US rate hike fears, weak oil demand cast shadow on QSE as index tanks 344 points

Initial fears on sharp US rate hike and the weakened oil demand had their lasting impression in the Qatar Stock Exchange, which saw its key index tank 346 points and market capitalisation erode QR15bn this week.An across the board selling – particularly in the telecom, insurance and real estate counters – led the 20-stock Qatar Index plunge 2.83% this week which saw a global credit rating agency Moody’s view that large hydrocarbon reserves and "exceptionally" high per capita income as well as the sovereign's very strong balance sheet provide "significant shock-absorption" capacity to mitigate Qatar's credit challenges.About 85% of the traded constituents in the main market were in the red this week which saw Qatar’s trade surplus expand 30.3% year-on-year to QR280.48bn in the first nine months of this year.The domestic institutions were increasingly net sellers this week which saw the country’s industrial production index soar 4.9% year-on-year in September 2022.The Arab institutions were seen net profit takers this week which saw Qatar’s export unit value index shot up 32.3% on an annualised basis during the third quarter (Q3) of this year.The foreign individuals’ weakened net buying had its influence in the main market this week which saw the country’s import unit value index decline 0.49% during Q3, 2022."The selling pressure remains, and the index is now near the strong support level at 11,750 points, knowing that a break below it would most likely lead to a deep bearish move to 11,386 points and maybe lower to 10,500 points," a Kamco technical analysis note said.However, the first resistance level comes at 12,400 points, while above this would decrease the downside risk and allow another jump to 12,700 points, which if broken would gradually lead to the next layer at 13,350 points, it added.Medium-term and long-term investors can re-enter the market at levels higher than 12,850 points and 12,400 points respectively, according to the note.The Islamic index was seen declining faster than the other indices this week which saw Mekdam Holding get the approval from the Qatar Financial Market Authority to transfer its listing to the main bourse from the venture market.However, the local retail investors was increasingly bullish this week which saw a total of 2.79mn Masraf Al Rayan-sponsored exchange traded fund QATR worth QR7.42mn trade across 137 deals.Trade turnover and volumes were on the increase in both the main and venture markets this week, which saw as many as 0.03mn Doha Bank-sponsored QETF valued at QR0.34mn change hands across 24 transactions.Market capitalisation was seen eroding QR15.17bn or 2.24% to QR663.43bn on the back of large and midcap segments this week which saw the industrials and banking sectors together constitute about 65% of the total trade volume in the main market.The Total Return Index plummeted 2.83%, All Share Index by 2.47% and All Islamic Index by 2.94% this week, which saw no trading of sovereign bonds.The telecom sector plunged 5.8%, insurance (4.82%), industrials (3.14%), realty (2.19%), banks and financial services (2.07%), consumer goods and services (1.79%) and transport (1.65%) this week, which saw no trading of treasury bills.Major losers in the main market included Mannai Corporation, Ooredoo, Dlala, Qatar Insurance, Qatar Industrial Manufacturing, Qatar Islamic Bank, QIIB, Mesaieed Petrochemical Holding, Alijarah Holding, Industries Qatar, Gulf International Services, Qatari German Medical Devices, Barwa, United Development Company, Gulf Warehousing and Nakilat. In the venture market, Al Faleh Educational Holding saw its shares depreciate in value this week.Nevertheless, Estithmar Holding, Doha Insurance, Al Meera, Milaha and Mazaya Qatar were among those gained in the main market. In the junior bourse, Mekdam Holding saw its shares appreciate in value this week.The domestic funds’ net selling increased significantly to QR71.24mn compared to QR12.12mn the week ended November 17.The Arab institutions were net sellers to the tune of QR0.77mn against net buyers of QR0.78mn a week ago.The foreign individuals’ net buying decreased markedly to QR6.05mn compared to QR15.38mn the previous week.The Gulf retail investors’ net buying eased marginally to QR2.01mn against QR2.44mn the week ended November 17.However, the Qatari individuals’ net buying strengthened considerably to QR40.44mn compared to QR21.82mn a week ago.The foreign funds’ net buying expanded significantly to QR37.84mn against QR4.84mn the previous week.The Arab individuals’ net buying rose marginally to QR18.77mn compared to QR18.33mn the week ended November 10.The Gulf institutions’ net profit booking shrank drastically to QR33.11mn against QR51.46mn a week ago.Total trade volume in the main market rose 16% to 606.93mn shares and value by 1% to QR2.1bn, whereas deals were down 2% to 70,621.The venture market saw an 11% jump in trade volumes to 0.88mn equities, 7% in value to QR6.52mn and 9% in transactions to 406.