Executive SummaryKCBK and First Finance are two financial institutions operating in Qatar and have maintained their goodwill among the customers and shareholders. This report comprises of macroeconomic valuables, industry valuables, financial analysis, stock price analysis and valuation of these two companies. Looking at ratio analysis of the two companies, it was noted that in terms of investment ratios KCBK was performing well as compared to FFCK. The report found out that inflation, GDP, interest rates, monetary policy, and competition are the major macroeconomics valuables that were affecting the industry at large.
In stock analysis, the results were incomparable since FFCK is not a listed company. However, the results of KCBK showed that the price of the company grew at an average rate of 2.16% over the period under consideration. However, one will need to know that the financial crisis of 2008/9 had responsibility in the changes of the prices of the company over the period of 5 years. OutlineExecutive SummaryIntroductionBanking sector MacroeconomicsBanking sector analysis (Industry analysis)Al Khalij Commercial Bank Company BackgroundRatio AnalysisStock Price PerformanceValuationDividend growth modelFirst Finance— financial analysis Company BackgroundRatio AnalysisStock Price PerformanceValuationDividend growth modelComparison of First Finance and Al Khalij Commercial BankRecommendationReferences IntroductionThe decision to invest in a company is largely influenced by the company’s performance in terms of profitability, competitiveness, financial capability, and potential for growth.
To get a clear picture of this, investors rely on expert performance analysis of a company presented in form of ratios, trends, and industry comparisons, to enable them forecast the future performance of a company compared to that of its competitors. This report presents expert analysis for two banks, Al Khalij Commercial Bank and First Finance for the purpose of determining which company is a good investment.
The report involves both qualitative and quantitative analysis. Banking sector MacroeconomicsQatar economy is mostly influenced by oil resources which are plenty. The country has enjoyed great economic growth due to oil growth rate. Qatar should have a good year in 2013 particularly because of a 6.4 percept growth in the coming year 2013 in the nonoil component of the economy overall whilst the banking industry should grow by more than that to help arrive at an overall growth figure of 6.4 percent (Gulf Base 2012).
The GDP has been growing since the financial crisis of 2008/9. Initially analysts expected the economic growth to ease to around 5 percent in the wake of a restriction in oil supply volume however recently things have taken a different turn, with the increase in overall petroleum prices globally going up and the inconsistency that oil supplies have faced. As the economy is directly dependent upon oil for its revenues to a great extent this increase in the supply of oil by sheer volume would imply a greater inflow of oil and oil revenue in the economy.
Thus the initial models of economic growth might actually have to be revised upwards to an expected growth of as much as 7 to 9 percent if Oil Growth increases by a large magnitude (Gulf Base, 2012).