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Market Review and Outlook QSE Index and Volume The Stock Exchange (QSE) Index decreased by 81.13 points,

or 0.8% during the week to close at 9,885.22. Market 10,000 6,000,000 capitalization decreased by 0.9% to QR532.7 billion (bn) versus QR537.4bn at the end of the previous week. Of the 44 listed companies, 11 companies ended the week higher, while 32 fell 9,877.75 9,885.22

and only 1 remained unchanged. Dlala Brokerage and 9,850 9,842.85 9,867.94 3,000,000 Investments Holding Co. (DBIS) was the best performing stock for the week with a gain of 11.1% on 1.6 million (mn) shares 9,816.75 traded. On the other hand, Mannai Corp. (MCCS) was the worst performing stock with a decline of 5.1% on 4,321 shares traded only. 9,700 0 26- Jun 27- Jun 28- Jun 29- Jun 30- Jun Ezdan Holding Group (ERES), Industries Qatar (IQCD) and QNB Volume QSE Index Group (QNBK) were the primary contributors to the weekly index Week ended June Week ended June Market Indicators Chg. % loss. ERES was the biggest contributor to the index’s weekly 30 , 2016 23 , 2016 decline, erasing 32.4 points from the index. IQCD was the second Value Traded (QR mn) 602.3 578.3 4.2 biggest contributor to the loss, shedding 24.5 points from the index. Moreover, QNBK deleted 10.8 points from the index. On Exch. Market Cap. (QR mn) 532,704.2 537,365.7 (0.9) the other hand, Qatar Insurance Co. (QATI) added 11.9 to the Volume (mn) 18.7 15.5 20.4 index. Number of Transactions 10,419 9,535 9.3 Companies Traded 43 43 0.0 Trading value during the week increased by 4.2% to reach QR602.3mn versus QR578.3mn in the prior week. The and Market Breadth 11:32 29:10 –

Financial Services sector led the trading value during the week, Market Indices Close WTD% MTD% YTD% accounting for 36.9% of the total trading value. The Industrials Total Return 15,993.64 (0.8) 3.6 (1.3) sector was the second biggest contributor to the overall trading ALL Share Index 2,749.89 (0.8) 2.8 (1.0) value, accounting for 25.3% of the total trading value. Gulf International Services (GISS) was the top value traded stock Banks and 2,666.32 (0.4) 2.8 (5.0) during the week with total traded value of QR64.8mn. Industrials 3,021.90 (1.8) 1.5 (5.2) Transportation 2,470.92 (0.1) (0.2) 1.6 Trading volume increased by 20.4% to reach 18.7mn shares Real Estate 2,488.67 (1.8) 6.5 6.7 versus 15.5mn shares in the prior week. The number of Insurance 4,070.80 2.1 1.5 0.9 transactions increased by 9.3% to reach 10,419 transactions Telecoms 1,099.85 (1.0) 5.6 11.5 versus 9,535 transactions in the prior week. The Banks and Consumer Goods & Services 6,408.48 0.2 (0.3) 6.8 Financial Services sector led the trading volume, accounting for Al Rayan Islamic Index 3,822.31 (1.3) 2.3 (0.9) 33.2%, followed by the Industrials sector, which accounted for Market Indices 19.7% of the overall trading volume. Vodafone Qatar (VFQS) was Weekly Index Performance the top volume traded stock during the week with total traded volume of 2.5mn shares. 1.0% 0.0% Foreign institutions remained bullish during the week with net 0.0% buying of QR79.0mn vs. buying of QR40.3mn in the prior week. (0.1%) (0.3%) Qatari institutions turned bearish with net selling of QR30.1mn (1.0%) vs. net buying of QR22.1mn the week before. Foreign retail (0.8%) (0.8%) (0.8%) investors remained bearish for the week with net selling of (2.0%) (1.7%) QR13.6mn vs. net selling of QR8.4mn in the prior week. Qatari

retail investors remained bearish with net selling of QR35.3mn Dubai

vs. net selling of QR54.0mn the week before. In 2016 YTD, foreign Om an Kuwait institutions bought (on a net basis) ~$455mn worth of Qatari Bah rain

equities. AbuDh abi SaudiArabia Qatar(QSE)*

Weekly Exchange Exchange Mkt. Regional Indices Close WTD% MTD% YTD% TTM P/E** P/B** Dividend Yield Traded Value ($ mn) Cap. ($ mn) Qatar (QSE)* 9,885.22 (0.8) 3.6 (5.2) 165.41 146,280.6 13.6 1.5 4.1 Dubai 3,311.10 (1.7) (0.1) 5.1 488.42 88,083.4# 11.1 1.2 4.2 Abu Dhabi 4,497.64 (0.0) 5.8 4.4 157.81 117,669.2 11.9 1.5 5.4 Saudi Arabia# 6,500.42 (0.8) 0.8 (6.0) 5,544.17 400,768.9 15.0 1.5 3.8 Kuwait 5,364.57 (0.8) (0.7) (4.5) 169.74 80,674.8 18.3 1.0 4.4 Oman 5,777.31 (0.3) (0.6) 6.9 49.79 22,970.8 11.0 1.3 4.5 Bahrain 1,118.37 (0.1) 0.6 (8.0) 8.02 17,659.9 9.3 0.4 4.9 Source: Bloomberg, country exchanges and Zawya (** Trailing Twelve Months; * Value traded ($ mn) do not include special trades, if any; #Data as of June 29 , 2016)

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News

Economic & Corporate News over the management and operation of some of the areas within  QNBFS: Brexit-related currency exposures minimal for Qatar banks its concession in the Mesaieed Industrial City to the Economic – GBP/Euro F/X fluctuations is expected have negligible impact Zones Company Qatar (Manateq). The handover, which will take on Qatari banks’ financials. As far as GBP is concerned, Qatari effect on January 1, 2017, includes the Light Industries Area banks have negligible net exposures (as a % of shareholders’ (east), Light Industries Area (west), Temporary Storage Area for equity). However, in terms of banks under coverage, CBQK could gabbro and raw materials, Concrete Zone, and the Medium actually benefit from a further depreciation in the Euro. Near- Industries Area. (Gulf-Times.com) term volatility in stock prices could be driven by subdued  S&P affirms 'AA' ratings on QP – S&P Global Ratings affirmed its sentiment, lower oil prices and EM risk-off trade (strengthening 'AA' foreign and local currency long-term issuer credit ratings on $). However, we see little direct impact on company financials due Qatar Petroleum (QP). The outlook is stable. (Bloomberg) to BREXIT. The impending FTSE EM Index inclusion (first tranche  RasGas signs new LNG deal with EDF to supply 2mn tons a year – in September 2016) remains the next major catalyst for the Qatari Ras Laffan Liquefied Natural Gas Company - 3 (RL 3) has entered market (QNBFS Research) into a new liquefied natural gas (LNG) sales and purchase  QNB Group to disclose semi-annual financials on July 12 – QNB agreement (SPA) with French energy company EDF, under which Group (QNBK) has announced to disclose the reviewed financial RasGas will deliver up to 2mn tons a year to EDF’s new terminal reports for the period ending June 30, 2016 on July 12, 2016. in Dunkerque, France from 2017. This agreement complements (QSE) three existing long-term SPAs between RasGas ventures and EDF  QGTS to disclose semi-annual financials on July 13 – Qatar Gas group subsidiaries for delivery of up to 4.6mn tons per year to Transport Company (QGTS) has announced to disclose the Edison in Italy and up 3.5mn tons per year to EDF Trading in reviewed financial reports for the period ending June 30, 2016 on Belgium. (Gulf-Times.com) July 13, 2016. (QSE)  Links Group: Qatar’s retail market to grow at 9.8% to reach $284bn  QEWS board meeting for approval of semi-annual financials on July in 2018 – Links Group, a provider of commercial facilitation and 13 – Qatar Electricity and Water Company (QEWS) announced its advisory services, revealed in its recent report that Qatar’s Board Meeting to approve the reviewed financial reports for the economic diversification strategy continues to create foreign period ending June 30, 2016 on July 13, 2016. (QSE) investment opportunities across its burgeoning retail market,  DHBK to disclose semi-annual financials on July 20 – despite sustained low oil prices. The group added in the report (DHBK) has announced to disclose the reviewed financial reports that Qatar’s retail market is expected to grow at a compound for the period ending June 30, 2016 on July 20, 2016. (QSE) annual growth rate (CAGR) of 9.8% reaching $284.5bn in 2018, the fastest in the GCC region. The report said the government has  VFQS to disclose 1Q2016 financials on July 26 – Vodafone Qatar ambitious plans to develop its retail landscape to meet rising (VFQS) has announced that it will disclose the reviewed financial demand from the growing population’s high-level of personal statements for 1Q2016 on July 26, 2016.. (QSE) consumption, adding that the key projects already underway  QATI to disclose semi-annual financials on July 19 – Qatar include Mall of Qatar, Doha Festival City and Place Vendome. Insurance Company (QATI) has announced that it will disclose the Links Group Founding Partner John Martin St Valery said, reviewed financial statements for the period ending June 30, 2016 “Continued low oil prices mean Qatar is seeing its state revenues on July 19, 2016. (QSE) decline. As such, the country is actively seeking foreign and  QIIK to disclose semi-annual financials on July 19 – Qatar private sector investments. The development of the retail sector International Islamic Bank (QIIK) has announced that it will will help to shore up its economy and present excellent disclose the reviewed financial statements for the period ending opportunities for foreign investors. In 2015, the country was June 30, 2016 on July 19, 2016. (QSE) ranked as the fourth most attractive retail market, placing it first  MCCS announces completion of majority stake acquisition in Gfi in the Middle East.” (Qatar-Tribune) Informatique – Mannai Corporation (MCCS) has announced the  Tasweeq is integrated into Qatar Petroleum – Qatar Petroleum acquisition of additional shares in Gfi Informatique representing a (QP) announced the integration of Tasweeq into its family, which, stake of c. 10.4% of the share capital of that company. This means is part of ongoing efforts to become one of the leading national oil that MCCS has completed its acquisition of 51% of the share companies in the world and deliver superior integrated products capital and voting rights of Gfi Informatique (on fully diluted and services across the entire oil & gas value chain. QP said the basis). (QSE) integration would involve transitioning Tasweeq’s employees,  QP-Total to operate Al Shaheen offshore oil field – Qatar’s giant Al assets and customer relationships into the QP organization before Shaheen offshore oil field, with a production capacity of 300,000 the year-end. (Gulf-Times.com) barrels per day, will be jointly developed and operated by a new  EY: Doha hotel rooms yield drops 19.3% YoY to $159 in five 70:30 joint venture of Qatar Petroleum (QP) and Total from 2017. months – According to Ernst and Young (EY), government In this regard, ‘North Oil Company has been established, where spending cut induced impact on business tourism has led Qatar’s the partners will invest over $2bn during 2017-22 to further hospitality sector report a double-digit year-on-year (YoY) develop Al Shaheen, which is located in Qatari waters 80 decline in hotel rooms’ yield in dollar terms during January-May. kilometers North of Ras Laffan. Beginning production in 1994, the EY, in its Middle East Hotel Benchmark Survey, said that the Doha existing development consists of 30 platforms and 300 wells. hotels’ rooms yield plunged 19.3% YoY to $159 in the first five Meanwhile, QP assured employees at the Al-Shaheen oilfield that months on 14.9% plunge in the average room rate to $224 and their employment is not at risk, though a new joint venture will 4% in occupancy to 70%. EY said, “The drop in occupancy may be operate and manage it, following the expiry of the present attributed to government spending cuts that have affected contract with Maersk Oil in 2017. (Gulf-Times.com) business tourism, which constitutes about 70% of Doha’s hotel  QP to hand over management of some areas at Mesaieed Industrial demand.” (Gulf-Times.com) City to Manateq – As part of its strategy to focus on its core business in the oil & gas industry, Qatar Petroleum (QP) will hand

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Qatar Stock Exchange

Top Gainers Top Decliners

0.0% 12.0% 11.1%

8.3% - 2.0% 8.0%

- 3.1% - 2.9%

- 3.6% 4.3% - 4.0% - 3.6% 4.0% 2.8% 2.6%

- 5.1%

0.0% - 6.0% Dlala Holding Zad Holding Qatar Gene ral Al Ahli Bank Milaha Mannai Corp. National Leasing Qatari Investors Qatar Industr ial Mazaya Qatar Insurance & Group Manufacturing Reins urance

Source: Qatar Stock Exchange (QSE)

Source: Qatar Stock Exchange (QSE)

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

90.0 3.0

2.5 64.8 60.0 2.0 52.5 1.8 1.6 38.6 1.2 34.4 32.8 1.1 30.0 1.0

0.0 0.0 Gulf QNB Group Dlala Holding Industries Qatar Commercial Vodafone Qatar Gulf Dlala Holding Qatar Firs t Bank Ezdan Real International Bank of Qatar International Estate Services Services

Source: Qatar Stock Exchange (QSE) Source: Qatar Stock Exchange (QSE)

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

65 100% 18.64% 31.76% Non- Qatari 207 80% 15.67% 272 13.41% 60% 25.49% 20.50% 40% (65) 34.33% 40.20% 20% Qatari 396

0% 330 Buy Sell

(100) - 100 200 300 400 500 Qatari Individua ls Qatari Institutions

Non- Qatari Individuals Non- Qata ri Institutions Net Inves tm ent Total Sold Total Bought

Source: Qatar Stock Exchange (QSE) Source: Qatar Stock Exchange (QSE)

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TECHNICAL ANALYSIS OF THE QSE INDEX

Source: Bloomberg

The QSE Index moved sideways this week and closed down by 0.8% at 9,885.22 vs. the week before. Nothing has changed except the technical indicators became even more flat. Volumes have dropped significantly which might hamper possible upticks. We reiterate our resistance level at 10,500 points and support at 9,500 points respectively.

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 . 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.

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Price % Change % Change Market Cap. Company Name (Jun 30) WTD YTD QR Million TTM P/E P/B Div. Yield Qatar National Bank 140.00 (0.71) (4.00) 117,555 10.3 2.0 2.5 Qatar Islamic Bank 96.00 0.10 (10.03) 22,684 11.2 1.5 4.4 of Qatar 37.00 (0.40) (19.39) 12,085 11.3 0.9 8.1 Doha Bank 35.35 (0.98) (20.56) 9,133 7.7 1.0 8.5 Al Ahli Bank 40.70 2.78 (7.20) 7,766 12.1 1.8 3.8 Qatar International Islamic Bank 61.50 (2.69) (4.35) 9,309 11.7 1.8 6.5 Masraf Al Rayan 34.00 (0.15) (9.57) 25,500 12.2 2.2 5.1 Al Khalij Commercial Bank 16.11 (1.17) (10.35) 5,800 9.1 0.9 6.2 Qatar First Bank 11.39 (1.81) N/A 2,278 N/A N/A N/A National Leasing 17.45 (3.64) 23.76 863 N/A 0.9 2.9 Dlala Holding 24.42 11.05 32.07 694 N/A 2.0 N/A Qatar & Oman Investment 10.80 (0.92) (12.20) 340 25.7 1.1 5.6 Islamic Holding Group 62.00 (0.32) (21.22) 351 101.2 4.3 2.4 Banking and Financial Services 214,359 Zad Holding 90.40 8.26 6.60 1,183 12.3 1.4 4.4 Qatar German Co. for Medical Devices 11.20 (2.10) (18.37) 129 N/A 1.3 N/A Salam International Investment 11.20 (0.71) (5.25) 1,280 11.1 0.7 8.9 Medicare Group 93.00 (1.17) (22.05) 2,617 18.0 2.7 1.9 Qatar Cinema & Film Distribution 32.50 0.00 (4.41) 204 15.2 1.6 4.6 Qatar Fuel 151.10 (0.20) 10.64 13,783 11.0 2.1 5.0 Widam Food Co. 61.60 (0.48) 16.67 1,109 14.2 3.9 4.4 Al Meera Consumer Goods 211.20 0.67 (4.00) 4,224 25.6 3.4 4.3 Consumer Goods and Services 24,529 Qatar Industrial Manufacturing 41.20 (3.06) 3.39 1,958 10.6 1.4 7.3

Qatar National Cement 85.20 (1.39) (8.12) 5,062 11.0 1.7 4.3 Industries Qatar 98.00 (2.49) (11.79) 59,290 14.2 1.9 5.1 Qatari Investors Group 46.05 (3.56) 22.15 5,725 21.7 2.4 2.7 Qatar Electricity and Water 208.00 1.56 (3.88) 22,880 15.2 3.3 3.6 Mannai Corp. 85.00 (5.13) (10.81) 3,878 7.9 1.7 5.8 Aamal 12.89 (0.77) (7.86) 8,121 12.8 1.1 N/A Gulf International Services 36.60 (2.79) (28.93) 6,802 13.0 1.8 2.7 Mesaieed Petrochemical Holding 18.70 (2.04) (3.61) 23,493 19.7 1.7 3.7 Industrials 137,208 Qatar Insurance 73.70 2.08 6.00 17,772 14.6 2.7 2.9 Doha Insurance 19.60 (1.90) (6.67) 980 9.1 0.9 5.1 Qatar General Insurance & Reinsurance 49.00 4.26 5.48 4,288 4.8 0.7 2.8 Al Khaleej Takaful Insurance 24.40 1.58 (20.00) 623 20.7 1.1 4.1 Qatar Islamic Insurance 58.00 (1.69) (19.44) 870 12.3 2.9 6.9 Insurance 24,533 United Development 19.18 (1.13) (7.57) 6,791 9.9 0.6 7.8 Barw a Real Estate 33.00 (1.20) (17.50) 12,841 28.2 0.7 6.7 Ezdan Real Estate 17.93 (2.02) 12.77 47,559 27.2 1.5 2.8 Mazaya Qatar Real Estate Development 13.20 (2.94) (2.39) 1,455 13.0 1.0 N/A Real Estate 68,647 Ooredoo 88.40 (1.34) 17.87 28,316 11.4 1.3 3.4 Vodafone Qatar 10.58 0.09 (16.69) 8,944 N/A 1.8 2.0 Telecoms 37,261 Qatar Navigation (Milaha) 87.70 2.57 (7.68) 10,044 9.2 0.8 5.7 Gulf Warehousing 57.70 (1.37) 1.41 3,381 15.6 2.5 2.6 Qatar Gas Transport (Nakilat) 23.00 (1.58) (1.50) 12,743 12.8 3.9 5.4 Transportation 26,168 Qatar Exchange 532,704

Source: Bloomberg

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Contacts

Saugata Sarkar Shahan Keushgerian Zaid al-Nafoosi , CMT, CFTe Head of Research Senior Research Analyst Senior Research Analyst Tel: (+974) 4476 6534 Tel: (+974) 4476 6509 Tel: (+974) 4476 6535 [email protected] [email protected] [email protected]

QNB Financial Services Co. WLL One Person Company Contact Center: (+974) 4476 6666 PO Box 24025 Doha, Qatar

Disclaimer and Copyright Notice: This publication has been prepared by QNB Financial Services Co. WLL One Person Company (“QNBFS”) a wholly-owned subsidiary of QNB SAQ (“QNB”). QNBFS is regulated by the Qatar Financial Markets Authority and the Qatar Exchange QNB SAQ 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. QNBFS accepts no liability whatsoever for any direct or indirect losses arising from use of this report. Any investment decision should depend on the individual circumstances of the investor and be based on specifically engaged investment 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. QNBFS does not make any representations or warranties as to the accuracy and completeness of the information it may contain, and declines any liability in that respect. For reports dealing with Technical Analysis, expressed opinions and/or recommendations may be different or contrary to the opinions/recommendations of QNBFS Fundamental Research as a result of depending solely on the historical technical data (price and volume). 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. This report may not be reproduced in whole or in part without permission from QNBFS COPYRIGHT: No part of this document may be reproduced without the explicit written permission of QNBFS. Page 6 of 6