Equity Research Increases in Q3 2010


Twenty-five brokers published 288 research notes on 133 companies during 3Q10, compared to the 270 research notes on 110 companies published in 2Q10, according to a recent report by Kuwait Financial Centre “Markaz” on GCC Equity Research Statistics... During this quarter, 19% of all GCC companies received research coverage, representing 71% of the total market cap. Saudi Arabia, which continued to attract the most attention, accounted for 45% of research notes and 40% of the companies covered. A wave of optimism continued in GCC markets, with 55% “Buy” calls, 36% “Hold” calls, and 10% “Sell” calls.

The market cap of researched companies in Saudi Arabia accounted for 90% of the domestic market capitalization. This was followed by UAE (63%), Kuwait (59%), Oman (58%), Qatar (47%) and Bahrain (41%). The proportion of “Buy” ratings in Saudi Arabia increased to 50% in 3Q10 from 45% in 2Q10.

Qatar remained the most preferred equity market, with all 19 research notes during 3Q10 receiving “Buy” ratings. On the flip side, Kuwait recorded the maximum sell ratings. The market accounted for 39% of the 28 “Sell” ratings during the quarter. Furthermore, 33% of the research notes covered in Kuwait were assigned “Sell” ratings, higher than other GCC markets. In Bahrain, the contribution of “Buy” ratings fell to 43% in 3Q10 from 50% in 2Q10.

Etihad Etisalat Co. remained the most tracked stock with eight research notes during the quarter. National Bank of Abu Dhabi (NBAD) also witnessed the highest research notes (8), followed by Emirates Integrated Telecommunications Co. (7), and Tasnee and Abu Dhabi Commercial Bank (6 notes each). All research notes on NBAD were assigned “Buy” ratings, while 7 of the 8 research notes on Etihad Etisalat Co. received “Buy” ratings. This was followed by Qatar Electricity and Water Co. (6), Tasnee (5) and SABIC (4).

The banking sector continued to dominate the research coverage space, accounting for 26% of total research notes in 3Q10. The sector also received maximum “Buy” calls. Of the 157 “Buy” calls, 25% belonged to the banking sector. Incidentally, the sector also accounted for 32% of total “Sell” ratings in 3Q10, the highest among other sectors. Asset Management and Custody Banks as well as Specialized Finance companies (accounting for 6 of the 9 firms covered) were assigned “Sell” ratings.

About Kuwait Financial Centre “Markaz”

Kuwait Financial Centre S.A.K. 'Markaz', with total assets under management of over KD928 million (USD 3.19 billion) as of June 30, 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.