QATAR TODAY TOP 2014 A SPOTLIGHT ON QATAR QATAR TODAY TOP 10 IS BACK Inc. 36 > QATAR TODAY > JUNE 2015 The Qatar Today TOP 10 TOP 10 RANKINGS FOR THE PERIOD STARTING YEAR 2010 AND ENDING 2014 The Top 10 rankings of the companies listed on the Qatar Exchange since the beginning was a dramatic month for Qatar Exchange. The stocks plunged during the last of 2010 were calculated based on seven week of May after MSCI index adjustments and news of arrests and criminal financial ratios in line with their respective probes at world football body FIFA. Other markets in the Middle East were also weighted average criteria. mostly negative. FIFA President Sepp Blatter secured re-election for a fifth term, partially easing concern that Doha might conceivably lose the tournament Widam Food Company 01 hosting rights. But just as we go to press, the news of Blatter’s resignation has Consumer Services Qatar’s stock exchange spluttering on the news, dropping 1.6%, with renewed concern that the country may lose the right to host the 2022 World Cup. Medicare Group 02 Through a tumultuous month, and the year 2015 heading in the same direction Health Care with no equilibrium seen in the near future, Qatar Today boldly goes back to its yearly process of reflecting on the achievements of the top performers of 2014 Masraf Al Rayan 03 at the Qatar Exchange. The annual ranking process, the Qatar Today Top 10, Financial recognizes those companies that have made a mark in their investors’ portfolio A SPOTLIGHT ON by showing resilience, immense growth and returns. This year we also honour Gulf International Services 04 the winners through the Qatar Today Business Excellence Awards. Consumer Services ALSHALL Economic Services, General Manager, Camille Raphael, the brains behind the formulation and the process of calculation of the Qatar Today Top Islamic Holding Group 05 10, feels that 2014 has proved to be an excellent year for the Qatar Exchange. Financial He says, “In May 2014, the QE was effectively upgraded by the global index compiler MSCI to emerging market status from frontier market, marking a new 06 Al Meera Consumer Goods Company era. Other initiatives leading up to the upgrade in the same year were the law Consumer Services QATAR allowing up to 49% ownership of non-Qatari investors in listed companies and other liquidity-enhancing measures taken by QE.” Industries Qatar The Qatar stock market gains were higher than its regional peers, ignoring the 07 Industrial regional negative sentiment caused by declining oil prices, registering a year-on- year increase in 2014 of 18.4% and outperforming most world stock exchanges, Qatar Fuel (Woqod) although some of higher gains were lost in the last months of the year. 08 Utilities According to Raphael, the calculation methodology chosen and used in the previous years was maintained for this year too. He says, “We just looked at Barwa Real Estate Co. historical performance from an investor’s perspective and we tried to answer 09 Consumer Services a simple logic: which company would have made an investor happier from a financial performance perspective had the investor bought one share of that National Leasing Holding Co. company at the beginning of 2010 and sold it at the end of 2014, along with any 10 additional shares received free of charge during this period.” Consumer Services He adds, “To the share market price appreciation, we added the amount of cash that the company distributed to its shareholders from its net profits over the period under study, as well as the attractiveness of the company’s shares Inc. based on total revenue and net profit growth, with the rationale that the value of a company (hence its share price) could potentially increase if the company’s sales revenues and net profits keep increasing extraordinarily year over year.” Weighted Average Criteria: The methodology also includes other measures of profitability such as Price Growth 20%, Dividend Yield 20%, Liquidity 20%, return on equity, which shows the size of the profits of a company in relation Net Profit Growth 10%, Total Revenue Growth 10%, to the amount the shareholders have invested in it, and return on assets, which Return on Equity 10%, and Return on Assets 10%. QATAR TODAY > JUNE 2015 > 37 QATAR TODAY TOP measures how effectively a company’s assets are put to use. Lastly, liquidity of the stock expressed in terms of average traded volume and number of transactions was also taken into consideration, given that if someone would like to exit 2014 the investment, he or she should be able to do so easily. “For calculations of price per share, cash distributions, net profit and total revenue growth, we looked at total shares held at the end of 2014 on the basis of the purchase of one share in that company at the beginning of 2010, and “We have thus the computations were made on a per share basis. This calculated the overall was done to offset any ownership dilution from corporate actions such as mergers and acquisitions, or capital top 10 rankings of increases,” says Raphael, “It should be noted that from time the companies listed to time, Qatar listed companies distribute cash to their on Qatar Exchange shareholders during the year, depending on their previous since the beginning year’s performance (what is referred to as cash dividends), of 2010 based on a as well as free share dividends.” The Qatar Today Top 10 methodology as formulated selection of financial by ALSHALL also measures all the financial and trading measurements, which performance as an average of the five-year period to may not be the only smooth-out extraordinary one-time performances, and ones used to assess assess the listed companies during a period of extended the attractiveness of a recent history. company.” “We have thus calculated the overall top 10 rankings of the companies listed on Qatar Exchange since the beginning of 2010 based on a selection of financial measurements, Camille Raphael which may not be the only ones used to assess the General Manager ALSHALL Economic Services attractiveness of a company. It is important to diversify the financial measurements to be used in conjunction with statement analysis to achieve a more objective approach in determining a company’s rank in the market as a whole,” explains Raphael. “Relevant to an investor’s point of view, the overall ranking of companies listed on the stock market was based on seven financial indicators in line with their respective weighted average criteria. The weights used are 20% each for price growth, dividend yield and liquidity, while net profit growth, total revenue growth, return on equity and return on assets are weighted 10% each.” “For this year, Al Meera Consumer Goods Company It is important to note that the rankings apply only to was included for the first time in our computations as it 40 companies out of the 43 currently listed on the Qatar satisfied the five-years criteria for selection,” he says. Exchange because only companies that have been listed on the Qatar Exchange since the beginning of 2009 and have at The Winners least five years of public disclosure on record were selected. This year’s top performers came from various industries. Seven of last year’s top 10 companies were included in this year’s rankings. Widam Food Company, maintained the top spot like last year, and took over Medicare Group, which ranked third top performer during 2013, took the second spot during 2014. Two companies came from the financial sector, namely Masraf Al Rayan and Islamic Holding Group, while another five companies, Widam Food Company, National Leasing Holding Co., Gulf International Services, Barwa Real Estate Co. and Al Meera Consumer Goods Co. Source: came from the consumer services sector. One company, Audited Financial Statements for the past five years Industries Qatar, came from the industrial sector while (2010-2014), Qatar Exchange and ALSHALL Calculations. Qatar Fuel (Woqod) came from the utilities sector. Finally, All the following calculations are carefully reviewed Medicare Group, which came from the healthcare sector based on financial analyses and statistical data. ALSHALL and ranked second place this year, was included in the Top cannot, however, be held liable for any errors or omissions 10 for the third time since the ranking process was started. appearing in the report nor does this constitute an offer or recommendation to invest in any of the listed securities. 38 > QATAR TODAY > JUNE 2015 Top 10 Companies in Top 10 Companies in Terms of Price Growth Terms of Dividend Yield TOP 10 RANKINGS FOR THE PERIOD TOP 10 RANKINGS FOR THE PERIOD STARTING YEAR 2010 AND ENDING 2014 STARTING YEAR 2010 AND ENDING 2014 Historical data of year-end share closing prices and share One major criterion in our methodology for determining a dividend distributions for the past five years were used to company’s overall ranking is the calculation of its dividend assess each company’s ranking in terms of price growth (or yield, which demonstrates how much a company pays average yearly portfolio value increase based on 1 share out dividends each year in relation to its average market purchased in each company at the beginning of 2010). capitalization. Doha Bank achieved the highest rank in terms Medicare Group took the number one spot in this category, of dividend yield. It is also evident that five of the top 10 moving up from second in last year’s ranking in terms of companies in terms of dividend yield came from the Financial price growth, followed by Gulf International Services.