ï‚· Q3 earnings beat mainly driven by international operations, with flat
earnings in Qatar (flat earnings and revenues y/y) as low CoR and
strong credit growth (+14.2% y/y) cancelled out very substantial NIM
compression (40 bps).
ï‚· We see no room for acquisitions without capital strengthening now
that CET1 has tightened to 11.8%, whilst EPS FY 17e slows down.
ï‚· Net foreign asset position of banks has deteriorated sharply (-119% of
net international reserves) with c.40% of funding coming from outside.
ï‚· Meanwhile, IMF now expects fiscal deficit at 7.6% in 2016 and >10% in
FY17e against the backdrop of lowered real GDP growth of 2.6%.
ï‚· Limited upside with the stock trading in line with 10-YR historical
average (P/E, P/B) ─ cut to Hold from Buy and reduce TP to QAR 163.0
from QAR 179.8, while remove from Core Buys.​
Established in 2007, Arqaam Capital is a specialist emerging markets investment bank, bringing regional and international product offerings to the emerging markets. Arqaam Capital combines international best practice with expertise in the markets in which we operate. Our primary role is to provide financial intermediation and create investment opportunities for frontier and emerging markets investors looking to invest in their own markets and abroad, as well as international investors seeking opportunities in target frontier and emerging markets. Arqaam Capital is headquartered in the Dubai International Financial Centre (DIFC), with additional offices in Libya, Lebanon, Egypt, and South Africa.
Arqaam Capital's research platform provides the largest coverage footprint of MENA equities and one of the largest on the African continent with a total of 300 stocks under coverage. Arqaam Capital is ranked as one of the leading research providers in the region - a reflection of its broad coverage universe, its in-depth and high quality research, as well the compelling investment ideas that the team generates. The analysts closely analyze their sectors and issue in-depth company and sector research while the strategy team connects the micro with the macro, focusing on index analysis, macroeconomics and strategy research.
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