Qatar bourse sees meltdown on foreign institutional selloff

Foreign institutions net sold QR127mn worth equities yesterday as the 20-stock Qatar Index shed 1.81% to 12,100.93 points.

By Santhosh V Perumal/Business Reporter

 The Qatar Stock Exchange yesterday witnessed a huge meltdown with its key index losing a whopping 223 points to settle a tad above 12,100 levels compared with positive sentiments across other Gulf bourses.

Foreign institutions net sold QR127mn worth equities as the 20-stock Qatar Index (based on price data) shed 1.81% to 12,100.93 points, amid rising volumes.

Profit-booking was seen rampant especially in the telecom, banking and transport counters in the market, which is, however, up 16.58% year-to-date.

The index that tracks Shariah-principled stocks was seen melting faster than the other indices in the market, which saw a huge QR14bn erosion in capitalisation.

Local retail investors were seen extremely bullish in an otherwise choppy market, where trading volumes were largely skewed towards banks, realty and industrials stocks.

Market capitalisation eroded 2.03% to QR657.1bn. Large cap equities fell 2.28%, followed by mid (1.43%), small (0.7%) and micro (0.1%).

The 20-stock Total Return Index shrank 1.81% to 18,048.43 points, the All Share Index (with wider constituents) by 1.72% to 3,077.43 and the Al Rayan Islamic Index by 1.3% to 4,046.54.

All the three indices factored in dividend income as well.

Telecom stocks plunged 3.56%, followed by banks and financial services (2.02%), transport (1.84%), industrials (1.51%), real estate (1.28%) and insurance (0.38%); whereas consumer goods were up 0.24%.

Foreign institutions’ net selling shot up to QR127.19mn against QR26.15mn the previous day.

However, local retail investors turned net buyers to the extent of QR78.65mn compared with net profit-takers of QR4.59mn on Tuesday.

Non-Qatari individual investors turned net buyers to the tune of QR0.99mn against net sellers of QR9.91mn the previous day.

Domestic institutions’ net buying rose to QR47.5mn compared to QR40.65mn on Tuesday.

More than 71% of the stocks were in the red with major losers being Industries Qatar, QNB, Ooredoo, Vodafone Qatar, Qatar Islamic Bank, Ezdan, Nakilat, Milaha, al khaliji, International Islamic, Qatar Electricity and Water, Barwa, Mazaya Qatar, United Development Company and Mesaieed Petrochemical Holding.

However, Gulf International Services, Al Khaleej Takaful and Salam International Investment were seen to buck the trend.

Total trading volume rose 34% to 11.31mn stocks, value by 26% to QR580mn and transactions by 48% to 8,011.

The consumer goods sector’s trading volume more than doubled to 1.22mn equities, but value was down 3% to QR40.17mn. Deals gained 21% to 597.

The transport sector saw its trading volume shoot up 53% to 0.55mn shares, value by 26% to QR15.78mn and transactions by 77% to 369.

The banks and financial services sector reported a 38% surge in trading volume to 4.33mn stocks, 35% in value to QR286.72mn 59% in deals to 3,182.

The industrials sector’s trading volume soared 33% to 1.32mn equities, value by 35% to QR109.68mn and transactions by 38% to 1,759.

The market witnessed a 33% expansion in the telecom sector’s trading volume to 1.24mn shares, 47% in value to QR45.45mn and 57% in deals to 599.

The real estate sector’s trading volume was up 18% to 2.22mn stocks, value by 24% to QR58.3mn and transactions by 41% to 1,146.

However, the insurance sector’s trading volume tanked 19% to 0.43mn equities and value by 28% to QR23.9mn; while deals rose 38% to 359.

In the debt market, there was no trading of treasury bills and government bonds.

Dubai stocks bounce back as Arabtec halts freefall

Dubai’s stock index rebounded strongly yesterday from a plunge in the last session as Arabtec, which continued to dominate trading, turned around and other stocks recovered from a string of margin calls.

The Dubai index jumped 6.1% in active trade with blue chip Emaar Properties, the top property developer, up 7.1%.

Shares in construction firm Arabtec, which had tumbled their 10% limit for three sessions in a row, rose 5.1% to 3.28 dirhams after the company’s chairman pledged it would keep expanding, despite recent management turmoil.

The statement did not clarify key questions over Arabtec’s relationship with major shareholder Aabar, or what might happen to the 28.85% stake in Arabtec owned by former chief executive Hasan Ismaik.

But Arabtec shares are now so low that they may be attractive on a fair-value basis; in a report this week, Bank of America-Merrill Lynch gave a target price for the stock of 4.2 dirhams.

The Dubai benchmark dropped 6.7% on Tuesday, its worst daily performance in 10 months, as Arabtec’s plunge triggered a chain reaction of margin calls, knocking down the prices of most stocks in the emirate. This opened up buying opportunities yesterday.

“Some valuations have become attractive,” said Ali Adou, portfolio manager at The National Investor in Abu Dhabi. “This may not be a complete reversal but I hope the market will at least consolidate in the next few days.”

Abu Dhabi’s bourse, which had also suffered from the sell-off triggered by Arabtec, gained 1.9%.

Its three top gainers were real estate companies Eshraq Properties, Aldar Properties and RAK Properties, which surged 10.6, 8.7 and 7.8% respectively.

Saudi Arabia’s main index added 0.6%, recovering from Tuesday’s two-month closing low of 9,522 points.

Shares in Zain Saudi, the kingdom’s third biggest telecommunications operator, was one of the top gainers, surging 6.4% after the firm said on Wednesday it had signed infrastructure supply contracts worth 4.5bn riyals ($1.2bn) to develop and expand its network.

Elsewhere in the Gulf, Kuwait’s index added 0.4% to 6,965; Bahrain’s measure edged up 0.3% to 1,431, while Oman’s benchmark added 0.02% to 6,923 points.