GulfBase GCC Cap Indices
IndexLevelChg%
Large Cap4,023 0.80
Med Cap3,850 0.49
Small Cap4,907 0.91
Micro Cap8,519 0.62

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Ticker Price Volume
GFH 0.46 3,578,848
QNBK 135.9 109,396
SABIC 98.06 2,513,945
DSI 0.39 45,711,538
AMLAK 1.09 12,534,009
AIRARABIA 1.12 4,055,524
EEC 18.03 354,774

3Q09 KSA Earnings Wrap

Source: NCB Capital

A Decent 3Q Sets Up a Potentially Strong Q4

• 8 of 15 sectors in the Saudi market reported YoY aggregate earnings growth in 3Q09 versus just 3 sectors over the past few quarters.

• 57 companies reported YoY earnings growth in 3Q09, up from 37 in 2Q09.

• 64 companies reported YoY earnings declines in 3Q09, however this was an improvement from the 79 in 2Q09.

• The overall YoY decline in market earnings was SR6.9bn in 3Q09, or 28%. SABIC accounted for more than half of this decline as its net income fell by 50%, or SR3.6bn YoY.

• 4Q aggregate market earnings will likely be down versus 3Q09 given seasonality (we expect Saudi Electricity’s earnings to decline nearly SR2bn from 3Q09 to 4Q09e due to normal seasonality). However, on a YoY basis, earnings growth could reach 100% or more given the weak 4Q08 earnings numbers and we believe 12 of 15 sectors could record YoY earnings growth.

• The TASI YoY performance has closely tracked YoY changes in aggregate market earnings since 1Q08. While we do not expect the strong correlation to continue in the 4Q, this does however offer good support to a robust finish to the year for the TASI.

• Using the same YoY earnings and TASI sector performance analysis, the Petrochemicals sector looks to already be pricing in continued strong earnings growth, implying limited upside from current levels, while the Banking/Financials sector looks to have further upside given the TASI sector performance has lagged the rebound in sector earnings.

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