We maintain Overweight ratings (add
volatility flag) on Qatar National Bank
and Commercial Bank of Qatar ─ CBQ is
our preferred stock
􀀗 Qatar’s stellar economic growth story
will be impacted by lower oil and gas
prices. Liquidity concerns are likely to
restrict growth but share price declines
have more than priced in the bad news
􀀗 Target prices cut by 14% for QNB to
QR232 and 55% for CBQ to QR112
The banks’ high balance sheet growth over the last few
years is almost certain to moderate, in our view, as
liquidity remains tight and uncertainty over the sustainable
level of the oil price continues. Long swing capital formation
projects that the banking sector is involved in financing that
are already under way are likely to continue but the visibility
of future projects is now less certain, although wholesale
cancellation is unlikely, in our view.
On a relative basis, Qatar is expected to hold up
reasonably well with 2009 real GDP growth of 9.8% (2008e
15.2%) on HSBC estimates. Although there will almost
certainly be lower growth in 2009, we believe current share
prices have more than priced this in.
Our top pick is Commercial Bank of Qatar (CBQ). It has
fallen by c54% in the last six months. Although we have cut
our 2009e earnings by c29% and reduce our one-year target
price by 55% to QR112, we believe it offers good value.
We also like QNB’s low-risk profile but the shares are more
expensive, currently trading at c10x 2008e earnings and
c2.3x 2008e NAV. We view QNB as a core holding in any
MENA financial portfolio, but CBQ currently provides
much more upside.
Target prices (QR) and rating

Investment case
􀀗 The economic outlook for Qatar is less certain but we still expect it
to have the highest GDP growth in the GCC region in 2009
􀀗 Downside risks for the banks come from lower growth and
uncertain market conditions
􀀗 Extreme bad news more than priced in at current levels –
Overweight ratings maintained (adding V) on CBQ and QNB

目录

Investment case 2
Valuation 5
Qatar National Bank 10
Commercial Bank of Qatar 20
Qatar economics 27
Disclosure appendix 30
Disclaimer 34