Page 1 of 5

Market Review and Outlook QE Index and Volume

The Qatar Exchange (QE) Index declined by 475.53 points, or

3.31%, during the week, to close at 13,874.97 points. Market

capitalization decreased by 3.1% to reach QR739.2 billion (bn) as

compared to QR762.6bn at the end of the previous week. Of the 43

listed companies, 2 companies ended the week higher, while 39 fell

and 2 remained unchanged. Islamic Holding Group (IHGS) was the

best performing stock for the week, with a gain of 1.4% on 0.5 million

(mn) shares traded; the stock is up 160.0% year-to-date (YTD). Doha

Bank (DHBK) was the worst performing stock, with a decline of 5.9%

on 2.5mn shares traded. The stock is still up 1.2% YTD.

QNB Group (QNBK), Industries Qatar (IQCD) and Qatar Islamic

Bank (QIBK) dragged the index down. QNBK ended the week

shaving 93.7 points off the index. However, the stock is up 18.0%

YTD. IQCD dragged the index down by 66.0 points; the stock is up

13.1% YTD. QIBK also pushed the index lower by 55.0 points. The

stock is still up 63.8% YTD. On the other hand, Medicare Group

(MCGS) was the only stock in the QE index that didn’t post a decline

during the week on a closing basis.

Trading value during the week decreased by 18.0% to reach

QR2.7bn vs. QR3.3bn in the prior week. The Banks & Financial

Services sector led the trading value during the week, accounting for

38.4% of the total equity trading value. Real Estate sector was the

second biggest contributor to the overall trading value, accounting for

29.7% of the total trading value. Ezdan Holding (ERES) was the top

value traded stock during the week with total traded value of

QR537.5mn.

Trading volume decreased by 17.3% to reach 66.8mn shares vs.

80.8mn shares in the prior week. The number of transactions also fell

by 23.5% to reach 25,776 transactions versus 33,675 transactions in

the prior week. The Real Estate sector led the trading volume,

accounting for 53.5%, followed by Banks & Financial Services sector

which accounted for 23.0% of the overall trading volume. ERES was

the top volume traded stock during the week with total traded volume of

27.1mn shares.

Foreign institutions turned bearish during the week with net

selling of QR114.0mn vs. net buying of QR263.9mn in the prior

week. Qatari institutions remained bearish with net selling of

QR174.0mn vs. net selling of QR288.4mn the week before. Foreign

retail investors turned bullish for the week with net buying of QR34.5mn

vs. net selling of QR57.9mn in the prior week. Qatari retail investors

remained bullish with net buying of QR253.8mn vs. net buying of

QR82.8mn the week before. Thus far in 2014, the QE has already

witnessed net foreign portfolio investment inflow of ~$2.4bn.

Market Indicators Week ended

Sep. 25, 2014 Week ended

Sep. 18, 2014 Chg. %

Value Traded (QR mn) 2,714.0 3,311.4 (18.0)

Exch. Market Cap. (QR mn) 739,243.3 762,567.6 (3.1)

Volume (mn) 66.8 80.8 (17.3)

Number of Transactions 25,776 33,675 (23.5)

Companies Traded 43 43 0.0

Market Breadth 2:39 31:12 –

Market Indices Close WTD% MTD% YTD%

Total Return 20,694.39 (3.3) 2.0 39.5

All Share Index 3,506.35 (3.2) 2.0 35.5

Banks/Financial Svcs. 3,384.24 (4.1) 2.0 38.5

Industrials 4,619.53 (3.0) 1.3 32.0

Transportation 2,336.34 (1.4) 1.7 25.7

Real Estate 2,891.77 (3.7) 0.3 48.1

Insurance 4,089.39 (2.1) (0.4) 75.0

Telecoms 1,719.00 (1.9) 9.5 18.2

Consumer 7,512.32 (0.9) 1.0 26.3

Al Rayan Islamic Index 4,695.65 (3.1) 0.1 54.7

Market Indices Weekly Index Performance

Regional Indices Close WTD% MTD% YTD% Weekly Exchange

Traded Value ($ mn) Exchange Mkt.

Cap. ($ mn) TTM P/E** P/B** Dividend Yield

Qatar (QE)* 13,874.97 (3.3) 2.0 33.7 745.00 202,996.2 17.4 2.3 3.6

Dubai 5,054.25 (0.9) (0.2) 50.0 1,324.59 97,606.7 21.0 1.9 1.9

Abu Dhabi 5,127.60 (2.0) 0.9 19.5 344.49 139,575.9 14.6 1.8 3.2

Saudi Arabia# 10,720.51 (3.1) (3.5) 25.6 9,874.61 583,910.1 20.6 2.6 2.6

Kuwait 7,655.57 0.8 3.0 1.4 545.58 113,812.4 19.5 1.2 3.6

Oman 7,458.90 (0.6) 1.2 9.1 77.53 27,436.7 11.3 1.7 3.7

Bahrain 1,469.01 0.1 (0.2) 17.6 21.13 54,359.6 11.4 1.0 4.6

Source: Bloomberg, country exchanges and Zawya (** Trailing Twelve Months; * Value traded ($ mn) do not include special trades, if any) (#Data as of September 24, 2014)

14,136.18

14,117.77

14,006.46 13,932.30

13,874.97

0

9,000,000

18,000,000

13,700

13,975

14,250

21-Sep 22-Sep 23-Sep 24-Sep 25-Sep

Volume QE Index

0.8%0.1%

(0.6%) (0.9%)

(2.0%)

(3.1%) (3.3%)(4.5%)

(3.0%)

(1.5%)

0.0%

1.5%

Kuw

ait

Bah

rain

Om

an

Dubai

Abu D

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E)*

Page 2 of 5

News

Economic News

MDPS: Monthly Industrial PPI stands at 167.2 in July, drops 6.3% YoY – Qatar’s Ministry of Development Planning &

Statistics (MDPS) has released the monthly Producer Price Index (PPI) of the Industrial sector which covers Mining, Electricity & Water and Manufacturing activities for July 2014. The PPI for July 2014 stands at 167.2, which showed a decrease of 2.4% over the PPI of June 2014, and a YoY decrease of 6.3%. The mining group PPI (with a weight of 77%) showed a MoM decline of 3.2% as crude petroleum and natural gas fell by 3.2%. The manufacturing group PPI (with a weight of 21%) showed a MoM rise of 1.3%. The MoM increase is explained by the combined effect of increasing prices seen in dairy products (by 3.0%), refined petroleum products (2.1%), cement & other non-metallic products (0.6%), beverages (0.4%) and basic chemicals (0.1%). On the other hand, decreasing prices were seen in grain mill and other products (0.9%). The electricity & water group PPI (representing about 2.0% weight) has remained stable in July 2014 (-0.4% MoM). On a YoY basis, the mining group PPI showed a drop of 6.4%, primarily due to the price decrease seen in crude petroleum and natural gas group by the same percentage. The manufacturing group PPI showed a YoY decline of 6.0% in July 2014. The major groups which explain this price fall include: refined petroleum products (by 9.2%), basic metals (2.9%), beverages (2.2%) and basic chemicals (0.1%). However, price rises are noticed in dairy products (3.8%), cement & other non-metallic products (by 2.4%) and grain mill and other products (0.2%). The electricity & water PPI showed a decrease of 4.6%, resulting from the effect of price fall seen in water (4.9%) and electricity (4.4%). (QSA)

Market & Corporate News

Qatar Exchange on index methodology – The Qatar

Exchange (QE) would like to announce that given the changes in the market dynamics since the inclusion of Qatar into the MSCI and S&P Dow Jones Emerging Market indices, starting October 2014, its management will enter into consultation with the market participants and issuers on improving liquidity in the market. Following those consultations, the Index Committee chaired by Dr. Saif Saeed Al Suwaidi, comprising independent members, brokers and representatives of listed companies along with an observer representing the Qatar Financial Markets Authority (QFMA) will review the index methodology applied to QE indices and publish during November, 2014 any changes that will be effective from January 1, 2015. The QE highlighted that there was no change in the index review announced on September 17. As announced the review will be applied as of October 1 and until the implementation of adopted changes on the methodology. (Bloomberg)

S&P Dow Jones upgrades set to put QE on a higher orbit –

Standard & Poor’s Dow Jones will place the Qatar Exchange (QE) in a higher orbit of ‘emerging market’ from Monday, following the local bourse’s upgrade from frontier status. S&P’s decision to re-classify Qatar as an emerging market was announced last October following a consultation with clients; and it comes after similar moves by Morgan Stanley Composite Index (MSCI). S&P Dow Jones said the weight of the Qatari market in the international BMI index for emerging markets would be 0.9%. QE’s CEO Rashid bin Ali Al-Mansoori termed this announcement as a positive step that would improve the visibility and performance of the stock market in Qatar. (Gulf-Times.com)

BRES to sell stake in QD-SBG, QD-CPC to QDREIC – Barwa

Real Estate Company (BRES) has entered into two share sale & purchase agreements with Qatari Diar Real Estate Investment Company (QDREIC). The agreements are related to the sale of its total shareholding in QD-SBG Construction and QD-CPC Industries (consisting of 21.5% shareholding in both companies), for a total sale price of QR69mn. The transaction is subject to satisfying all regulatory requirements, government approvals, and other customary closing conditions. (QE)

Al-Sharq: QCB raises combined loans ceiling – Al-Sharq

reported that the Qatar Central Bank (QCB) has raised the cap of combined debt loaned to single borrower to QR8bn vs. QR3bn. (Bloomberg)

MARK postpones a stake acquisition of Libyan bank –

Masraf Al Rayan (MARK), during its Board of Directors meeting held on Monday 22 Sept 2014, decided, among other issues, to put on hold all steps or arrangements concerning acquisition of a stake in a bank in Libya until further notice. We believe the company may reconsider its decision if the situation on the ground improves. (QE)

GISS received two super medium helicopters – Gulf

International Services (GIIS) announce the delivery of the first two AW189 super medium helicopters in offshore configuration to its wholly-owned subsidiary, Gulf Helicopters. Gulf Helicopters has a total of fifteen AW189s on order and the delivery of the whole batch of aircraft is now scheduled to be completed by 2017. (QE)

IQCD completes CO2 recovery plant – Industries Qatar

(IQCD) announced that the construction work at the QR145.5mn carbon dioxide (CO2) recovery plant in its fuel additive joint venture, Qafac has been completed. The plant is the largest of its kind in the world, which is designed to capture over 500 MT per day of CO2 and utilize it for methanol production. The plant is expected to not only reduce Qafac’s greenhouse gas emissions, but also boost the group’s production of methanol by around 46,000 MT per annum. Meanwhile, IQCD confirmed that it has put its Al Sejeel Petrochemical Complex project on hold and is instead studying a new downstream petrochemical project, which is expected to yield better economic returns. (QE)

IQCD announces changes to BoD – Industries Qatar (IQCD)

has issued a statement regarding the changes made by Qatar Petroleum to IQCD’s board of directors and the executive management. With effect from September 17, 2014, the Board of Directors of Industries Qatar are as follows: HE the Minister of Energy & Industry Dr. Mohammed bin Saleh, Chairman of the board. HE the Minister of Economy & Commerce Sheikh Ahmed bin Jassim Al-Thani has been appointed as the Vice Chairman. The board of directors also includes HE the Minister of Finance Ali Shareef Al-Emadi, HE Dr. Ibrahim Al-Ibrahim, Hamad Rashid Al-Mohannadi and Nasser Khalil Al-Jaidah as members, along with Saad Sherida Al-Kaabi as a member and Managing Director. (IQCD Press Release, QE)

QNBK to disclose results on October 12 – QNB Group

(QNBK) will disclose financial statements for the period ending September 30, 2014 on October 12, 2014. (QE)

Page 3 of 5

Qatar Exchange

Top Gainers Top Decliners

Source: Qatar Exchange (QE),( * Only two stocks gained during this week)

Source: Qatar Exchange (QE)

Most Active Shares by Value (QR Million) Most Active Shares by Volume (Million)

Source: Qatar Exchange (QE)

Source: Qatar Exchange (QE)

Investor Trading Percentage to Total Value Traded Net Traded Value by Nationality (QR Million)

Source: Qatar Exchange (QE)

Source: Qatar Exchange (QE)

1.4%

0.4%

0.0%

0.5%

1.0%

1.5%

Islamic Holding Group Gulf Warehousing

-5.9% -5.8%

-5.2%

-4.7%-4.3%

-7.5%

-5.0%

-2.5%

0.0%

Doha Bank Qatar Islamic Bank

Dlala Holding QNB Group Qatar International Islamic Bank

537.5

245.4212.9

183.7

147.9

0.0

200.0

400.0

600.0

Ezdan Real Estate

Masraf Al Rayan

QNB Group Industries Qatar

Doha Bank

27.1

5.1 4.6 4.4

2.5

0.0

10.0

20.0

30.0

Ezdan Real Estate

Vodafone Qatar United Development

Masraf Al Rayan Al Khaliji

0%

20%

40%

60%

80%

100%

Buy Sell

44.72%35.37%

21.81%28.22%

12.77%11.50%

20.71% 24.91%

Qatari Individuals Qatari Institutions

Non-Qatari Individuals Non-Qatari Institutions

1,806

909

1,726

988

80

(80)

(500) - 500 1,000 1,500 2,000

Qatari

Non-Qatari

Net Investment Total Sold Total Bought

Page 4 of 5

TECHNICAL ANALYSIS OF THE QE INDEX

Source: Bloomberg

The QE Index snapped its three-week winning streak and ended on a bearish note declining around 476 points, as traders offloaded their positions. It was a

bad week for the bulls with the index retreating on every single trading session and breaching many important psychological supports, along with the 21-day

moving average. This has changed the underlying sentiment to bearish, considering the current scenario. The next defendable support zone for the index is

seen near the 13,750.0- 13,800.0 levels. It is the same zone that had acted as support as well as resistance on several occasions in the past, and the index

may head there this week. Meanwhile, the index may try to attract buying interest near these levels. However, any sustained weakness below the 13,750.0-

13,800.0 levels may lead to heavy selling and drag the index further down toward the 13,600.0 mark. On the flip side, the index faces its immediate

resistance of the 21-day moving average followed by the 14,000.0 psychological level. The outlook may turn positive if the index manages to close above

these levels. Meanwhile, the RSI has shown a negative divergence, while the MACD is moving away from the signal line in a bearish manner, indicating

weakness.

DEFINITIONS OF KEY TERMS USED IN TECHNICAL ANALYSIS

RSI (Relative Strength Index) indicator – RSI is a momentum oscillator that measures the speed and change of price movements. The RSI oscillates between 0 to 100. The index is deemed to be overbought once the RSI approaches the 70 level, indicating that a correction is likely. On the other hand, if the RSI approaches 30, it is an indication that the index may be getting oversold and therefore likely to bounce back.

MACD (Moving Average Convergence Divergence) indicator – The indicator consists of the MACD line and a signal line. The divergence or the convergence of the MACD line with the signal line indicates the strength in the momentum during the uptrend or downtrend, as the case may be. When the MACD crosses the signal line from below and trades above it, it gives a positive indication. The reverse is the situation for a bearish trend.

Candlestick chart – A candlestick chart is a price chart that displays the high, low, open, and close for a security. The ‘body’ of the chart is portion between the open and close price, while the high and low intraday movements form the ‘shadow’. The candlestick may represent any time frame. We use a one-day candlestick chart (every candlestick represents one trading day) in our analysis.

Doji candlestick pattern – A Doji candlestick is formed when a security's open and close are practically equal. The pattern indicates indecisiveness, and

based on preceding price actions and future confirmation, may indicate a bullish or bearish trend reversal.

Shooting Star/Inverted Hammer candlestick patterns – These candlestick patterns have a small real body (open price and close price are near to each

other), and a long upper shadow (large intraday movement on the upside). The Shooting Star is a bearish reversal pattern that forms after a rally. The

Inverted Hammer looks exactly like a Shooting Star, but forms after a downtrend. Inverted Hammers represent a potential bullish trend reversal.

Contacts

Saugata Sarkar Abdullah Amin, CFA Shahan Keushgerian

Head of Research Senior Research Analyst Senior Research Analyst

Tel: (+974) 4476 6534 Tel: (+974) 4476 6569 Tel: (+974) 4476 6509 saugata.sarkar@qnbfs.com.qa abdullah.amin@qnbfs.com.qa shahan.keushgerian@qnbfs.com.qa

Sahbi Kasraoui Ahmed Al-Khoudary QNB Financial Services SPC Manager – HNWI Head of Sales Trading – Institutional Contact Center: (+974) 4476 6666

Tel: (+974) 4476 6544 Tel: (+974) 4476 6548 PO Box 24025 sahbi.alkasraoui@qnbfs.com.qa ahmed.alkhoudary@qnbfs.com.qa Doha, Qatar

DISCLAIMER: This publication has been prepared by QNB Financial Services SPC (“QNBFS”) a wholly-owned subsidiary of Qatar National Bank (“QNB”). QNBFS is regulated by the Qatar Financial Markets Authority and the Qatar Exchange; QNB is regulated by the Qatar Central Bank. This publication expresses the views and opinions of QNBFS at a given time only. It is not an offer, promotion or recommendation to buy or sell securities or other investments, nor is it intended to constitute legal, tax, accounting, or financial advice. We therefore strongly advise potential investors to seek independent professional advice before making any investment decision. Although the information in this report has been obtained from sources that QNBFS believes to be reliable, we have not independently verified such information and it may not be accurate or complete. While this publication has been prepared with the utmost degree of care by our analysts, QNBFS does not make any representations warranties as to the accuracy and completeness of the information it may contain, and declines any liability in that respect. QNBFS reserves the right to amend the views and opinions expressed in this publication at any time. It may also express viewpoints or make investment decisions that differ significantly from, or even contradict, the views and opinions included in this report.

COPYRIGHT: No part of this document may be reproduced without the explicit written permission of QNBFS.

Page 5 of 5

Source: Bloomberg

Company Name

Price

(September 25)

% Change

5-Day

% Change

YTD

Market Cap.

QR Million TTM P/E P/B Div. Yield

Qatar National Bank 203.00 (4.69) 18.02 142,045 14.4 2.7 3.4

Qatar Islamic Bank 113.00 (5.83) 63.77 26,701 18.8 2.3 3.5

Commercial Bank of Qatar 71.40 (3.25) 21.02 21,201 13.2 1.3 2.3

Doha Bank 58.90 (5.91) 1.20 15,218 10.7 1.4 7.6

Al Ahli Bank 53.50 (0.93) 26.45 8,838 15.8 2.3 N/A

Qatar International Islamic Bank 90.50 (4.33) 46.68 13,699 17.4 2.7 4.1

Masraf Al Rayan 55.90 (2.61) 78.59 41,925 23.5 4.1 2.7

Al Khaliji Bank 22.21 (3.01) 11.11 7,996 15.4 1.4 4.5

National Leasing 28.00 (0.36) (7.13) 1,385 33.3 1.1 5.4

Dlala Holding 61.60 (5.23) 178.73 1,368 17.4 5.0 N/A

Qatar & Oman Investment 17.90 (2.56) 42.97 564 22.9 1.7 3.4

Islamic Holding Group 119.60 1.44 160.00 478 39.2 8.0 1.4

Banking and Financial Services 281,418

Zad Holding 90.00 (0.22) 29.50 1,177 10.8 1.5 3.9

Qatar German Co. for Medical Devices 13.85 (1.00) 0.00 160 N/M 0.9 N/A

Salam International Investment 19.98 (1.04) 53.57 2,284 16.0 1.4 5.0

Medicare Group 130.50 0.00 148.57 3,673 29.3 4.5 1.4

Qatar Cinema & Film Distribution 48.50 (1.52) 20.95 277 23.7 2.0 N/A

Qatar Fuel 224.10 (0.84) 2.54 18,927 15.9 3.1 3.4

Qatar Meat and Livestock 63.90 (1.69) 23.60 1,150 20.5 4.7 3.3

Al Meera Consumer Goods 182.50 (2.61) 36.91 3,650 14.1 2.8 4.4

Consumer Goods and Services 31,299

Qatar Industrial Manufacturing 47.65 (1.75) 13.00 2,264 11.2 1.5 N/A

Qatar National Cement 142.50 (2.66) 19.75 6,997 16.0 2.8 4.2

Industries Qatar 191.00 (3.54) 13.08 115,555 18.4 3.8 5.8

Qatari Investors Group 58.50 (3.78) 33.87 7,273 31.8 3.4 1.3

Qatar Electricity and Water 189.00 (3.82) 14.29 20,790 14.2 3.5 3.6

Mannai Corp. 114.00 (1.55) 26.81 5,201 9.2 2.7 4.8

Aamal 15.79 (2.29) 5.27 9,474 17.7 1.3 N/A

Gulf International Services 124.60 (1.11) 155.33 23,156 27.3 7.1 1.3

Mesaieed Petrochemical Holding 33.55 (1.32) N/A 42,149 N/A 3.1 1.0

Industrials 232,859

Qatar Insurance 98.20 (1.70) 84.59 15,765 16.1 3.0 2.0

Doha Insurance 34.50 (4.17) 38.00 1,725 12.0 1.7 5.8

Qatar General Insurance & Reinsurance 46.05 (3.46) 15.37 3,186 2.2 0.7 2.7

Al Khaleej Takaful Insurance 47.40 0.00 68.82 1,052 12.3 1.6 N/A

Qatar Islamic Insurance 88.00 (3.19) 51.99 1,320 15.8 4.6 4.3

Insurance 23,048

United Development 29.00 (3.17) 34.67 10,269 20.7 1.0 3.3

Barw a Real Estate 40.90 (4.10) 37.25 15,915 12.2 1.2 4.9

Ezdan Real Estate 19.77 (1.10) 16.29 52,440 40.6 1.8 1.6

Mazaya Qatar Real Estate Development 24.20 (2.81) 116.46 2,420 13.6 2.0 3.1

Real Estate 81,044

Qatar Telecom 137.90 (1.22) 0.51 44,172 17.6 1.8 2.9

Vodafone Qatar 21.54 (3.84) 101.12 18,210 N/M 3.2 0.8

Telecoms 62,382

Qatar Navigation (Milaha) 96.30 (0.72) 16.02 11,029 12.2 0.9 5.2

Gulf Warehousing 52.00 0.39 25.30 2,473 21.1 3.1 2.9

Qatar Gas Transport (Nakilat) 24.45 (2.16) 20.74 13,692 16.6 3.7 4.5

Transportation 27,194

Qatar Exchange 739,243