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2Q10 witnessed 270 research notes on 110 companies by 27 brokers in the GCC region, according to a recent report by Kuwait Financial Centre “Markaz” on GCC Equity Research Statistics... The coverage represents 16% coverage in terms of number of companies and 68% in terms of market cap. Saudi Arabia topped the list both in terms of research notes (43%) and number of companies (38%). Out of the total 270 research notes published during the period, the majority (145) were “Buy” calls, followed by 97 “Hold”, and 28 “Sell” recommendations indicating renewed optimism following the depressed valuations seen in May/June.
In terms of market capitalization, the companies covered in the period accounted for 68% of the total market capitalization of the GCC. Saudi researched companies accounted for 85% of the local market capitalization followed by Oman at 66%. However, Bahrain had the lowest coverage at 38%.
Qatar had the maximum proportion (76%) of research notes with “Buy” ratings and no “Sell” calls. This was followed by the UAE with (66%). The proportion of Buy ratings in Saudi Arabia fell to 45% during the period compared to 58% in the previous quarter. In Kuwait, 18% of research notes were rated as “Sell” while 59% were “Hold” calls, highlighting the lingering uncertainty and caution among investors towards the local market.
Top picks for the period included Etihad Etisalat Co, Savola Group and Abu Dhabi Commercial Bank with the highest coverage of 7 research notes each, followed by Saudi Telecom Co, National Bank of Abu Dhabi (with 6 notes each). Furthermore, all of Etihad Etisalat Co.’s research notes advocated a “Buy” recommendation. Air Arabia, First Gulf Bank and National Bank of Abu Dhabi each had 5 “Buy” recommendations as well.
Sector-wise, banking had the highest number of research notes (90 notes with 48 “Buy”, 8 “Sell” and 34 “Hold” recommendations) followed by Chemicals and Integrated Telecommunication Services with 20 notes each. The majority of “Sell” recommendations were in the banking industry, reflecting the high level of uncertainty in the sector.
Kuwait Financial Centre 'Markaz', with total assets under management of KD921 million as of March 31, 2010, was established in 1974 has become one of the leading asset management and investment banking institutions in the Arabian Gulf Region. Markaz was listed on the Kuwait Stock Exchange (KSE) in 1997.