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Weekly Market Report
The Qatar Exchange (QE) Index gained 222.82 points, or 2.25%, during the week, to close at 10,109.50 points. Market capitalisation increased by 1.67% to reach QR550.5bn as compared to QR541.4bn at the end of the previous week. Of the 42 listed companies, 28 companies ended the week higher, 10 fell and 4 remained unchanged.
Al Khalij Commercial Bank (KCBK) was the best performing stock with a gain of 11.79%; the stock is up 12.18% year-to-date (YTD). Qatar Cinema Co for Film Distribution (QCFS) was the top decliner, down 3.84%; the stock is down 11.95% YTD.
Emerging markets (EM) remain under pressure. According to QNB Group, the tapering of Quantitative Easing (QE) in the US could put the brakes on global growth. Concerns about QE tapering are already having a dramatic impact on global exchange rates and interest rates over the last few weeks.
EM currencies have weakened and global interest rates have risen significantly, as capital has flown out of EM assets. Even before bond purchases by the US Federal Reserve are actually scaled back, EM central banks have been forced to tighten monetary policy, thus reducing growth prospects.
The US tapering of quantitative easing is also likely to lead to further EM currency weakness. Overall, this tightening of monetary policy is likely to lead to lower EM activity that can put the brakes on future global growth.
However, the US Fed’s much anticipated minutes of its July 30-31 meeting provided limited clues and did not specifically mention September as the beginning of QE easing.
Nonetheless, it did little to dissuade predictions and global markets continue to remain generally bearish. Contrary to the trend seen in EM, regional markets have weathered the storm better and are up month-to-date (MTD) with Dubai leading the pack with a 4.3% gain (66.4% YTD).
Trading value during the week increased by 101.03% to reach QR1.8bn vs. QR900.8mn in the prior week (shortened week due to Eid holidays). The Banks & Financial Services sector led the trading value during the week, accounting for 33.15% of the total equity trading value.
Trading volume increased by 144.54% to reach 48.3mn shares, as against 19.8mn shares in the prior week. The number of transactions rose by 98.97% to reach 21,917 transactions versus 11,015 transactions in the prior week. The Banks & Financial Services sector led the trading volume, accounting for 29.15% of the total.
Foreign institutions remained bearish for the week with net selling of QR6.9mn versus net selling QR48.6 thousand in the prior week. Non-Qatari individuals were net sellers of QR9.4mn versus net selling QR57.6mn in the prior week. Finally, local institutions were net buyers of QR99.8mn versus QR16.2mn the week before.