External broker reports(aggregated public sources), International Securities

International Securities

External broker reports(aggregated public sources)

International Securities’ equity research analysis and advisory have been a vital source of market intelligence for our distinguished clients over the years. The equity research team’s main objective is to cover listed equities and to provide thoughtful, insightful, differentiated and timely research that can help clients make informed decisions. Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Equity Bottom-Up

Dubai Islamic Bank PJSC / Equity Bottom-Up

<ul><li>DIB reported 1Q24 shareholder’s profit of AED1.5bn, in-line with estimates, up 8.3% YoY but down 24.1% QoQ due to QoQ drop in net interest and non-interest income</li><li>Operating income came 2.6% lower than our estimates, whilst net operating income came 6.2% lower as a result of higher operating cost.</li><li>Lower impairment provision, however offset weaker operating performance </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

DIB reported 1Q24 shareholder’s profit of AED1.5bn, in-line with estimates, up 8.3% YoY but down 24.1% QoQ due to QoQ drop in net interest and non-interest incomeOperating income came 2.6% lower than our estimates, whilst net operating income came 6.2% lower as a result of higher operating cost.Lower impairment provision, however offset weaker operating performance Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

DIB 1Q24 Review: Earnings up 8.3% YoY (-24.1% QoQ), In-Line with Estimates

Thematic (Sector/Industry)

<ul><li>We expect FAB to report shareholder’s profit of AED3.45bn in 1Q24e, down 6.5% YoY and down 5.4% QoQ, as a result of the implementation of new UAE corporate tax.</li><li>Net interest income should improve QoQ, but non-interest income could fall YoY and QoQ.</li><li>Net interest income should grow 3.9% QoQ to AED4.9bn, led by a growing loan book and a slight improvement in NIMs. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We expect FAB to report shareholder’s profit of AED3.45bn in 1Q24e, down 6.5% YoY and down 5.4% QoQ, as a result of the implementation of new UAE corporate tax.Net interest income should improve QoQ, but non-interest income could fall YoY and QoQ.Net interest income should grow 3.9% QoQ to AED4.9bn, led by a growing loan book and a slight improvement in NIMs. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

<ul><li>Growing UAE economy should provide the necessary impetus for the UAE banks to grow locally, whilst the option to expand globally remains open</li><li>UAE banks remain undervalued within the wider GCC market despite better-than-expected performance in FY23, as the impact of the new UAE corporate tax and NIMs contraction as a result of fall in interest rates worry investors</li><li>We remain optimistic on UAE banks as we see earnings to stabilize at current levels after absorbing the impact of UAE corporate tax in FY24 and NIM contraction in FY25; maintain ‘Buy’ on FAB, ENBD and ADCB, and ‘Hold’ on ADIB and DIB</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Growing UAE economy should provide the necessary impetus for the UAE banks to grow locally, whilst the option to expand globally remains openUAE banks remain undervalued within the wider GCC market despite better-than-expected performance in FY23, as the impact of the new UAE corporate tax and NIMs contraction as a result of fall in interest rates worry investorsWe remain optimistic on UAE banks as we see earnings to stabilize at current levels after absorbing the impact of UAE corporate tax in FY24 and NIM contraction in FY25; maintain ‘Buy’ on FAB, ENBD and ADCB, and ‘Hold’ on ADIB and DIBContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

<ul>
<li>We expect ADNOC Drilling to post 4Q23e profits of USD263mn, up 2% QoQ and 13% YoY.</li>
<li>Our 4Q23e result would take FY23e profit to USD967mn, up 21% YoY and towards the high end of the management’s guided range of USD850mnUSD1bn.</li>
<li>We expect total rig count to reach 129 rigs, compared to 124 rigs and 115 rigs in 3Q23 and 4Q22, respectively.</li>
</ul>
Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.


We expect ADNOC Drilling to post 4Q23e profits of USD263mn, up 2% QoQ and 13% YoY.
Our 4Q23e result would take FY23e profit to USD967mn, up 21% YoY and towards the high end of the management’s guided range of USD850mnUSD1bn.
We expect total rig count to reach 129 rigs, compared to 124 rigs and 115 rigs in 3Q23 and 4Q22, respectively.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Financials Credit Analyst

Hank Calenti, CFA

CreditContinuum

Credit

Risk markets rallied on expectations that a meaningful economic restart will be brought forward following news of <a href="https://www.smartkarma.com/entities/pfizer-inc" target="_blank" data-smartkarma-citation="entities:1131:1" rel="noopener">Pfizer's (PFE US)</a> preliminary success rate of 90% in its Coronavirus vaccine trials. Combined with a Goldilocks election outcome whereby President Trump loses the election, but Joe Biden does not win a mandate, Caa rated corporates continued to tighten by more than the Asia High Yield (HY) index and other components of the US HY complex.Following two days of initial euphoria, markets consolidated on news of increased Coronavirus contagion. The growing footprint of Coronavirus related, pre-Christmas, restrictions across Europe and the US may be a headwind for economic growth over the near term.In the rate markets, a sharp jump in US yields early in the week retraced as the week progressed and attracted end-user buying, particularly in Asia. Japanese investors were reported to have been strong buyers of 7- to 10-year Treasuries. One of the developing risks at this point is that the reflation trade does not resurface while federal stimulus is constrained, and near-term economic prospects reduce. A tepid increase in yields could limit the effectiveness of any fresh Fed action. Against this background, almost all Asia-headquartered bonds tightened relative to their benchmark spreads as vaccine progress and US Treasury curve steepening increased prospects for higher net interest margins. Amongst Additional Tier 1 bonds, Thai-headquartered banks led advances as the Bank of Thailand lifted a dividend ban and stated that the financial institutions have sufficient capital and loan-loss provisions to withstand the impact of COVID-19. This sounds like cheer-leading and we are tempted to fade this rally. Concurrently, Turkish HY Senior Unsecured bank bonds materially outperformed their global peers in anticipation of more orthodox monetary and economic policies. Given the starting point for a potential Turkish bank bond rally, we may see higher returns from Turkish- as opposed to Thai-bank bonds.In the debt capital markets, over US$30 billion was raised by financial institutions in USD, Euros and Sterling across the credit continuum. When we noted last week that issuers were likely to bring 2021 issuance needs forward, we did not anticipate a flood like this. In what may have been the busiest bank bond issuance week of the year, the amount issued was almost one-half the amount brought in the prior eight weeks.Market Outlook: Over the near term, positive vaccine news combined with a goldilocks US election outcome lowers the likelihood of excessive US federal stimulus. This should cap additional upward pressure on US Treasury yields until vision increases on likely H2 ’21 US economic growth, post-vaccine distribution. Reflation remains on hold. This could limit US dollar weakness and limit positive impacts on reflationary beneficiaries such as bank valuations and Emerging Markets (EM) assets. Over the medium term, a less expansionary US fiscal policy should reduce upward pressure on U.S. rates and is likely to support yield-seeking, including EM fixed income securities over time.

Risk markets rallied on expectations that a meaningful economic restart will be brought forward following news of Pfizer's (PFE US) preliminary success rate of 90% in its Coronavirus vaccine trials. Combined with a Goldilocks election outcome whereby President Trump loses the election, but Joe Biden does not win a mandate, Caa rated corporates continued to tighten by more than the Asia High Yield (HY) index and other components of the US HY complex.Following two days of initial euphoria, markets consolidated on news of increased Coronavirus contagion. The growing footprint of Coronavirus related, pre-Christmas, restrictions across Europe and the US may be a headwind for economic growth over the near term.In the rate markets, a sharp jump in US yields early in the week retraced as the week progressed and attracted end-user buying, particularly in Asia. Japanese investors were reported to have been strong buyers of 7- to 10-year Treasuries. One of the developing risks at this point is that the reflation trade does not resurface while federal stimulus is constrained, and near-term economic prospects reduce. A tepid increase in yields could limit the effectiveness of any fresh Fed action. Against this background, almost all Asia-headquartered bonds tightened relative to their benchmark spreads as vaccine progress and US Treasury curve steepening increased prospects for higher net interest margins. Amongst Additional Tier 1 bonds, Thai-headquartered banks led advances as the Bank of Thailand lifted a dividend ban and stated that the financial institutions have sufficient capital and loan-loss provisions to withstand the impact of COVID-19. This sounds like cheer-leading and we are tempted to fade this rally. Concurrently, Turkish HY Senior Unsecured bank bonds materially outperformed their global peers in anticipation of more orthodox monetary and economic policies. Given the starting point for a potential Turkish bank bond rally, we may see higher returns from Turkish- as opposed to Thai-bank bonds.In the debt capital markets, over US$30 billion was raised by financial institutions in USD, Euros and Sterling across the credit continuum. When we noted last week that issuers were likely to bring 2021 issuance needs forward, we did not anticipate a flood like this. In what may have been the busiest bank bond issuance week of the year, the amount issued was almost one-half the amount brought in the prior eight weeks.Market Outlook: Over the near term, positive vaccine news combined with a goldilocks US election outcome lowers the likelihood of excessive US federal stimulus. This should cap additional upward pressure on US Treasury yields until vision increases on likely H2 ’21 US economic growth, post-vaccine distribution. Reflation remains on hold. This could limit US dollar weakness and limit positive impacts on reflationary beneficiaries such as bank valuations and Emerging Markets (EM) assets. Over the medium term, a less expansionary US fiscal policy should reduce upward pressure on U.S. rates and is likely to support yield-seeking, including EM fixed income securities over time.

Bank Credit Weekly: Vaccine Rally, Then Consolidation, Drives Outperformance & Turkey Vs Thai Banks

United Arab Emirates

Dubai Islamic Bank offers personal, business, and corporate banking services. The Company also operates wealth management, financing, investment banking, treasury product, and capital market divisions. Dubai Islamic Bank's activities are conducted in accordance with the Islamic law Sharia, which prohibits usury.

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Dubai Islamic Bank PJSC (DIB UH)

DIB 1Q24 Review: Earnings up 8.3% YoY (-24.1% QoQ), In-Line with Estimates

DIB reported 1Q24 shareholder’s profit of AED1.5bn, in-line with estimates, up 8.3% YoY but down 24.1% QoQ due to QoQ drop in net interest and non...

International Securities

1Q24 Quarterly Result Previews

We expect FAB to report shareholder’s profit of AED3.45bn in 1Q24e, down 6.5% YoY and down 5.4% QoQ, as a result of the implementation of new UAE...

International Securities

UAE Banks: Keep calm and carry on

Growing UAE economy should provide the necessary impetus for the UAE banks to grow locally, whilst the option to expand globally remains open

International Securities

4Q23 Quarterly Result Previews

Our 4Q23e result would take FY23e profit to USD967mn, up 21% YoY and towards the high end of the management’s guided range of USD850mnUSD1bn.

International Securities

Bank Credit Weekly: Vaccine Rally, Then Consolidation, Drives Outperformance & Turkey Vs Thai Banks

Positive vaccine news and the US election result lowers the likelihood of excessive US stimulus. This should cap pressure on Treasury yields and...

Hank Calenti, CFA

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