.
Materials and Banks registered the highest traded values among the sectors, accounting for 21.3% and 18.3%
respectively of the total value traded in July.
Value Traded (bn) - RHS Closing Price - LHS 2.00 4.00 6.00 8.00 10.00 12.00 14.00
11,000 11,200 11,400 11,600 11,800 12,000 12,200 12,400
3-Jul 4-Jul 5-Jul 6-Jul 13-Jul 14-Jul 17-Jul 18-Jul 19-Jul 20-Jul 21-Jul 24-Jul 25-Jul 26-Jul 27-Jul 28-Jul 31-Jul
Value Traded per Sector (%)
21.3%
18.3%
15.1%
9.4%
6.4%
3.3%
3.2%
3.0%
2.5%2.4%2.2%
12.9%
Materials Banks
Real Estate Mgmt & Dev't Insurance
Energy
Telecommunication Services Food & Beverages Capital Goods Diversified Financials REITs
Consumer Services Others
Source: TADAWUL, Aljazira Capital
Source: TADAWUL, Aljazira Capital
Source: TADAWUL, Aljazira Capital
Sectors Performance
Sector M/M Sector YTD
TASI 5.9% TASI 8.1%
Software & Services 16.7% Utilities 33.4%
Diversified Financials 12.0% Healthcare 30.0%
Healthcare 11.7% Energy 21.0%
Utilities 11.3% Diversified Financials 19.6%
Pharma & Bio Tech 9.4% Software & Services 17.1%
Food & Staples 8.6% Banks 13.8%
Banks 8.3% Food & Staples 4.8%
Commercial Service 7.5% Food & Beverages 1.2%
Real Estate 6.8% Real Estate -1.7%
Transportation 6.1% Media -2.6%
Consumer Services 5.5% Telecom -3.7%
Consumer Durables 5.1% Materials -4.0%
Telecom 4.5% Transportation -7.0%
Energy 2.9% REITs -10.5%
Retailing 2.6% Consumer Services -10.9%
Media 2.4% Insurance -13.9%
Materials 2.3% Commercial Service -15.1%
REITs 1.3% Retailing -16.2%
Insurance 0.3% Capital Goods -20.8%
Food & Beverages -0.1% Pharma & Bio Tech -27.7%
Capital Goods -0.3% Consumer Durables -27.9%
3
© All rights reservedTop 10 Companies by Index Weight (Q2-22)
Top 10 Highest Dividend Yield (2021)
Companies with the Lowest P/E (TTM)
ARAMCO is positioned as TASI’s largest constituent by the end of Q2-22 at 15.0% of the index. ARAMCO is then followed by Al Rajhi and SNB, constituting 14.7% and 9.1% of TASI respectively.
Taiba, AlMrakez, and ACC all stand as the top three stocks offering the highest dividend yields over their previouse year’s distributions. They stand well above the 2.2% average yield in the market at 13.5%, 7.5%
and 7.3% respectively.
Chemanol, for yet another month, traded as the market’s lowest P/E (TTM) on July’s end at a multiple of 6.7x.
Sipchem and Tansee recorded the second and third lowest multiples at 7.6x and 8.4x respectively.
AlRajhi and Banque Saudi Fransi had the highest total value traded by the end of July at SAR 7.17bn and SAR 5.24bn, respectively. Then followed by Alinma and STC, which recorded 3.85bn and 3.52bn in total value traded for the month, respectively.
While SAICO was the best monthly performer for the month of June, the stock’s price made the list again yet at the bottom end, recording a decline 27.3%M/M. The stock was third to worse after AICC (down 38.7%M/M) and UCA (down 60.8%
M/M). Topping the list are Dar AlArkan, Fitness Time, and Bawan, all recording double digit price change growths of 24.0%, 23.1%, and 21.1% respectively by July’s close.
Dar Alarkan and SEERA for the month of July both continue to trade at the lowest P/B ratios of 0.75x and 0.93x, respectively.
This was followed by Northern Cement and Arabian Shield at 0.96x and 1.02x, respectively.
15.0% 14.7%
9.1%
4.5% 3.2% 3.2% 2.9% 2.8% 2.8% 2.8%
Aramco Al Rajhi SNB SABIC STC Riyad Bank Alinma Bank SABB ACWA Power Co Bank Fransi
Dividend Yield Average market dividend yield 13.5%
7.5% 7.3% 6.5% 6.5% 6.4% 6.1% 5.8% 5.7% 5.7%
2.2%
0.0%
2.0%4.0%
6.0%8.0%
10.0%
12.0%
14.0%
16.0%
Taiba* ALMRAKEZ ACC Najran Cement Saudi Cement ARDCO YCC Maharah YANSAB EPCCO
6.7 7.6 8.4 8.9 10.0 10.6 10.6 11.2 11.7 12.0
Chemanol Sipchem TASNEE SABIC AGRI-NUTRIENTS ALYAMAMAH STEEL MEPCO GIG ZOUJAJ SABIC Nayifat
Top 10 Companies in Total Value Traded
Top/Worst Performing Companies (July 2022)
Companies with the Lowest P/B
7.17 5.24
3.85 3.52 3.42 3.11 3.05 3.02 2.80 2.68
0.001.00 2.003.00 4.005.00 6.007.00 8.00
ALRAJHI BSFR ALINMA STC DAR ALARKAN SABIC SAUDI ARAMCO SIPCHEM SABIC AGRI-NUTRIENTS SNB
-60.8%
-38.7%
-27.3%
-15.6%
-14.6%
24.0%
23.1%
21.1%
20.2%
19.4%
DAR ALARKAN FITNESS TIME BAWAN BAHRI SOLUTIONS
UCA AICC SAICO
SAUDI CERAMICS ALLIANZ SF
NORTHERN CEMENT
0.75 0.93 0.96 1.02 1.02 1.10 1.12 1.17 1.18 1.19
0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40
DAR ALARKAN SEERA Arabian Shield Kingdom TCC ZAIN KSA SISCO ALETIHAD SHL
Source: Bloomberg, Aljazira Capital
Source: Bloomberg, Aljazira Capital *Taiba: Exceptinal dividend payement
Source: TADAWUL, Aljazira Capital
Source: TADAWUL, Aljazira Capital
Source: TADAWUL, Aljazira Capital
Source: TADAWUL, Aljazira Capital
4
© All rights reserved• All regional markets covered in this report posted positive price performances by July’s end, being led by Oman’s MSM index at a 9.9%M/M increase- just as it closes its negative YTD performance to an almost flat 0.2%YTD decrease for July.
Regional Markets
Market Close M/M YTD P/E
Dubai (DFM) 3,338 3.6% 0.9% 10.8
Abu Dhabi (ADX) 9,663 3.1% 10.4% 20.2
Kuwait (KSE) 5,875 3.4% -3.5% 13.3
Qatar (QE) 13,122 7.6% 4.9% 16.0
Oman (MSM) 4,532 9.9% -0.2% 12.6
Egypt (EGX30) 9,369 1.6% -22.8% 6.3
• The US indices monitored in this report all closed the month of July at an increase from the previous month, with the tech heavy Nasdaq in double digit price growth territory.
International Markets
Global Indices Close M/M YTD P/E
Dow Jones 32,845 6.7% -15.3% 18.2
Nasdaq 12,948 12.6% -29.5% 27.6
S&P 500 4,130 9.1% -20.6% 20.4
FTSE 100 7,423 3.5% -2.9% 13.9
• The MSCI Emerging Markets Index posted a lackluster 0.7%M/M decrease, as the emerging market economies have been experiencing a long streak of about five months of withdrawals from international investor funds. The Institute of International Investors estimates the outflows from foreign investors in EM bonds and equities to amount to more than $38b over the past 5 months.
• The more developed market inclusive MSCI World index recouped some of its YTD losses in July at a 7.9%M/M increase.
Germany DAX 30 13,484 5.5% -19.5% 12.4
France CAC 40 6,449 8.9% -17.2% 13.1
Japan Nikkei 225 27,993 5.3% -8.3% 19.3
Russia MOEX 2,214 0.4% -41.8% 3.7
Hong Kong Hang Seng 20,166 -7.8% -6.6% 7.4
South Korea KOSPI 2,452 5.1% -21.7% 10.1
China Shanghai Composite 3,260 -4.3% -6.6% 13.3
Australia ASX 200 6,993 5.7% -11.8% 16.1
India Sensex 57,570 8.6% -9.0% 22.6
MSCI EM 994 -0.7% -18.8% 11.0
MSCI World 2,746 7.9% -21.2% 17.6
Source: Argaam, Bloomberg, Aljazira Capital
Commodities Performance
Commodity Name Price M/M Q/Q Y/Y YTD 3 Yrs 5 Yrs LOW_52WEEK HIGH_52WEEK
Light Crude ($/bbl) 111.9 -4.6% 41.2% 48.3% 41.2% 68.0% 120.7% 67.8 136.6
Brent Crude ($/bbl) 110.0 -1.5% 41.4% 44.1% 41.4% 68.8% 108.9% 64.6 139.1
Texas crude ($/bbl) 98.6 -9.0% 31.1% 33.4% 31.1% 68.4% 96.6% 61.7 130.5
Natural Gas ($/mn Btu) 8.2 43.6% 120.6% 110.2% 120.6% 268.5% 194.5% 3.5 9.8
GOLD ($/oz) 1,766 -2.5% -3.5% -2.7% -3.5% 24.9% 39.1% 1,681.0 2,070.4
Silver ($/oz) 20.4 2.4% -12.7% -20.1% -12.7% 25.2% 21.0% 18.1 26.9
Steel ($/ton) 855 -8.1% -40.4% -54.7% -40.4% 41.1% 36.1% 820 1,945
Iron Ore (CNY/MT) 824 -2.3% 21.7% -19.3% 21.7% -14.4% 54.3% 511 1,135
Wheat ($/bu) 807.8 -4.5% 5.4% 14.9% 5.4% 44.4% 44.4% 681.8 1,285.0
Corn ($/bu) 620.0 2.1% 13.6% 25.3% 13.6% 47.7% 48.0% 488.5 766.3
Sugar ($/lb) 17.5 -2.9% -4.5% 7.3% -4.5% 24.2% 24.2% 16.4 20.5
SMP (EUR/MT) 3,700 -6.9% 10.0% 50.4% 10.0% 76.9% 111.4% 3,350 4,100
Source: Bloomberg, Aljazira Capital
The majority of the commodities monitored in this report continue to post declines for yet another month, with the exception of Natural Gas being up 43.6%M/M, and silver and corn up 2.4%M/M and 2.1%M/M. As for the energy commodities, the market is still at a stretch from the class’ 52 week lows. Texas crude, however, recoded the largest dip of 9.0%M/M from June’s end, followed by steel at a 8.1%M/M decline.
Among the metals, silver remained at a growth of 2.4%M/M while the remainder of the covered metals posted monthly declines for July. Corn lead the food’s as a standalone growth from the foods covered, also at a growth of 2.1%M/M. As of July, all commodities covered are at increases from the past three years, with the exception of iron ore at a decline of 14.4%
for that same period.
5
© All rights reservedEconomic Data
Macro Economic Data Q/Q Y/Y
GDP (Q2-22) N/A 1.80% 11.80%
Reserve Assets (Q2-22) 1750.1bn SAR 3.40% 4.65%
Public Debt (Q1-22) 958.6bn SAR 1.09% 12.31%
Public Debt/GDP (2021) 30.0% - -
Consumer Spending June-22 M/M Y/Y
ATM Withdrawals 47.21bn SAR 11.61% 1.59%
Point of Sales 45.97bn SAR 7.81% 18.79%
Total Spending (ATM & POS) 103.58bn SAR 9.99% 13.41%
No. of ATMs 16.41k 0.00% -2.03%
No. of ATM Transactions 125.15k 5.83% -4.19%
No. of POS Terminal 1200.63k 1.19% 41.52%
Inflation Rate (June-22) 2.3%
Repo Rate (July-22) 3.00%
1-Month 3-Months 6-Months 12-Months
Saudi Arabia (SAIBOR) 2.70 3.09 3.42 3.87
US (LIBOR) 2.36 2.79 3.33 3.71
Region Rate M/M (bps) YTD (bps) Y/Y (bps)
Saudi Arabia (SAIBOR-3M) 3.092 15.31 218.61 229.75
UAE (EIBOR-3M) 2.707 82.96 234.22 233.64
Bahrain (BHIBOR-3M) 4.093 52.28 257.60 250.10
Source: Argaam, Bloomberg, Aljazira Capital
Deposit & Loans – June 22
Both deposites and loans came in at the highest monthly increases for the year at 2.5%M/M and 2.2%M/M respectively.
As loans continue to exceed bank deposits by the end of June, ADR stood at 100.4% for the month.
The Dollar Index is up 0.7%M/M for the month of July. The Dollar continues to strengthen, with fundamental economic and market implications, as the FED remains active in its agile policy towards interest rates. The Chinese Yuan and Euro continue to depreciate against the Dollar by July’s end. The Japanese Yen, however, recovered some of its depreciation against the dollar last month at a 1.5%M/M increase. The Euro posted the most monthly depreciation against the Dollar at a 1.9%M/M decline.
The yield curve reclined across all maturity dates by July’s end, in comparison to June’s yields- indicating an increased purchace driven pricing in the Saudi Arabian Sukuk market for the previouse month, as increases in an Sukuk prices ebbs the yields. The 10 year maturity Sukuk experienced the most yield change by July’s close.
Deposits (bn) Loans (bn) ADR
82%84%
86%88%
90%92%
94%96%
98%100%
102%
0.00 0.50 1.00 1.50 2.00 2.50
May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22
M/M Yield to Maturity (YTM) Curve Change – Saudi Sukuk
Monthly change aginst the US Dollar (%)
2 2.5 3 3.5 4 4.5
1Y 2Y 3Y 4Y 5Y 6Y 7Y 8Y 9Y 10Y 15Y 30Y
Yield To Maturity (%)
Saudi Sukuk 07/31/22 YTM Saudi Sukuk 06/30/22 YTM -25
-20 -15 -10-50 Basis Point Change M/M
BP Change
1Y 2Y 3Y 4Y 5Y 6Y 7Y 8Y 9Y 10Y 15Y
Source: SAMA, Aljazira Capital Source: Bloomberg, Aljazira Capital
Source: Bloomberg, Aljazira Capital
Exchange Rate
-0.6%
-1.9%
1.5%
0.7%
0.6%
0.3%
-2.5% -2.0% -1.5% -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0%
Euro Chinese Yuan Indian Rupee
Sterling Pound Dollar Index Japanese Yen
6
© All rights reservedEvent Calendar
Company Event
August 1, 2022
Future Care Listing date
SABIC AGRI-NUTRIENTS Cash Dividend Distribution
ALBILAD SUKUK Eligibility of Cash Dividend
August 4, 2022
MULKIA REIT Cash Dividend Distribution
BSFR Cash Dividend Distribution
August 8, 2022
NABA ALSAHA Start of IPO
August 9, 2022
AMAK Cash dividend distribution
August 11, 2022
DERAYAH REIT Cash Dividend Distribution
RIBL Cash Dividend Distribution
August 14, 2022
Saudi Aramco Financial results
Almunajem Foods Cash Dividend Distribution
Alinma Cash Dividend Distribution
Saudi Ceramics Cash Dividend Distribution
August 18, 2022
Budget Saudi Eligibility of Cash Dividend
SEDCO CAPITAL REIT Cash Dividend Distribution
ASLAK Cash Dividend Distribution
August 28, 2022
SAMA SAMA monthly bulletin
Source: Argaam
Al-Jazira Capital is a Saudi Investment Company licensed by the Capital Market Authority (CMA), license No. 07076-37
RESEARCH DIVISIONRATING TERMINOLOGY
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.
RESEAR
Asset Management | Brokerage | Investment Banking | Custody | Advisory
Head Office: King Fahad Road, P.O. Box: 20438, Riyadh 11455, Saudi Arabia، Tel: 011 2256000 - Fax: 011 2256068
