Strong profit booking by domestic institutions drags bourse

By Santhosh V Perumal/Business Reporter

The Qatar Exchange (QE) was on a weak wicket during the week mainly due to strong profit booking from domestic institutions.

Micro and mid cap segments largely drove the 20-stock Qatar Index down 0.11% in the review week that saw Kuwait bourse gain 1.44%, Abu Dhabi (1.36%), Muscat (0.99%) and Saudi Arabia (0.01%); while Bahrain fell 0.29%.

However, the Total Return Index surged 0.79% and Al Rayan Islamic Index by 0.01% in the week that saw the listed companies in QE witness a marginal decline in their cumulative net profitability in 2012, mainly pulled down by the real estate sector; painting rather a pessimistic picture in an otherwise strong economy.

The QE Index had risen 2.61% year-to-date (YTD) compared to Abu Dhabi’s gains of 16.27%, Kuwait (14.88%), Muscat (6.08%), Saudi Arabia (5.54%) and Bahrain (2.1%).

Major losers included Milaha, AIijarah Holding, Barwa, Ooredoo, Widam Food, Al Meera, Vodafone Qatar and Commercialbank; even as Gulf International Services (GIS), Qatari Investors Group, Woqod, Nakilat, United Development Company, Mazaya Qatar, Industries Qatar and QNB bucked the trend in the week that witnessed global credit rating agency Fitch maintain Ooredoo’s long-term foreign currency issuer default rating at ‘A+’ with stable outlook.

GIS, Nakilat and Barwa were among the most active by volume and value in the week that saw Milaha, which manages Doha Port, say that it is increasing the capacity of the port in view of the increasing potential of the country’s economy.

The QE All Share Index (comprising wider constituents) surged 0.69% with the realty index gaining 1.93%, insurance (1.69%), telecom (1.57%), industrials (0.8%), consumer goods (0.59%), transport (0.53%) and banks and financial services (0.24%) in the week that featured Milaha’s offshore arm Halul Offshore Services announce fleet expansion by adding six more vessels by 2013 and next year due to strong demand from the region’s oil and gas majors.

Industrials, consumer goods, telecom, transport, banking and insurance sectors were seen to outperform the key barometers with their indices gaining YTD 15.24%, 12.53%, 10.78%, 8.87%, 5.1% and 2.74% respectively; while that of real estate fell 3.44%.

Of the 42 stocks; 19 advanced, while 20 declined, two were unchanged and one was not traded in the week that saw an Alpen Capital report, which said the proposed mandatory health insurance scheme is expected to augur well for Qatar’s pharmaceutical sector.

Seven of the 12 banks and financial institutions; four of the eight consumer goods; two each of the eight industrials; the five insurers; the two telecom and the three transport; and one of the four realty sector stocks closed lower in the week that saw Ooredoo announce that 4G launch would be soon after Ramadan.

Market capitalisation rose 0.14% or QR66mn to QR471.62bn with small and large cap equities notably gaining 2.09% and 0.13%; while micro and mid caps fell 0.73% and 0.45% respectively in the week that the QE indices rebalancing came into effect from Monday.

Mid, large and small cap equities have gained YTD 3.4%, 2.81% and 0.62% respectively; while micro caps plunged 4.88%.

The bourse’s price-earning ratio, a measure of expensiveness, was more than 12 times in the first week of April against 12.15 times in the comparable period of 2012.

The price-to-book value was 1.67 times at the end of April 4 against 1.71 times in the year-ago period.

The dividend yield, which takes into account cash dividends, stood at more than 4% in the first week of April compared to 3.68% in the year-ago period.

Domestic institutions’ net profit booking intensified to 36.58% or QR299.59mn. A lower 14.27% of them were into buying against 17.79% the previous week whereas a much higher 50.85% into selling compared to 37.64%.

However, foreign institutions’ net buying surged to 42.55% or QR356.67mn. A higher 53.72% of them bought equities against 47.69% in the week ended March 28 while a lower 10.17% of them offloaded, compared to 15.26%.

Qatari retail investors’ net selling fell to 6.91% or QR56.59mn. A lower 22.47% of them were into buying against 24.94% the previous week and a lower 29.38% into selling compared to 34.43%.

Non-Qatari individual investors’ net profit booking sunk to 0.05% or QR0.41mn. A marginally lower 9.55% of them purchased stocks against 9.58% in the week ended March 28 and a lower 9.6% sold compared to 12.67%.

Total trading volume fell 18% to 22mn shares, value by 29% to QR819mn and transactions by 14% to 12,921 in the week.

In terms of volume, the real estate sector stocks accounted for 25.68% of the total against 17.56% the pervious week, banks and financial services 21.36% (24.24%), industrials 20.09% (14.77%), transport 18.36% (26.5%), consumer goods 7.05% (7.5%), telecom 5.91% (7.46%) and insurance 1.55% (1.93%).

The transport sector’s trading volume plummeted 43% to 4.04mn shares, telecom by 35% to 1.30mn, insurance by 35% to 0.34mn, banks and financial services by 28% to 4.70mn and consumer goods by 23% to 1.55mn; while that of realty surged 19% to 5.65mn and industrials by 11% to 4.42mn.

In terms of value, the industrials sector’s shares constituted 30.72% of the total compared to 27.71% a week ago, banks and financial services 26.63% (29.19%), consumer goods 15.49% (14.07%), real estate 13.27% (7.29%), transport 8.63% (12.26%), telecom 3.43% (7.59%) and insurance 1.84% (1.89%).

The telecom sector stocks’ trading value plunged 68% to QR28.08mn, transport by 50% to QR70.67mn, banks and financial services by 36% to QR218.06mn, insurance by 31% to QR15.04mn, industrials by 22% to QR251.57mn and consumer goods by 22% to QR126.88mn, while that of realty gained 29% to QR108.69mn.

In terms of transactions, the banks and financial services sector’s share in total was 24.29% against 23.67% the previous week, industrials 20.48% (19.47%), real estate 19.05% (13.29%), consumer goods 15.64% (18.21%), transport 12.61% (15.75%), telecom 5.73% (6.9%) and insurance 2.21% (2.71%).

The transport sector stocks transactions tanked 31% to 1,629; insurance by 30% to 285; telecom by 29% to 741; consumer goods by 26% to 2,021; banks and financial services by 12% to 3,138 and industrials by 10% to 2,646; whereas those of realty gained 23% to 2,461.

In the debt market, a total of 50,000 treasury bills valued at QR496.35mn changed hands across 10 transactions.

As many as 30,000 treasury bills (TA55) valued at QR297.76mn were traded in six deals and as many as 20,000 treasury bills (TA52) worth QR198.59mn changed hands across four transactions during the week.