The Qatar Exchange (QE) Index gained 47.80 points, or 0.51%, during the week, to close at 9,419.97 points. Market capitalisation rose by 0.38% to reach QR517.4 billion (bn) as compared to QR515.4bn at the end of the previous week. Of the 42 listed companies, 19 companies ended the week higher, 17 fell and 6 remained unchanged. Ooredoo (ORDS) was the best performing stock with a gain of 4.62%; the stock is up 21.83% year-to-date (YTD). Qatar Electricity & Water Co. (QEWS) was the top decliner, down 3.76%; the stock is still up 17.82% YTD.
According to QE CEO Rashid bin Ali al-Mansoori, the recent Morgan Stanley Capital International (MSCI) upgrade of the Qatari equity market to an Emerging Markets (EM) status will attract QR3bn to the QE. We believe this is a long-term positive for the market and according to the data available it seems like the MSCI Qatar Index will have a provisional weight of 0.49% in the MSCI EM Index. A total of 9 stocks will be included in this index, led by the QNB Group (QNBK) with a provisional closing weight of 21.68% in the MSCI Qatar Index. Further, the provisional closing weight for Industries Qatar (IQCD) has been set at 18.59%, Masraf Al Rayan’s (MARK) at 16.48%, Ooredoo’s (ORDS) at 15.78%, Qatar Electricity & Water Company’s (QEWS) at 6.44%, Commercial Bank of Qatar’s (CBQK) at 5.68%, Qatar Islamic Bank’s (QIBK) at 5.53%, Doha Bank’s (DHBK) at 4.94% and Vodafone Qatar’s (VFQS) at 4.87%.
The June quarter earnings season got off to a strong start with the QNB Group (QNBK) posting solid results. QNBK reported a net profit of QR4.7bn in first half 2013 (1H2013), representing an increase of 15.1% year-on-year (YoY). Earnings per share stood at QR6.8 in 1H2013 as compared to QR5.9 in 1H2012. Total assets rose 30.4% YoY to QR431bn in 1H2013, while loans & advances rose 26.3% YoY to QR296bn. Customer deposits increased by 32.7% to QR326bn. This led to the group’s loan-to-deposit ratio to stand at 91%. The ratio of non-performing loans to gross loans has been maintained at 1.5%. The 1H2013 results include that of NSGB in Egypt as well, in which the group had acquired a controlling stake of 97.12% during the first quarter of 2013. Going forward, we expect June quarter results to act as a catalyst for the market. For detailed analysis and estimates, investors should refer to our report (QNBFS Second Quarter 2013 Earnings Preview, published on July 07, 2013).
Trading value during the week decreased by 20.46% to reach QR773.3 million (mn), as compared to QR972.2mn in the prior week. The Banks & Financial Services sector led the trading value during the week, accounting for 32.06% of the total equity trading value.
Trading volume increased by 3.41% to reach 20.2mn shares, as against 19.5mn shares in the prior week. The number of transactions fell by 6.88% to reach 11,525 transactions versus 12,377 transactions in the prior week. The Banks & Financial Services sector led the trading volume, accounting for 25.34% of the total volume.
Foreign institutions turned bullish for the week with overall net buying of QR38.0mn (including T-bills) versus net selling QR70.1mn (including T-bills) in the prior week.