Qatar Exchange gains even as Fed warns of weakness

By Santhosh V PerumalBusiness Reporter

The Qatar Exchange made a healthy 1.16% weekly gain along with Saudi Arabia (1.17%), even as other Gulf bourses fell

The Qatar Exchange (QE) made a healthy 1.16% gain in the trading week even as the US Federal Reserve warned that the US economy continued to stay weak.Lower domestic institutional buying notwithstanding, the QE tread a bullish path during the week that also saw Saudi Arabia gain 1.17%. However, the other Gulf bourses fell, with Kuwait, Bahrain, Abu Dhabi, Dubai and Muscat down 1.84%, 1.6%, 0.75%, 0.51% and 0.41%, respectively.The US Fed on Thursday warned of “significant downside risks” to the US economy, while seven of the G-20 members asked the eurozone to act swiftly to avert crisis in view of a research paper by European Central Bank study which feared for the sustainability of Economic and Monetary Union itself.Nevertheless, the 20-stock Qatar benchmark settled 97 points higher at 8,444.79 points in the week that saw Industries Qatar (IQ) receiving for the first time an ‘Aa3’ long-term local currency issuer rating with a stable outlook from global credit rating agency Moody’s.The Qatari bourse is however the best performer in the Gulf year-to-date (ytd),  down 2.73%, vis-à-vis Muscat (-15.63%), Kuwait (-14.94%), Bahrain (-13.07%), Dubai (-10.44%), Saudi Arabia (-7.23%) and Abu Dhabi (-5.97%).Banking, industrial and services stocks were among those sought after in the QE in the week that also saw Moody’s changing its outlook on Masraf Al Rayan’s ‘A3’ long-term issuer rating to “positive” from “stable”.Salam International Investments (SIIL), Rayan, IQ, Qatar Islamic Bank, QNB, Qatar Navigation, Barwa and Nakilat were among the prime gainers in the week that saw SIIL finding its way back into the QE’s revised benchmark, to replace Qatar National Cement, effective from October 2.The insurance index gained 1.39%, lenders (1.20%), industry (1.13%) and services (1.08%) in the review week that also saw SIIL shareholders approve the purchase of 17.5mn additional shares of its subsidiary Salam Bounian Development at QR8.50 a piece.The indices of industry, services and insurance lost YTD 9.35%, 8.38% and 3.59% respectively; while that of banks rose 2.2%.Of the 42 stocks; 30 advanced, while only 11 declined and one was unchanged in the week that saw National Leasing’s plans to raise QR486mn through a rights issue to part fund its expansion.Four of the eight banks, all of the five insurers, five of the seven industries and 16 of the 22 services closed higher in the week that featured Mannai Corporation’s rights issue hit the market on Thursday.Market capitalisation jumped 1.40% or more than QR6bn to QR444.28bn mainly on micro, large and mid cap equities in the week that witnessed the QNB Group reopen its representative office in Libya, six months following its closure because of the unstable conditions in that country.Micro, large and mid cap equities gained 1.45%, 1.33% and 1.29% respectively; whereas small caps lost 1.75% in the week that saw Mazaya Qatar say that the political unrest has shaken up the Middle East and North Africa real estate industry and altered market dynamics but also provides a wealth of new opportunities for the investors.Large, small and mid cap stocks have melted ytd by 12.81%, 8.67% and 6.38% respectively; while micro caps surged 16.46%.Domestic institutions’ bullish grip eased as their net buying fell to 7.1% from 12.78% in the previous week.A lower 27.93% of them bought stocks against 31.39% in the week ended September 15, whereas a higher 20.83% offloaded compared to 18.61%.Foreign institutions continued to be profit takers but with lesser intensity as their net selling plunged to 3.76% from 15.52% in the previous week.A marginally higher 15.78% of them were into buying against 14.20% in the week ended September 15 while a much lower 19.54% into selling compared to 29.72%.Local retail investors turned bearish amidst their higher exposure as they were net sellers to the tune of 2.27% against net buyers of 0.58% in the previous week.A higher 43.76% of them were into buying equities compared to 39.69% in the week ended September 15 and a higher 46.03% into selling against 39.11%.Non-Qatari individual investors were also profit takers as they were net sellers to the extent of 1.08% compared with net buyers of 2.17% in the previous week.A lower 12.52% of them purchased stocks against 14.73% in the week ended September 15, while a marginally higher 13.60% sold compared to 12.56%.The bourse’s price-earning ratio, a measure of expensiveness, was 13.68 times in the week ended September 22 against 11.86 times in the comparable period of 2010.The price-to-book value was 1.73 times at the end of third week of September against 1.94 times in the year-ago period.Total share trading volume rose 19% to 36.75mn, value by 6% to QR1.39bn and transactions by 7% to 22,517.The services sector dominated the trading ring in terms of volume and transactions while banks did so in deals.The services sector cornered 51.05% of total stock trading volume (against 57.77% in the previous week), lenders 36.98% (30.74%), industry 10.04% (10.27%) and insurance 1.93% (1.23%).The insurance sector’s trading volume soared 87% to 0.71mn shares, banks by 43% to 13.59mn, industry by 16% to 3.69mn and services by 5% to 18.76mn.The lenders accounted for 38.13% of total stock trading value (compared to 32.82% a week ago), services 36.69% (43.51%), industry 22.30% (21.37%) and insurance 2.88% (2.29%).The insurance’s stock trading value vaulted 55% to QR39.91mn, banks by 23% to QR532.03mn and industry by 11% to QR306.42mn; whereas that of services fell 11% to QR514.34mn.IQ equities accounted for 19.60% of total trading value, Rayan (16.98%) and Barwa (8.53%).The services’ share in total transactions stood at 48.77% (against 53.93% in the previous week), lenders at 30.08% (26.15%), industry at 17.07% (17.76%) and insurance at 4.08% (2.15%).The insurance sector’s deals more than doubled to 919; those of banks gained 23% to 6,772 and industry by 3% to 3,844; while those of services were down 3% to 10,982.